Australian Economics Weekly 17-05-13 (1)

7/30/2019 Australian Economics Weekly 17-05-13 (1)

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AUSTRALIAN ECONOMICS WEEKLY

AUSTRALIAN ECONOMICS

ANZ RESEARCH

17 MAY 2013

INSIDE

Economic Update 1Week Ahead 2

In Focus 3Data Calendar 7Forecasts 11

CONTACT

[email protected]

Editor:

Ivan Colhoun

Chief Economist

(Australia)+61 2 9227 [email protected]

FISCAL POLICY UNLIKELY TO WEIGH ON NEAR-TERM ECONOMIC GROWTH;

A SUSTAINED DECLINE IN AUD WOULD SUPPORT ECONOMYS TRANSITION

There were three key developments over the past week in Australia. Most

importantly, the AUD continued its sharp fall, trading close to USD0.9750 at the time

of writing, marking the second consecutive weekly decline of around USD0.03. The

April NAB business survey revealed continuing weak business conditions across

many parts of Australia, with the employment component of the survey remaining

disappointing and suggestive of further unemployment rate rises. Meanwhile the

Australian Treasurer confirmed that the Budget position was significantly worse than

expected, mainly driven by $63bn of revenue write-downs over the coming four

years. The Government has outlined a pathway back to surplus over the next 3-4

years, with most of this improvement back-loaded into the third and fourth budget

years. With the Government making no significant net imposts on the economy in

the 2013-14 fiscal year, the Budget will not be especially relevant to the RBAs

thinking over coming months, which will more be driven by the data and whether

they show sufficient momentum being achieved in the non-mining parts of the

economy to offset the forthcoming slowing in mining investment over 2014 and

2015. News flow during the week continued the trend whereby uncommitted mining

projects are being cancelled or indefinitely delayed.

The AUD has now fallen five and a half cents in the past two weeks. There

have been widespread reports of hedge funds shorting the currency. ANZ has been

expecting the currency to remain reasonably supported this year, before weakening

over 2014 and 2015 back towards our fair value estimates of USD0.90-0.95, driven

by the reduced investment flows associated with the financing of the mining

investment boom. Its possible the markets are moving ahead of this development

but to be fair other fundamentals have also become somewhat less supportive of the

AUD in coming weeks with global diversification flows losing some vigour, commodity

prices generally softening (perhaps as investors worry less about inflation concerns)

and Australian interest rate differentials have narrowed further to the rest of the

world. A lower AUD if sustained would be a helpful factor in facilitating the transition

from mining investment-led growth.

CHART OF THE WEEK: NAB BUSINESS CONDITIONS MINING V WEAKSECTORS

-40

-30

-20

-10

0

10

20

30

40

50

60

70

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

Mining Weak sectors* All industries

Index(3mma-weightedbyGDPshare)

* Includes manufacturing, retail, construction and wholesale

Business conditions long run average

Sources: ANZ, NAB


2/14

Australian Economics Weekly / 17 May 2013 / 2 of 14

IN FOCUS

Our I n Fo cu sarticle this week previews the important CAPEX data release, to be

published on Thursday 30th May, ahead of the RBAs June Board meeting. ANZexpects the release to reveal significantly weaker mining investment intentions (we

interpret the previous expectations for mining CAPEX as errant). We would also be

very surprised if non-mining investment CAPEX intentions showed any significant

recovery, given the low level of capacity utilisation across the economy and the

rising vacancy rate for office space. As such, we continue to see a further cut in cash

rates as likely this year (most probably not until after the election), with downside

risk remaining to cash rates in 2014.

THE WEEK AHEAD

In Australia, the Minutes from the RBAs May Board meeting will be of interest.

However, since the meeting we have received the RBAs Statement on Monetary

Policy which suggested to us that the 25bp rate cut might be best described as fine

tuning rather than a significant change of view by the Bank on the economicoutlook. We do not expect the Minutes to provide much further colour on the recent

policy decision. Only second-tier Australian economic data are scheduled for release

next week. However, we will look at consumer confidence for May to determine

whether Q1 retail consumption strength is likely to have continued into Q2, as some

anecdotes have suggested. The latest reading will reflect the Federal Budget, the

recent moderate decline in the AUD and an interest rate cut. DEEWR internet job

vacancies data are also released. While we have received April reads for other job

ads measures (ANZ & SEEK job ads) which have shown signs of softening, DEEWRs

series provides a good industry level break down. The Tasmanian State budget is

tabled on Thursday.

In New Zealand, we expect April trade data to print a little stronger than the

market expects and for the trade balance to improve modestly to NZD400m. In China, the HSBC flash manufacturing PMI for May will be the key focus and is

published on Thursday. After printing below expectations in April, the market is

expecting the series to have consolidated at current levels in May. The Bank of Japan

meets next week but is not expected to change its monetary policy stance or

commentary. Japanese trade data for April are also released.

