The New ‘Normal’Opportunities in a post-GFC worldediscoveryconsulting.blogspot.comSavanth SebastianEconomist, CommSec, March 2011
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State of Play US recovers but China dominates Australia struggles Budget under pressure Aussie consumers.. Conservatism reigns Tight job markets but seniors win Interest rates on hold Aussie dollar strength
So What?Issue: Global economy Exchange rates, trade, sharemarket, int. rates Drivers of world economy - Contribution to growth 2011 China 0.81% United States 0.74% India 0.18% Japan 0.14% Newly Industrialised Asia* 0.13% Germany 0.13% ASEAN 5 # 0.12% Brazil 0.11% Russia 0.10% United Kingdom 0.08% France 0.07% Canada 0.05% Other countries 1.70% World 4.40% Source: IMF & CommSec * Newly industrialised Asia – Hong Kong, Taiwan, Singapore and South Korea # ASEAN 5 – Indonesia, Malaysia, Thailand, Philippines and Vietnam
So What?Issue: Inflation Interest rates, social stability, consumer spending
So What?Issue: Climate Retail, transport, agriculture, insurance, construction Highest levels for the Southern Oscillation Index (SOI) August 1917 34.8 April 1904 31.7 November 1973 31.6 December 2010 27.1 June 1950 26.9 Source: BOM & CommSec
So What? Issue: Mining boom Interest rates, investment, economic policy Drivers of the Australian economy 2007 – 2010, % contribution to the change in GDPMining 17.4%Professional, scientific and technical 11.9%servicesConstruction 11.6%Financial and insurance services 10.8%Agriculture, forestry and fishing 10.8%Healthcare and social assistance 9.7%Education and training 5.1%Public administration and safety 5.1%Transport, postal and warehousing 3.8%Wholesale trade 3.5%Source: ABS & CommSec
So What?Housing issues Home prices to rise 5% in 2011So rental market still tight but home prices ease
So What?Issue: Interest rates Fixed/floating, asset allocation, returns
So What?Issue: Currency Asset allocation, budgeting, profitability, competition
So What?Issue: Shares Returns, portfolios, investor education, active/passive
CommSec forecasts ForecastsEconomic growth 2.75-3.00% in 2010/11 3.50% in 2011/12Inflation 2.75% in 2010/11 2.75%-3.00% in 2011/12Unemployment 4.75-5.00%, mid 2011 4.25-4.50%, end 2011Cash rate 5.00%, mid 2011 5.50%, end 2011Sharemarket 5,100 points, mid 2011 5,400 points, end 2011(Australian)Australian dollar US99c in June 2011 US92c in December 2011
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