GDP growth was weaker than expected, falling by 0.5% in the September quarter. It was the largest quarterly decline since the GFC.
Household consumption was subdued, but supported growth, while dwelling investment, government expenditure and net exports detracted from growth in the quarter.
For the year to the September quarter, GDP rose by just 1.8%, down from a revised pace of growth of 3.1% in the year to June (which was previously reported as a 3.3% increase).
This took annual GDP growth down from an above trend pace of growth, to one which is below trend.
Some of the key areas of weakness in the September quarter GDP are expected to rebound in the December quarter, suggesting the weakness in the September quarter was likely a 'one-off'. However, the annual growth profile for this year and next now looks much weaker.
The AiG performance of construction index rose to 46.6 in November, from 45.9% in October. The index, however, remains below 50 signalling ongoing contraction in construction activity, albeit at a less rapid pace in November.
Lower bond yields provided a boost to dividend paying stocks and drove US markets to new record highs.
Despite the stronger market, the pharmaceutical sector was weaker as President-elect Trump voiced his views on drug pricing.
In the US, the Dow rose 1.5% and the S&P500 was up 1.2%. European markets were also firmer with the FTSE100 up 1.8% and the German Dax up 2.0%.
Investors expect the European Central Bank to maintain or extend its asset purchase program thus keeping bond yields low.
US 10 year government bond yields retraced some of the increases seen in recent weeks with the yield falling 5 basis points to 2.34%.
Long bond yields were also lower in Europe ahead of tonight's meeting of the European Central Bank.
The market expects the ECB to maintain or extend its asset purchasing program thus keeping monetary policy in the Eurozone very accommodative.
Market pricing for a US Fed hike in December remains at 100% with a further two hikes expected during 2017.
The US dollar index eased back overnight with no particular drivers.
This saw the AUD more than make up the ground lost against the USD immediately following yesterday's weak Australian GDP result. The firmer AUD came despite some weakness in commodity prices overnight.
Oil and copper were both over 1% weaker last night.
Oil's run up was tapered by the notion that any price rise flowing from an OPEC led reduction in supply would be met by increased supplies from other sources. The price of iron ore moved another step higher yesterday and now stands at US$82.25 per tonne.
German industrial production rose 0.3% in October to be up 1.2% over the year. Growth in Germany appears to be slow but steady.
UK house prices rose 6.0% over the year to November having risen 0.2% in the month of November. Brexit, at this stage, does not appear to have had a large impact on UK dwelling prices.
That said, industrial production in the UK fell 1.1% in the year to October despite the benefit of a weaker pound.
The JOLTS job opening report noted that there were 5.543 million job openings in the US during October. This was marginally lower than the 5.631 million reported in September.