In Europe, the key data will be the advanced May PMIs for the euro zone. We and

the market expect these data to be little changed from Aprils reads, suggesting that

activity remains soft in the region. Recently, there has been concern that the

weakness in the euro zone is beginning to spread to the core member economies. In

view of this, the German IFO for May (on Friday) will be watched closely. European

Central Bank President Mario Draghi is scheduled to speak on the future of Europe

in the global economy and any comments on the euro will be of particular interest.For the UK, commentary around the Bank of Englands May monetary policy meeting

will be provided in next weeks Minutes. A few members, including the Governor,

voted for further quantitative easing. UK GDP data for Q1 are also released (on

Thursday).

In the US, Federal Reserve Chairman Ben Bernanke will deliver his semi-annual

testimony on Wednesday. In previous testimonies Bernanke has stressed the slow

pace of the recovery and a labour market that is far from normal. We do not believe

the tone of this testimony will be altered significantly. Given the risks from the large

fiscal drag on the US economy, we expect Bernanke and the Fed will remain cautious

in any tapering of the current USD85bn per month asset purchase program. The

Minutes from the FOMCs May meeting will likely also reflect this. In terms of

economic data, we will be looking at the Kansas City Fed manufacturing activitysurvey for May, which we expect will be a little softer, like other May regional PMI

indices to date. There is a public holiday in Canada on Monday and Bank of Canada

Governor Mark Carney will speak.


3/14


IN FOCUS

Q1 Private capital expenditure (CAPEX) survey preview

The CAPEX survey released on 30th May will include firms second estimate oftheir investment intentions for 2013-14 and their sixth estimate for 2012-13.

Firms first estimate of their investment intentions for 2013-14 was more

positive than we expected but this largely reflected a surprise increase in

mining firms CAPEX outlook. This was at odds with the fact that a large number of

resources projects have been cancelled or deferred and the shift in resource

companies focus towards controlling costs rather than pursuing expansion.

Furthermore, there has been a clear shift in the funding environment, with a number

of projects finding greater difficulty in obtaining finance. As a result, we expect that

mining firms second estimate of their investment intentions for 2013-14 will

be downgraded (quite likely substantially).

With the peak in mining investment approaching the RBA is cognisant thatnon-mining investment has to pick up. In the near-term, non-mining investment

is however likely to remain soft at best according to business surveys and non-

residential building approvals. The Q4 2012 CAPEX survey pointed to some

upturn in non-mining investment in 2013-14 but the degree of this is highly

uncertain. For this reason, the second estimate of non-mining firms investment

intentions will be keenly watched. With low levels of capacity utilisation, a significant

strengthening would be a surprise

The CAPEX survey also reports actual investment for Q1 2013. We expect restrained

growth in real investment in Q1 as mining investment approached its peak and

non-mining investment remained sluggish. Monthly capital imports data also point to

weakness in machinery and equipment capital expenditure, although some bounce

back was experienced for capital imports in April.

WHAT TO LOOK FOR: KEY NUMBERS

As background, firms provide seven successive estimates for their expected

investment. The Private New Capital Expenditure and Expected Expenditure (CAPEX)

release on 30th May includes firms sixth estimate for 2012-13 investment intentions and

their second estimate for intended capital spending for 2013-14. There is always

uncertainty around these estimates and realised investment and for this reason, firms

raw investment intentions must be adjusted for historical biases (using so-

called realisation ratios). This is a highly subjective process and the figures below

need to be interpreted in broad terms.

Broadly speaking, a r a waggregate nominal investment intention for 2013-14 of

around AUD145bn would imply a ct u alinvestment of around AUD160bn, afteraccounting for historical realisation bias. This would represent no growth

relative to expected investment for 2012-13 (Figure 1). (This uses 2011-12

realisation ratios.) Such an outcome would be broadly in line with our current forecasts

and would support the view that monetary policy could still afford to be eased a little

more.

A r awaggregate investment intention of around AUD130bn for 2013-14 would

imply a decline in actual nominal investment of around 10% y/y. This would be

a sharper fall than currently expected by the RBA.

In contrast, a r awaggregate investment intention of around AUD160bn for

2013-14 would imply growth of around 10% y/y compared with 2012-13. This

would be a stronger result than both we and the RBA currently forecast and wouldsupport the view that there is less scope for further RBA policy easing. Given the

weaker profile for mining investment, however, the likelihood of this scenario

eventuating appears unlikely.

Dylan Eades

Economist+61 2 9227 [email protected]


4/14


IN FOCUS

FIGURE 1: SECOND ESTIMATE OF INTENDED 2013-14 TOTAL CAPEX SCENARIOS*

0

20

40

60

80

100

120

140

160

180

200

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

AUDbn

Capital expenditure

Expectations

High

Mid

Low

* Expectations adjusted using 2011/12 realisation ratio; 2012/13 figure is an estimate

Sources: ABS, ANZ

A r a wmining CAPEX intention of around AUD100bn or above for 2013-14 would

be higher than we expect and would imply growth of around 5% y/y on 2012-13

expected capital expenditure (Figure 2). An estimate of around AUD90bn would be

broadly in line with our expectations, suggesting a decline in mining investment of

around 5% y/y in 2013-14. A raw estimate ofAUD80bn or below would imply that

mining investment would fall at least 15% y/y in 2013-14, suggesting that

investment in this sector would be a much bigger drag on growth over 2013-14

than we are currently forecasting. We remain of the view that resources and

related investment will decline more sharply in the second half of 2014 and over

2015 as investment in the LNG sector wanes.

