Transcript Document

Markets chartpack
February 2007
Key Australian economic news
January

Retail Trade – Retail Sales grew less than expected in November
and are up 6.7% over the past 12 months. Retail trade has grown
by 7.2% over the year.

Employment – the December report was strong – 44,600 jobs
were created. In the past year employment has risen 3%. The
unemployment rate was 4.6%.

Inflation – Headline CPI fell by 0.1% in the December quarter (the
first fall since the March quarter of 1999). The CPI has increased
3.3% in the past year (down from 3.9% in the year to the
September quarter).
US Economy

US Federal Reserve appears to be ‘on hold’ – no interest rate
increases expected.




Continued signs of softness in manufacturing
Housing sector probably has further to fall
However, overall economic growth does not seem under threat
Inflation news continues to be good
“We remain of the view that the “soft landing” may still turn hard.
But so far there is little to worry about, and markets have responded
accordingly.”
BT Chief Economist, Chris Caton
Global indices
1 year (%)
3 years (% pa)
5 years (% pa)
US (S&P 500)
12.36
8.34
4.94
US Tech (Nasdaq)
6.86
6.04
4.96
Japan (Nikkei)
4.41
17.25
11.70
HK (Hang Sang)
27.63
14.80
13.39
Germany (DAX)
19.65
18.71
5.86
France (CAC)
13.35
15.52
4.68
S&P/ASX 300
22.50
26.05
15.56
Small companies
31.76
27.42
19.16
Resources
7.34
34.12
23.71
Listed Property
38.86
26.78
20.34
Australia
Source: BT Financial Group. Figures as at 31 January 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
38.9
31-Jan-06
31-Jan-07
25.0
22.5
19.7
13.4
10.6
5.9
3.5
0.9
-2.0
Australian Bonds Listed Property
Australian
shares
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
Currency markets – $A per $US
AUD/USD
0.8500
0.8000
0.7500
0.7000
0.6500
0.6000
0.5500
0.5000
0.4500
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Source: BT Financial Group. Figures as at 31 January 2007.
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Currency markets – $A per Euro
AUD/EUR
0.6500
0.6300
0.6100
0.5900
0.5700
0.5500
0.5300
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Source: BT Financial Group. Figures as at 31 January 2007.
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Currency markets – $A per Yen
AUD/JPY
98.0000
93.0000
88.0000
83.0000
78.0000
73.0000
68.0000
63.0000
58.0000
Jan 02
Jul 02
Jan 03
Jul 03
Jan 04
Source: BT Financial Group. Figures as at 31 January 2007.
Jul 04
Jan 05
Jul 05
Jan 06
Jul 06
Jan 07
Oil prices (US$ 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 31 January 2007.
Official world interest rates
Current rate
Last move
Direction of last
move
Australia
6.25%
November
2006

US
5.25%
June 2006

Japan
0.25%
July 2006

UK
5.25%
January 2007

Canada
4.25%
May 2006

Source: BT Financial Group.
2007 Inflation Forecasts (%)
Month of Forecast *
•
* Figures show the consensus expectations as at the month surveyed and over time reveal changes in
expectations. ie. Australian inflation expectations for 2007 have declined from 2.8% in the December
reading to 2.7% in the latest survey.
Source: Consensus Economics
2007 World Growth Forecasts (%)
Month of Forecast
Source: Consensus Economics
2007 Asian Growth Forecasts (%)
Month of Forecast
Source: Consensus Economics