Transcript Document

Markets chartpack
May 2007
Interest rates on hold
Inflation data during April

The headline CPI rose by 0.1% in the March quarter,
following a fall of 0.1% in the December quarter.

In year-to terms, the headline CPI has increased by
2.4 %, down from 3.3% in the year to the December
quarter.

Lowest year-to rate since the September quarter of
2004.
Source: BT Financial Group Chief Economist Chris Caton
Interest rates on hold (cont)


Official interest rates rose three times in 2006 and
currently stand at 6.25%.
The most recent reading of inflation appear to have put
to rest expectations of another rise in the short term.
“The RBA still has a lot to think about. The recent
labour-market data suggest the economy still has a fair
head of steam, and wage pressures are increasing.
Credit growth is still strong. On the other hand, the
strong exchange rate is doing some of the work of an
official monetary-policy tightening.... in my view, rates
are on hold for the foreseeable future.”
Source: BT Financial Group Chief Economist Chris Caton
Official world interest rates
Current rate
Last move
Direction of last
move
Australia
6.25%
November
2006

US
5.25%
June 2006

Japan
0.50%
February 2007

UK
5.25%
January 2007

Source: BT Financial Group.
Australian dollar update

Our local currency has hit decade highs against the
US dollar recently. During April it rose:

3.03% against the US dollar

0.50% against the Euro

4.28% against the Yen
Australian dollar update (cont.)

In recent years, when the $A has risen, it is usually
because the US dollar has fallen.

The Australian dollar recently traded at 17-year highs
against the US dollar amid speculation of another
interest rate increase.

A strong currency affects the profitability of Australian
companies that compete with imports, that export, or
that earn profits offshore.
Source: BT Financial Group Chief Economist Chris Caton
Currency markets – $A per $US
AUD/USD
0.9000
0.8500
0.8000
0.7500
0.7000
0.6500
0.6000
0.5500
0.5000
0.4500
Apr 02
Oct 02
Apr 03
Oct 03
Apr 04
Source: BT Financial Group. Figures as at 30 April 2007.
Oct 04
Apr 05
Oct 05
Apr 06
Oct 06
Apr 07
Currency markets – $A per Euro
AUD/EUR
0.6500
0.6300
0.6100
0.5900
0.5700
0.5500
0.5300
Apr 02
Oct 02
Apr 03
Oct 03
Apr 04
Source: BT Financial Group. Figures as at 30 April 2007.
Oct 04
Apr 05
Oct 05
Apr 06
Oct 06
Apr 07
Currency markets – $A per Yen
AUD/JPY
103.0000
98.0000
93.0000
88.0000
83.0000
78.0000
73.0000
68.0000
63.0000
58.0000
Apr 02 Oct 02 Apr 03 Oct 03 Apr 04 Oct 04 Apr 05 Oct 05 Apr 06
Source: BT Financial Group. Figures as at 30 April 2007.
Oct 06 Apr 07
Global indices
1 year (%)
3 years (% pa)
5 years (% pa)
US (S&P 500)
13.11
10.21
6.60
US Tech (Nasdaq)
8.72
9.56
8.38
Japan (Nikkei)
2.92
13.95
8.65
HK (Hang Sang)
21.95
19.38
12.06
Germany (DAX)
23.28
22.96
8.00
France (CAC)
14.87
17.50
5.96
S&P/ASX 300
22.50
27.25
17.91
Small companies
32.87
30.98
22.19
Resources
10.77
39.59
27.35
Listed Property
33.20
24.01
19.26
Australia
Source: BT Financial Group. Figures as at 30 April 2007.
Asset class performance
Source: S&P/ASX 300 Acc Index, MSCI World ex Aust (net divs) Index in $A, S&P/ASX 300 Property Index, UBS Composite 0+
years index, Citigroup World Government Bond, Unhedged in AUD
Long-term asset class performance
Source: S&P/ASX 300 Acc Index, MSCI World ex Aust (net divs) Index in $A, S&P/ASX 300 Property Index, UBS Composite 0+
years index, Citigroup World Government Bond, Unhedged in AUD
Asset class performance
Source: S&P/ASX 300 Acc Index, MSCI World ex Aust (net divs) Index in $A, S&P/ASX 300 Property Index, UBS Composite 0+
years index, Citigroup World Government Bond, Unhedged in AUD
Best performing asset class highlighted in red
Asset class performance
(12 month % return)
45
40
35
30
25
20
15
10
5
0
-5
-10
38.0
30-Apr-06
30-Apr-07
33.2
27.7
22.5
18.0
6.3
4.5 5.0
-1.2
Australian Bonds Listed Property
Australian
shares
-3.3
Global Bonds
International
Shares
Source: S&P/ASX 300 Acc Index, MSCI World ex Aust (net divs) Index in $A, S&P/ASX 300 Property Index, UBS Composite 0+
years index, Citigroup World Government Bond, Unhedged in AUD
Oil prices (US$ per barrel)
80
70
60
50
40
30
20
10
0
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
Source: BT Financial Group. West Texas Intermediate as at 30 April 2007.