FIGURE 2: SECOND ESTIMATE OF INTENDED 2013-14 MINING CAPEX SCENARIOS

0

20

40

60

80

100

120

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

AUDbn

Capital expenditure

Expectations

High

Mid

Low

* Expectations adjusted using 2011-12 realisation ratio; 2012-13 figure is an estimate

Sources: ABS, ANZ


5/14


IN FOCUS

Despite past interest rate cuts by the RBA there is little evidence of the

beginnings of a significant upswing in non-mining investment, with the highAustralian dollar, weak business confidence and substantial spare production

capacity weighing on non-mining investment intentions. As mentioned above, the

Q4 2012 CAPEX survey suggested at least a modest rise in non-mining investment

intentions for 2013-14. As always, however, these figures (and especially the first

reading) need to be interpreted with care as they are often revised significantly and are

dependent on the realisation ratios that are applied. Furthermore, other indicators of

non-mining investment point to ongoing weakness in at least the near-term. Year-ahead

CAPEX expectations as reported in the quarterly NAB business survey improved modestly

in Q1 but remained at a low level. Low levels of capacity utilisation are also consistent

with a subdued investment outlook this year as businesses havescope to use existing

assets more intensively.

FIGURE 3: PRIVATE NON-RESIDENTIAL BUILDING APPROVALS V CAPACITYUTILISATION

Sources: ABS, NAB

A r a wnon-mining investment intention of around AUD55bn for 2013-14 would be

in line with our current forecasts and would imply growth of around 5% y/y

(Figure 4). An estimate of around AUD60bn or above would be significantly stronger thanour forecasts, suggesting a rise in non-mining investment of at least 15% y/y in 2013-14.

Meanwhile, an estimate of AUD50bn or below would be weaker than our current forecasts

and imply a decline of around 5% in 2013-14.


6/14


7/14


DATA & EVENT CALENDAR

WEEK STARTING 20 MAY

DATE COUNTRY DATA/EVENT PERIOD MARKET ANZ LAST GMT AEST

Monday NZ Performance Services Index Apr -- 55.0 55.4 22:30 08:30

20-May JN Nationwide Department Sales y/y Apr -- -- 3.9% 05:30 15:30

US Chicago Fed National Activity Index Apr -- -- -0.2 12:30 22:30

Fed's Evans (Voter) Speaks on Economy in Chicago 17:00 03:00

CA Public Holiday: Victoria day -- --

Tuesday NZ Net Migration sa Apr -- 800 1,220 22:45 08:45

21-May Credit Card Spending y/y Apr -- 2.9% 3.6% 03:00 13:00

Credit Card Spending sa m/m Apr -- 0.0% -0.3% 03:00 13:00

RBNZ 2yr Inflation Expectation Q2 -- 2.2% 2.2% 03:00 13:00

AU RBA Board May Meeting Minutes 01:30 11:30

GE Producer Prices m/m Apr -0.3% -- -0.2% 06:00 16:00

Producer Prices y/y Apr 0.0% -- 0.4% 06:00 16:00

UK Core CPI y/y Apr 2.2% -- 2.4% 08:30 18:30

CPI m/m Apr 0.5% -- 0.3% 08:30 18:30

CPI y/y Apr 2.7% -- 2.8% 08:30 18:30ONS House Price y/y Mar -- -- 1.9% 08:30 18:30

PPI Input nsa m/m Apr -1.0% -- -0.1% 08:30 18:30

PPI Input nsa y/y Apr 0.8% -- 0.4% 08:30 18:30

US Fed's Bullard (Voter) Speaks on Monetary Policy in Frankfurt 15:30 01:30

Fed's Dudley (Voter) Speaks in New York 17:00 03:00

CA BoC Governor Carney Speaks 16:30 02:30

FI ECB's Liikanen Speaks in Helsinki 07:25 17:25

Wednesday AU Westpac Consumer Confidence Index May -- -- 104.9 00:30 10:30

22-May Westpac Consumer Confidence sa m/m May -- -- -5.1% 00:30 10:30

DEEWR Internet Skilled Vacancies m/m Apr -- -- 0.1% 01:00 11:00

JN BoJ Target Rate 1-May -- -- -- 14:00 00:00

Merchandise Trade Balance Total Apr -669.0b -- -364.0b 23:50 09:50

Merchandise Trade Exports y/y Apr 5.0 -- 1.1 23:50 09:50

Merchandise Trade Imports y/y Apr 7.7 -- 5.6 23:50 09:50

EU ECB Euro zone Current Account sa Mar -- -- 16.3b 08:00 18:00ECB's Praet Speaks on Monetary Policy in Washington 16:30 02:30

