City East July 2010
-
Upload
bradmishra -
Category
Documents
-
view
221 -
download
0
Transcript of City East July 2010
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 1/26
Market update
City East
Carsten PedersenDirector, Financial Markets & InternationalWestpac Institutional Bank
July 2010
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 2/26
US Steroids filling the gap in 2010 not 2011
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 3/26
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 4/26
China PMI & industrial production turn
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 5/26
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 6/26
The terms of trade & nominal GDP growth
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 7/26
Australia: recovery and rotation
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 8/26
Westpac–MI unemployment expectations
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 9/26
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 10/26
Consumers turn cold on housing ...
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 11/26
Rate rises will again stretch mortgage belt
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 12/26
Population growth, led by migration
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 13/26
Participation to temper fall in u/e rate
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 14/26
Inflation: risk of return to 2008 spike
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 15/26
RBA responds to inflationary pressures
0.0
0.4
0.8
1.2
1.6
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10
%
0.0
0.4
0.8
1.2
1.6
%
Trimmed mean quarterly change
15
forecasts
GFC
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 16/26
The Australian dollar: actual versus fitted
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 17/26
The Australian dollar & 2yr swap spreads
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 18/26
AUD/USD & AUD/JPY
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 19/26
AUD/EUR & AUD/NZD
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 20/26
Australian dollar & US equities: volatility
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 21/26
Current Forecasts – July 2010
Latest Dec-10 Jun-11 Dec-11
RBA Cash 4.50 4.50 4.75 5.25
3yr swap 5.00 5.40 5.60 5.60
10yr 5.25 5.30 5.30 5.50
AUD/USD 0.89 0.90 0.90 0.86
AUD/EUR 0.69 0.70 0.72 0.73
AUD/NZD 1.23 1.22 1.20 1.19
EUR/USD 1.30 1.28 1.25 1.21
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 22/26
Cost of insurance against default
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 23/26
Bank bonds: net issuance surges
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 24/26
Key positives
Key Positives• Terms of trade will boost incomes and mining
investment.• Strong momentum from population growth.
• Confidence measures well above average levels.• Strong government fiscal position.• Sound banking system.• Export upswing driven by mining.• Sustainable gains in house prices.
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 25/26
Key negatives
Key Negatives• Sticky inflation causing further rate hikes.• Strong Australian dollar • Cautious consumers finally dealing with excessive
debt levels• Fiscal policy will be a growth drag in 2010 and 2011.• Funding and regulatory constraints on banks will
limit credit .• Slowdown in China and uncertain growth profiles for
US & Europe.
8/8/2019 City East July 2010
http://slidepdf.com/reader/full/city-east-july-2010 26/26
Westpac Institutional Bank is a division of Westpac Banking Corporation ABN 33 007 457 141.Information current as at date above. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information,consider its appropriateness, having regard to your objectives, financial situation or needs. Westpac’sfinancial services guide can be obtained by calling 132 032, visiting www.westpac.com.au or visiting anyWestpac Branch. The information may contain material provided directly by third parties, and while suchmaterial is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice toexclude liability for the information. The information is subject to change without notice and Westpac is
under no obligation to update the information or correct any inaccuracy which may become apparent at alater date. Westpac Banking Corporation is registered in England as a branch (branch number BR000106) and is authorised and regulated by The Financial Services Authority. Westpac EuropeLimited is a company registered in England (number 05660023) and is authorised and regulated by TheFinancial Services Authority. If you wish to be removed from our e-mail, fax or mailing list please send ane-mail to [email protected] or fax us on +61 2 8254 6934 or write to Westpac Economics atLevel 2, 275 Kent Street, Sydney NSW 2000. Please state your full name, telephone/fax number andcompany details on all correspondence. © 2010 Westpac Banking Corporation. Past performance is not areliable indicator of future performance. The forecasts given in this document are predictive in character.Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based arereasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks anduncertainties. The ultimate outcomes may differ substantially from these forecasts.
Disclaimer