UK DATA: Lending On The Stronger Side In Nov, Mortgage Approvals In Line
UK net mortgage lending increased to GBP4.5bln in November, on the stronger side of expectations, while mortgage approvals again printed broadly in line with consensus and historical norms. Net consumer credit increased to GBP2.08bln, nearly 1bln above consensus. The release points to continued housing market resilience and stronger demand for consumer credit towards the end of 2025.
- Data from the BoE show net lending on dwellings increased to GBP4.49bln, above consensus of 4.1bln, after a slightly downward revised GBP4.16bln (initially 4.27bln) in October.
- New mortgage approvals came in at 64.5k, broadly in line with consensus of 64.0k, and still trending in line with the historical average.
- Both of these datapoints have shown stability since the effect of Stamp Duty-driven frontloading in March subsided, with this month's report unlikely to have fully captured any post-Budget reaction with it only coming on Nov 26.
- Within the strong net consumer credit figure, "net borrowing through credit cards was GBP1.0bln in November, up from 0.7bln in October. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) slightly increased in November, to GBP1.1bln from 1.0bln"
- Average mortgage rates were little changed: those remortgaging from 2-year and 3-year fixed-rate mortgages continue to see big drops to their borrowing costs in excess of 1.5ppt, while those remortgaging from a 5-year fixed rate will see a jump of around 2ppt on average.
- Also in the release, M4 money supply grew a considerable 0.8% M/M (vs -0.2% Oct) and 4.3% Y/Y (vs 3.5% Oct). The BOE notes that the net flow of sterling money (M4ex) was the highest since January 2025, at GBP15.3bln in November - "largely driven by households and non-intermediate other financial corporations increasing their holdings of money."
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USDCAD TECHS: Bull Channel Breakout
- RES 4: 1.4140 High Nov 5 and a key resistance
- RES 3: 1.4131 High Nov 21
- RES 2: 1.4051 High Nov 28
- RES 1: 1.3939/4016 Low Nov 28 / 20-day EMA
- PRICE: 1.3865 @ 16:35 GMT Dec 5
- SUP 1: 1.3853 Intraday low
- SUP 2: 1.3840 50.0% retracement of the Jun 16 - Nov 6 bull cycle
- SUP 3: 1.3812 Low Sep 23
- SUP 4: 1.3779 Low Sep 22
A bear theme in USDCAD remains intact and Friday’s strong sell-off reinforces a bear theme. The pair has breached an important support at 1.3942, the base of a bull channel drawn from the Jul 23 low. The break highlights a stronger bear cycle and signals scope for an extension towards 1.3840 next, a Fibonacci retracement point. Initial firm resistance to watch is 1.4016, 20-day EMA.
LOOK AHEAD: US Week Ahead: FOMC Decision Dominates, Post Shutdown Data Catch-Up
- Next week’s US calendar is dominated by the FOMC decision on Wednesday, with a third consecutive 25bp cut almost fully priced.
- Expect it to be a contentious meeting however, with many arguing for a pause not least whilst they’re still relatively in the dark on key official data releases following the government shutdown.
- Fed Chair Powell opted for a surprisingly hawkish tone at the late October press conference, highlighting a deeply divided committee on prospects for another cut in December.
- The “fog” had appeared to win out until NY Fed’s Williams, a senior permanent voter, gave unusually explicit guidance on still seeing room “for a further adjustment in the near term”. With no pushback from FOMC members or media briefings, it appears this message has approval from the core of the FOMC which should be enough to see a rate cut this month. The likely catalyst was the further increase in the unemployment rate to 4.44% back in September, although subsequent tracking suggests stabilization and jobless claims data don’t show any signs of deterioration.
- We’ll be looking for the number of hawkish dissents (we’d be surprised if anyone joins Miran dissenting for a 50bp cut) and expect a greater number to object to a cut in the 2025 dot plot, whilst the distribution of dots for 2026 should be in greater focus.
- As for the economic projections, we expect upward revisions to GDP growth but downward revisions to near-term core PCE inflation with tariff passthrough proving less severe than previously feared.
Aside from the Fed, we also receive two months worth of JOLTS data along with other delayed releases as the shutdown data backlog is slowly caught up.
AUDUSD TECHS: Bullish Impulsive Wave Extends
- RES 4: 0.6723 High Oct 21 ‘24
- RES 3: 0.6707 High Sep 17 and a key resistance
- RES 2: 0.6660 High Sep 18
- RES 1: 0.6649 Intraday high
- PRICE: 0.6630 @ 16:32 GMT Dec 5
- SUP 1: 0.6580/6533 High Nov 13 / 20-day EMA
- SUP 2: 0.6517 Low Nov 27
- SUP 3: 0.6466/21 Low Nov 26 / 21
- SUP 4: 0.6415 Low Aug 21 / 22 and a bear trigger
A strong impulsive bull wave in AUDUSD remains intact, having printed 10 consecutive sessions of higher highs. Recent gains have cleared a number of important short-term resistance points, strengthening a bull theme and highlighting scope for a continuation higher. Today’s rally has resulted in a breach of 0.6640, 76.4% of the Sep 17 - Nov 21 bear leg. This opens 0.6707, the Sep 17 high and key resistance. Key support to watch is at 0.6533, 20-day EMA.