UK Bank of England Minutes 08:30 18:30

PSNB ex Interventions Apr 9.0b -- 15.1b 08:30 18:30

Public Finances (PSNCR) Apr -- -- 31.3b 08:30 18:30

Public Sector Net Borrowing Apr -- -- 16.7b 08:30 18:30

CBI Trends Selling Prices May -- -- 8.0 10:00 20:00

CBI Trends Total Orders May -18.0 -- -25.0 10:00 20:00

US MBA Mortgage Applications 17-May -- -- -7.3% 11:00 21:00

Existing Home Sales Apr 5.0m -- 4.9m 14:00 00:00

Existing Home Sales m/m Apr 1.4% -- -0.6% 14:00 00:00

Fed's Bernanke Testifies on Economic Outlook 14:00 00:00

Fed Releases Minutes from Apr 30 - May 1 FOMC Meeting 18:00 04:00

CA Retail Sales Less Autos m/m Mar 0.2% -- 0.7% 12:30 22:30

Retail Sales m/m Mar 0.2% -- 0.8% 12:30 22:30

Thursday AU Consumer Inflation Expectation May -- -- 2.2% 01:00 11:00

23-May Tasmanian State Budget -- --

CH HSBC Flash Manufacturing PMI May 50.4 -- 50.4 01:45 11:45

EU ECB's Noyer Speaks in Paris 07:00 17:00

PMI Composite May A -- -- 46.9 08:00 18:00

PMI Manufacturing May A 47.0 -- 46.7 08:00 18:00

PMI Services May A 47.2 -- 47.0 08:00 18:00

ECB's Liikanen Speaks in Copenhagen 11:05 21:05

ECB's Coeure Speaks in Copenhagen 12:50 22:50

Euro zone C onsumer C onfidence May A -22.0 -- -22.3 14:00 00:00

ECB's Draghi Speaks in London 19:30 05:30

GE PMI Manufacturing May A 48.4 -- 48.1 07:30 17:30

PMI Services May A 49.9 -- 49.6 07:30 17:30

UK Exports Q1 P -1.0% -- -1.6% 08:30 18:30

GDP q/q Q1 P 0.3% -- 0.3% 08:30 18:30GDP y/y Q1 P 0.6% -- 0.6% 08:30 18:30


8/14


DATA & EVENT CALENDAR

DATE COUNTRY DATA/EVENT PERIOD MARKET ANZ LAST GMT AEST

Thursday US Revisions: New Home Sales 00:00 10:00

23-May 10:05 20:05

continued Continuing Claims 11-May -- -- 3,009k 12:30 22:30

Initial Jobless Claims 18-May 346k -- 360k 12:30 22:30

Markit US PMI Preliminary May 52.5 -- -- 12:58 22:58

House Price Index m/m Mar 0.8% -- 0.7% 13:00 23:00

House Price Purchase Index q/q Q1 -- -- 1.4% 13:00 23:00

New Home Sales Apr 425k -- 417k 14:00 00:00

New Home Sales m/m Apr 1.9% -- 1.5% 14:00 00:00

Kansas City Fed Manufacturing Activit May -- -- -5.0 15:00 01:00

-- --

AS 09:15 19:15

Friday NZ Exports Apr 4.1b 4.4b 4.4b 22:45 08:45

24-May Imports Apr 3.5b 4.0b 3.7b 22:45 08:45

Trade Balance Apr 515m 400m 718m 22:45 08:45

JN 02:55 12:55

EU -- --

10:00 20:00

12:30 22:30

15:45 01:45

GE GDP nsa y/y Q1 F -- -- -1.4% 06:00 16:00

GDP sa q/q Q1 F 0.1% -- 0.1% 06:00 16:00

IFO - Business Climate May 104.5 -- 104.4 08:00 18:00

IFO - Current Assessment May 107.2 -- 107.2 08:00 18:00

IFO - Expectations May 101.6 -- 101.6 08:00 18:00

US Cap Goods Orders Non-defense ex-air Apr 0.7% -- 0.9% 12:30 22:30

C ap Goods Shipments Non-defense ex-air Apr -- -- 0.5% 12:30 22:30

Durable Goods Orders Apr 1.7% -- -5.8% 12:30 22:30

Durables Ex Transportation Apr 0.5% -- -1.5% 12:30 22:30

FI 11:30 21:30

PO 08:00 18:00

ECB's Weidmann Speaks in Paris

US Treasury Auctions 10-year TIPS

ECB's Constancio Speaks on F inancial Regulation in Brussels

EU's Rehn Speaks on F inancial Regulation in Brussels

Bank of Finland Debate Between King, Katainen in Helsinki

Bank of Portugal's Costa at Conference on Institutional Reform

Fed's Bullard (Voter) to Speak on Monetary Policy in London

ECB's Nowotny at Austrian central bank press conference

BoJ Governor Kuroda speech at Nikkei Conference

EU's Rehn, Constancio & Barnier Speak at Brussels Fin. Reg Event


9/14


FIVE WEEKS AT A GLANCE

MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY

20 MAYPublic holiday (CA)

TA: Current account (Q1)PH: Balance of payments

(Apr)

