Bt monthly markets chart pack july 2008
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BT Monthly Markets Chart Pack – July 2008 PowerPoint PPT Presentation


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BT Monthly Markets Chart Pack – July 2008. An overview of movements in global financial markets. Global share markets mixed in July.

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BT Monthly Markets Chart Pack – July 2008

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Bt monthly markets chart pack july 2008

BT Monthly Markets Chart Pack – July 2008

An overview of movements in global financial markets


Global share markets mixed in july

Global share markets mixed in July...

  • July was a mixed month for global share markets as a deteriorating outlook for the world economy and the re-emergence of problems in global credit markets were tempered by a significant drop in the price of crude oil.

  • For the second month in a row the Australian share market closed lower, with the S&P/ASX 200 Accumulation Index returning -4.6% in July thanks mainly to declines in the local Resources and Financials sectors. The deteriorating outlook for the global economy also contributed to the losses. So far this year the Australian market is down 19.8%, outpacing declines in the UK (-16.2%), Japan (-12.6%) and the US (-13.7%).


But continue to perform well over the long term despite some major market events

…but continue to perform well over the long-term, despite some major market events

Impact of major market events on global shares since 1986

Jul 01

Tech Wreck

Jun 07

US Sub-prime Crisis

Sep 01

Attack on Twin Towers

Jul 98

Russian Bond Crisis

Aug 97

Asian Currency Crisis

Nov 89

Fall of the Berlin Wall

Feb 94

Bond Market Crash

Mar 03

Troops enter Iraq

Oct 87

Wall Street

crash

Jan 91

Gulf War

Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.

Source: BT Financial Group, MSCI


The australian share market closed july 4 6 lower

The Australian share market closed July 4.6% lower

S&P/ASX 200 Accumulation Index – 2008

Source: BT Financial Group, Premium Data


Key australian economic news july

Key Australian economic news – July

  • The Reserve Bank of Australia (RBA) left interest rates on hold at 7.25% following its early August meeting. The RBA looks set to leave interest rates on hold for now as it tries to balance rising prices and a slowing economy, though an interest rate cut by the end of the year remains a possibility.

  • Retail trade fell 0.1% in June, it’s biggest drop in six years. The fall came after a revised rise of 0.9% in May. The market had expected a rise of 0.2%.

  • 29,800 jobs were added in June, much more than had been expected, while the unemployment rate ticked down 0.1% (to 4.2%).

  • Australia’s trade balance was in surplus by $411 million in June, following a deficit of $253 million in May.

  • Headline inflation figures came in stronger than expected in the June quarter, up 1.5% versus an anticipated rise of 1.2% and continuing the pattern seen around the world in recent months.

Source: BT Financial Group


The australian dollar fell in july

The Australian dollar fell in July

  • The Australian dollar (A$) closed the month lower against the US dollar as the threat of any more domestic interest rate hikes began to fade. With commodity prices still at high levels, the trend in the A$ is likely to remain up in the near-term, though we can probably expect it to fall back eventually as the market moves to price in rate cuts either later this year or early next year.

  • At the end of July:

    A$1 boughtUS$0.9417 -1.7%

    €0.6039 -0.7%

    ¥101.54flat

Source: BT Financial Group


The australian dollar versus the us dollar

The Australian dollar versus the US dollar…

Currency markets – A$ per US dollar

Source: BT Financial Group. Figures at 31 July 2008.


The euro

the Euro…

Currency markets – A$ per Euro

Source: BT Financial Group. Figures at 31 July 2008.


And the yen

and the Yen

Currency markets – A$ per Yen

Source: BT Financial Group. Figures at 31 July 2008.


Official world interest rate movements july

Official world interest rate movements – July

  • The European Central Bank raised interest rates a further 0.25% (to 4.25%) in July. It was the Bank’s first rate hike since June last year. Elsewhere, the Bank of England, the Bank of Japan and the Reserve Bank of Australia (in early August) left their benchmark interest rates on hold. The US Federal Reserve didn’t meet in July.

Source: BT Financial Group


Global share market returns

Global share market returns

31 July 2008

Source: BT Financial Group


Short term asset class performance

Short-term asset class performance

1-year rolling returns to 31 July 2008 (%)

Best performing asset class for the year

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$


Short term asset class performance cont d

Short-term asset class performance (cont’d)

1-year returns to 31 July 2008 (%)

31 July 2007

31 July 2008

Australian bonds

Listed property

Australian shares

Global bonds

Global shares

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$


Long term asset class performance

Long-term asset class performance

31 July 2008

Australian shares

Listed property

Global shares

Australian bonds

Cash

Note: Accumulated returns based on $1,000 invested in December 1984

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$


Bt monthly markets chart pack july 2008

After spiking above US$147 a barrel early in July, oil prices closed the month lower at just over US$124.

Oil prices – US$ per barrel

Source: BT Financial Group. West Texas Intermediate oil price at 31 July 2008.


Summary

Summary

  • The underlying strength of the Australian economy relative to its global counterparts looks set to continue in the near-term, though any significant deterioration in global growth will obviously have an adverse effect locally.

  • Though the RBA left interest rates on hold following its early August meeting, the Bank will no doubt be concerned by the high level of domestic inflation, which currently sits well outside its target band of 2-3%. However, if growth continues to slow as expected, it’s possible that we could see an interest rate cut by the end of the year.

  • The Australian dollar (A$) looks set to remain at high levels in the coming months, supported largely by high commodity prices. However, if interest rates here do start to fall, we should see the A$ start to slide as well.

  • Gains in global share markets, including here in Australia, are likely to remain under further pressure in the near-term as global growth continues to slow down.


Bt monthly markets chart pack july 2008

This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only.  Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described.  The presentation has been prepared without taking into account any personal objectives, financial situation or needs.  It does not contain and is not to be taken as containing any securities advice or securities recommendation.  Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice.  BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation.  Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person.  Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee.  It is important to note that past performance is not a reliable indicator of future performance.

This document was accompanied by an oral presentation, and is not a complete record of the discussion held.

No part of this presentation should be used elsewhere without prior consent from the author.

For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney time)


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