HK: Unemployment (Apr)TH: GDP (Q1)US: Chicago fed index

(Apr), Feds Evans

speak

21 MAYNZ: Net migration (Apr),

RBNZ 2-year inflationexpectation (Q2)

AU: RBA Minutes

HK: CPI (Apr)GE: PPI (Apr)UK: PPI (Apr), CPI (Apr)

US: Feds Bullard & Dudley

speakCA: BoCs Carney speaks

22 MAYAU: Westpac consumer

conf. (May)TA: Unemployment rate

(Apr)

MA: CPI (Apr)JN: Trade (Apr), BoJ policymeeting

UK: BoE MinutesEU: Current account (May)US: Existing home sales

(Apr), FOMC Minutes,

Bernanke testifies toparliamentCA: Retail sales (Mar)

23 MAYAU: TAS state budget

CH: HSBC flash manuf. PMI(May)

TA: Ind. Prod (Apr)

SI: Ind. Prod (Apr), CPI(Apr)GE: PMIs (May A)

UK: Retail sales (Apr), GDP(Q1 P)EU: PMI (May A), Consumer

conf. (May A), OECD

Economic OutlookUS: House prices (Mar), Newhome sales (Apr), Kansas

City Fed manuf. Survey

(May), Feds Bullardspeaks

24 MAYNZ: Trade (Apr),

VN: CPI (May)PH: Trade (Mar)

TA: GDP (Q1 F)

GE: GDP (Q1 F), IFO (May)US: Durable & capital goodsorders (Apr)

27 MAY

Public holiday (UK, US)GE: Retail sales (Apr)

CH: Ind. profits (Apr)

HK: Trade (Apr)

28 MAY

US: S&P/CaseShiller homeprices (Mar, Q1), Richmond

Fed manuf. (May), Dallas Fed

manuf. (May), Consumerconfidence (May)

29 MAY

AU: Const. work done (Q1)SK: Current account (Apr)

JN: Retail sales (Apr)

TH: Policy meetingBR: Inflation (May), GDP(Q1), Policy meetingGE: CPI (May),

Unemployment (May)

CA: Policy meeting

30 MAY

NZ: Building permits (Apr)AU: Building approvals (Apr),

CAPEX (Q1)

SK: Business survey (Jun),Ind. prod. (Apr)HK: Retail sales (Apr)UK: Consumer confidence

(May)

EU: Confidence measures(May)

US: GDP (Q1 S), Pendinghome sales (Apr)CA: Current account (Q1)

31 MAY

NZ: ToT (Q1), ANZ activityoutlook (May)

AU: Private sector credit (Apr)

JN: CPI (May), Unemployment(Apr), Ind. prod. (Apr)TH: Current Account (Apr)IN: GDP (Q1)

EU: CPI (May), Unemployment

(Apr)US: Personal income &

spending (Apr), PCE (Apr),Chicago PMI (May), Univ. ofMichigan (May)

CA: GDP (Mar, Qq)

1 JUNECH: Manuf. PMI (May)2 JUNE

US: Bernanke speaks

3 JUNE

Public holiday (NZ)AU: Retail sales (Apr),

Company profits (Q1),Inventories (Q1)

CH: Non-manuf. PMI(May) & HSBC manuf. PMI

JN: Capital spending (Q1)TH: CPI (May)SK: CPI (May

SI: PMI (May)

ID: Inflation (May), Trade(Apr)

GE: PMIs (May F)UK: PMI manuf. (May)EU: PMI manuf. (May F)

US: Construction spending

(Apr), ISM manuf. (May)

4 JUNE

AU: ACT & Qld state

budget, Current account

(Q1), Net exports (Q1), RBApolicy meeting

UK: PMI construction (May)EU: PPI (Apr)

US: Trade (Apr), ISM newyork (May)

5 JUNE

NZ: Construction work done(Q1), ANZ commodity

prices (May)AU: GDP (Q1)

CH: HSBC services PMI(May)

TA: CPI (May), WPI (May)PH: CPI (May)UK: PMI services (May)

EU: PMI ser. (May F), GDP

(Q1 P), Retail sales (Apr)US: ADP employment

(May), ISM non-manuf.(May), Feds Beige Book,

Feds Fisher speaksCA: Building permits (Apr)

6 JUNE

AU: SA state budget, Trade(Apr)

GE: Factory orders (Apr)UK: BoE policy meeting

EU: ECB policy meetingUS: Flow of funds, Feds

Plosser speaks

CA: PMIs (May)

7 JUNE

SK: GDP (Q1 F)TA: Trade (May)

MA: Trade (Apr)GE: Current account (Apr), Ind.

Prod. (Apr)UK: Trade (Apr)

US: Non-farm payrolls (May)CA: Unemployment (May)8 JUNE

CH: Trade (May)

9 JUNECH: CPI (May), Ind. Prod

(May), PPI (May), Retail sales(May)

10 JUNE

Public holiday (AU, CH)

NZ: Manuf. Activity (Q1),QV house prices (May)

CH: Loans & moneysupply (May)

JN: GDP (Q1 F), Trade(Apr)

11 JUNE

Public holiday (CH)

NZ: ANZ truckometer (May)AU: Housing finance (Apr),

NAB business survey (May)MA: Ind. Prod. (Apr)

JN: BoJ policy meetingUK: Ind. prod. (Apr)

US: NFIB (May), JOLTS (Apr)

12 JUNE

Public holiday (CH)

NZ: Card spending (May)AU: Westpac consumer

conf. (Jun)JN: CGPI (May)

SK: Unemployment (May)IN: CPI (May)

UK: Jobless claims (May),ILO unemployment (Apr)

GE: CPI (May F)EU: Ind. prod. (Apr)

13 JUNENZ: RBNZ policy meeting

AU: Labour force (May)SK: BoK Meeting

ID: BI policy meetingUS: Retail sales (May), PPI

(May)

14 JUNENZ: Food prices (May)

HK: Ind. Prod (Q1), PPI (Q1)SI: Unemployment (Q1 f),

Retail sales (Apr)EU: CPI (May)

US: Univ. of Michigan conf.(Jun P), Ind. prod. (May)

17 JUNE

NZ: Performance servicesindex (May), Westpac

consumer confidence (Q2)

SI: Trade (May)IN: Policy meetingSK: PPI (CH)

EU: Trade (Apr),Employment (Q1)US: Empire manuf.

Survey (Jun), TIC flows

(Apr), NAHB housingmarket index (Jun)

18 JUNE

AU: NSW state budget, RBA

Minutes

JN: Ind. Prod. (Apr F)

CH: Property prices (May)UK: PPI (May), CPI (May),ONS house prices (Apr)

EU: ZEW survey (Jun)US: CPI (May), Housing starts& building permits (May)

19 JUNE

NZ: Current account (Q1)JN: Trade (May)

MA: CPI (May)

PH: BoP (May)UK: BoE MinutesEU: Construction output

(Apr)US: FOMC meetingCA: Wholesale sales (Apr)

20 JUNE

NZ: GDP (Q1)AU: FX transactions , RBABulletin (Jun qtr)

CH: HSBC flash manuf. PMI(Jun)TA: Policy meeting (May)

GE: PPI (May), PMIs (Jun A)EU: Consumer confidence(Jun A)

US: Markit PMI (Jun P), Philly

Fed survey (Jun), Existinghome sales (May)

21 JUNE

NZ: ANZ job ads (May), ANZconsumer confidence (Jun)

BZ: Foreign investment (May)

EU: Current account (Apr)CA: CPI (May)


10/14


CENTRAL BANK RELEASES FOR 2013

CENTRAL BANK RELEASES FOR 2013

JANUARY 2013 FEBRUARY 2013 MARCH 2013 APRIL 2013

3rd: FOMC Minutes (Dec)9th: BoT10th: ECB, BoE11th: BoK16th: COPOM17th: BoC18th: HKMA22nd: BoJ23rd: BoE Minutes24th: BSP29th: RBI31st: RBNZ, FOMC, BNM

5th: RBA7th: ECB, BoE8th: RBA SNP13th: BoJ18th: HKMA19th: BoJ Minutes, RBAMinutes20th: BoT, BoE Minutes

5th: RBA6th: COPOM7th: ECB, BoE, BoJ, BNM8th: BoC12th: BoJ Minutes14th: RBNZ, SNB, BSP, BoK19th: RBA Minutes, HKMA20th: BoE Minutes21st: RBA Bulletin, FOMC,CBC

2nd: RBA3rd: BoT4th: ECB, BoE, BoJ9th: BoJ Minutes16th: RBA Minutes17th: BoC, COPOM, BoEMinutes20th: HKMA24th: RBNZ25th: BSP26th: BoJ

MAY 2013 JUNE 2013 JULY 2013 AUGUST 2013

2nd: ECB, BoJ Minutes, FOMC7th: RBA9th: BoE, BNM10th: RBA SNP18th: HKMA21st: RBA Minutes22nd: BoJ, BoE Minutes27th: BoJ Minutes29th: BoT, COPOM

4th: RBA5th: BoC6th: ECB, BoE11th: BoJ13th: RBNZ, BSP14th: BoJ Minutes18th: RBA Minutes, HKMA19th: BoE Minutes20th: RBA Bulletin, FOMC,

SNB, CBC

2nd: RBA4th: ECB, BoE10th: BoT, COPOM11th: BNM16th: RBA Minutes17th: BoC, BoE Minutes20th: HKMA25th: RBNZ, BSP

1st: ECB, BoE, FOMC6th: RBA9th: RBA SNP14th: BoE Minutes17th: HKMA20th: RBA Minutes21st: BoT28th: COPOM

SEPTEMBER 2013 OCTOBER 2013 NOVEMBER 2013 DECEMBER 2013

3rd: RBA5th: ECB, BoE, BoC, BNM12th: RBNZ, BSP17th: RBA Minutes18th: BoE Minutes19th: RBA Bulletin, FOMC,SNB, HKMA23rd: CBC

1st: RBA2nd: ECB9th: COPOM10th: BoE15th: RBA Minutes16th: BoT19th: HKMA23rd: BoC, BoE Minutes24th: BSP31st: RBNZ, FOMC

5th: RBA7th: ECB, BoE, BNM8th: RBA, SNP19th: RBA Minutes, HKMA20th: BoE Minutes27th: BoT, COPOM

3rd: RBA4th: BoC5th: ECB, BoE12th: RBNZ, SNB, BSP17th: RBA Minutes18th: BoE Minutes19th: RBA Bulletin, FOMC,HKMA

Notes: Entries are the dates of central bank interest rate announcements, unless specified as minutes or otherwise. Dates are

indicative only and are subject to change by central bank authorities. 2013 dates are currently unavailable for a number of

central banks at this stage, dates will be added as the 2013 schedules are released.

Key: BI: Bank Indonesia; BNM: Central Bank of Malaysia (Bank Negara Malaysia); BoC: Bank of Canada; BoE: Bank of

England; BoK: Bank of Korea; BoJ: Bank of Japan; BoT: Bank of Thailand; BSP: Central Bank of the Philippines (Bangko

Sentral ng Pilipinas); CBC: Central Bank of the Republic China (Taiwan); ECB: European Central Bank; FOMC: Federal Open

Market Committee; HKMA: Hong Kong Monetary Authority; RBA: Reserve Bank of Australia; RBI: Reserve Bank of India;

RBNZ: Reserve Bank of New Zealand; SNB: Swiss National Bank; COPOM: Reserve Back of Brazil.

Sources: Central bank websites


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FORECASTS

AUSTRALIAN ECONOMIC INDICATORS 2011 2012 2013F 2014F 2015F

Economic activity (annual % change)

Private final demand 5.6 5.3 3.5 1.9 0.6

Household consumption 3.3 3.2 2.6 3.2 3.0

Dwelling investment 0.7 -4.5 3.9 5.9 6.6

Business investment 17.3 16.1 6.4 -2.8 -8.4

Public demand -0.2 2.4 -2.5 1.4 1.8

Domestic final demand 4.2 4.6 2.2 1.8 0.9

Inventories (contribution to GDP growth) 0.3 0.0 -0.1 0.0 0.0

Gross National Expenditure (GNE) 4.6 4.6 2.1 1.8 0.8

Exports -0.8 6.3 6.7 6.1 6.8

Imports 10.8 6.8 3.9 0.5 -6.9

Net Exports (contribution to GDP growth) -2.2 -0.1 0.6 1.3 3.0

Gross Domestic Product (GDP) 2.4 3.6 2.7 3.1 3.8Prices and wages (annual % change)

Inflation*: Headline CPI 3.3 1.8 2.0 2.3 2.4

Underlying (RBA core)^ 2.7 2.4 2.2 2.2 2.4

Wages 3.7 3.6 3.2 3.3 3.4

Labour market

Employment (annual % change) 1.8 1.0 1.3 1.5 1.2

Unemployment rate (annual average %) 5.1 5.2 5.6 5.8 5.9

External sector

Terms of trade (annual % change) 12.8 -10.2 -3.4 -0.8 -3.3

Current account balance: AUD bn -32.8 -54.4 -57.4 -51.1 -25.3

% of GDP -2.3 -3.7 -3.7 -3.2 -1.5* Includes carbon tax. ^ Average of RBA trimmed mean and weighted median statistical measures

AUSTRALIAN

INTEREST RATES CURRENT JUN 13 SEP 13 DEC 13 MAR 14 JUN 14 SEP 14 DEC 14 MAR 15 JUN 15 SEP 15 DEC 15

RBA cash rate 2.75 2.75 2.75 2.50 2.50 2.50 2.50 2.50 2.75 3.00 3.00 3.00

90 day bill 2.78 2.90 2.85 2.65 2.65 2.65 2.65 2.65 2.90 3.15 3.15 3.15

3 year bond 2.50 2.50 2.40 2.40 2.55 2.80 3.10 3.50 3.90 4.30 4.50 4.90

10 year bond 3.16 3.10 3.10 3.20 3.35 3.60 3.90 4.30 4.60 4.90 5.10 5.40

3s10s yield curve 0.66 0.60 0.70 0.80 0.80 0.80 0.80 0.80 0.70 0.60 0.60 0.50

3 year swap2.86 2.80 2.70 2.80 2.95 3.20 3.50 3.90 4.30 4.70 4.90 5.30

10 year swap 3.81 3.70 3.60 3.70 3.85 4.10 4.40 4.80 5.15 5.45 5.65 5.95

INTERNATIONAL

INTEREST RATES CURRENT JUN 13 SEP 13 DEC 13 MAR 14 JUN 14 SEP 14 DEC 14 MAR 15 JUN 15 SEP 15 DEC 15

RBNZ cash rate 2.50 2.50 2.50 2.50 2.75 3.00 3.00 3.25 3.50 3.50 3.75 4.00

NZ 90 day bill 2.65 2.75 2.75 2.75 3.17 3.25 3.25 3.67 3.75 3.75 4.17 4.25

US Fed funds note 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.50 0.75 1.00 1.25 1.50

US 2 year note 0.23 0.30 0.30 0.30 0.40 0.50 0.60 0.80 1.00 1.20 1.50 1.80

US 10 year note 1.88 1.80 1.80 2.00 2.25 2.50 2.70 3.00 3.20 3.40 3.60 3.90

Japan call rate 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

ECB refinance rate 0.50 0.75 0.75 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

UK repo rate 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50


12/14


FORECASTS

FOREIGN

EXCHANGE RATES CURRENT JUN 13 SEP 13 DEC 13 MAR 14 JUN 14 SEP 14 DEC 14 MAR 15 JUN 15 SEP 15 DEC 15

Australian exchange rates

AUD/USD 0.98 1.05 1.05 1.05 1.05 1.05 1.03 1.01 0.99 0.97 0.95 0.93

NZD/USD 0.81 0.84 0.84 0.84 0.84 0.84 0.83 0.81 0.80 0.78 0.77 0.76

AUD/ 99.8 105.0 110.3 110.3 110.3 115.5 113.2 110.9 108.7 106.5 106.5 106.5

AUD/ 0.76 0.80 0.78 0.77 0.75 0.73 0.69 0.66 0.65 0.63 0.63 0.63

AUD/ 0.64 0.70 0.71 0.69 0.67 0.66 0.63 0.61 0.60 0.58 0.58 0.58

AUD/NZD 1.20 1.25 1.25 1.25 1.25 1.25 1.25 1.24 1.24 1.24 1.24 1.24

AUD/CHF 0.94 0.98 0.98 0.97 0.95 0.93 0.90 0.87 0.86 0.84 0.84 0.84

AUD/CNY 5.99 6.51 6.46 6.41 6.35 6.30 6.13 5.97 5.78 5.62 5.62 5.62

AUD TWI 75.5 79.7 80.0 79.4 78.9 78.9 76.7 74.8 72.9 71.3 69.6 68.0

International cross rates

USD/ 102.3 100.0 105.0 105.0 105.0 110.0 110.0 110.0 110.0 110.0 110.0 110.0

/USD 1.29 1.32 1.34 1.37 1.40 1.44 1.50 1.53 1.53 1.53 1.53 1.53

/ 131.6 150.0 154.4 159.6 163.8 173.8 179.3 182.6 182.6 182.6 182.6 182.6

/USD 1.53 1.50 1.47 1.52 1.56 1.58 1.63 1.66 1.66 1.66 1.66 1.66

/ 0.84 0.88 0.91 0.90 0.90 0.91 0.92 0.92 0.92 0.92 0.92 0.92

USD/CHF 0.97 0.93 0.93 0.92 0.91 0.89 0.87 0.86 0.87 0.87 0.87 0.87

USD index 83.9 82.6 82.7 81.3 80.0 79.0 76.9 75.8 75.9 75.9 75.9 75.7

Asia exchange rates

USD/CNY 6.14 6.20 6.15 6.10 6.05 6.00 5.96 5.92 5.85 5.80 5.75 5.70

USD/HKD 7.76 7.78 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80

USD/IDR 9781 9900 9800 9800 9750 9750 9700 9700 9000 8900 8800 8700

USD/INR 54.9 52.5 52.0 51.5 51.0 50.5 50.0 49.5 47.5 47.0 46.5 46.0

USD/KRW 1117 1050 1040 1030 1020 1010 1000 990 990 980 970 960

USD/MYR 3.02 3.04 3.03 3.02 3.01 3.00 2.99 2.98 2.97 2.96 2.95 2.95

USD/PHP 41.2 40.3 40.1 39.8 39.7 39.6 39.5 39.4 40.0 40.0 40.0 40.0

USD/SGD 1.26 1.24 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25

USD/THB 29.79 30.40 30.30 30.20 30.10 30.00 29.90 29.80 30.30 30.30 30.20 30.10

USD/TWD 29.97 29.40 29.30 29.20 29.10 29.00 28.90 28.80 28.70 28.60 28.50 28.50

USD/VND 20985 20850 20900 20900 20950 20950 21000 21000 21000 21000 21000 21000

Pacific exchange rates

PGK/USD 0.454 0.488 0.488 0.488 0.488 0.488 0.488 0.488 0.488 0.488 0.488 0.488

FJD/USD 0.546 0.566 0.566 0.566 0.566 0.566 0.566 0.566 0.566 0.566 0.566 0.566


13/14


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Australian Economics Weekly 17-05-13 (1)

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