BT Monthly Markets Chart Pack – October 2009 An overview of movements in global financial markets
Nov 29, 2014
BT Monthly Markets Chart Pack – October 2009
An overview of movements in global financial markets
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Global share markets weaker across the board in October...
Global share markets were weaker across the board in October thanks in large part to concerns that corporate earnings will fail to justify the huge run-up in share prices since March of this year. In the US the market closed the month 2.0% lower and this had a knock-on effect elsewhere, with markets in Europe (-4.5%), the UK (-1.7%) and Japan (-1.0%) all closing in the red.
The Australian share market ended its run of seven consecutive monthly gains in October, with the S&P/ASX 200 Accumulation Index closing 2.1% lower. The fall came after a poor lead from the US market overshadowed some better-than-expected consumer confidence and unemployment numbers.
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Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.Source: BT Financial Group, MSCI
Impact of major market events on global shares since 1987
…but continue to perform well over the long-term, despite some major market events
700
1,200
1,700
2,200
2,700
3,200
3,700
4,200
4,700
5,200
5,700
6,200
Oct-87 Oct-89 Oct-91 Oct-93 Oct-95 Oct-97 Oct-99 Oct-01 Oct-03 Oct-05 Oct-07 Oct-09
Jan 91Gulf War
Feb 94Bond Market Crash
Aug 97Asian Currency Crisis
Jul 98Russian Bond Crisis
Jul 01Tech Wreck
Sep 01Attack on Twin Towers
Jun 07US Sub-prime Crisis
Nov 89Fall of the Berlin Wall Mar 03
Troops enter Iraq
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Source: BT Financial Group, Premium Data
S&P/ASX 200 Accumulation Index – year to 31 October 2009
The Australian share market closed 2.1% lower in October
21,000
22,500
24,000
25,500
27,000
28,500
30,000
31,500
33,000
34,500
31/10/2008 31/12/2008 28/02/2009 30/04/2009 30/06/2009 31/08/2009 31/10/2009
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Key Australian economic news – October
As was widely expected, the Reserve Bank raised interest rates by a further 0.25% (to 3.50%) at its early November meeting. With the local economy well placed compared to many of its global counterparts, the Bank has now shifted its focus from growth to inflation.
The Consumer Price Index rose by 1.0% in the September quarter and was 1.3% higher for the year. The rise was slightly higher than the market had expected and follows a 0.5% jump in prices in the June quarter.
The Australian economy gained 40,600 jobs in September and this helped to bring the unemployment rate down from 5.8% to 5.7%.
The Westpac/Melbourne Institute’s consumer sentiment survey jumped another 1.7% in October – its fifth consecutive monthly gain.
Retail trade fell 0.2% in September, though it remains 6.0% higher for the year.
Source: BT Financial Group
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The Australian dollar hits US$0.93 cents on expectations of further interest rate hikes
The Australian dollar (A$) continued its remarkable run against its US counterpart in October, gaining a further 1.8% on expectations that the RBA would raise interest rates again in November. The local currency hit as high as US$0.9310 cents before eventually closing at US$0.8991 cents.
The A$ is now up 50% against the US$ since hitting a low of US$0.6012 cents in October last year and looks set to test the US$0.95 cent mark within the next couple of months.
At the end of October:
A$1 bought US$0.8991 +1.8%
€0.6114 +1.2%
¥80.99 +2.1%Source: BT Financial Group
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Currency markets – A$ per US dollar
Source: BT Financial Group. Figures at 31 October 2009
0.6300
0.6600
0.6900
0.7200
0.7500
0.7800
0.8100
0.8400
0.8700
0.9000
0.9300
0.9600
0.9900
Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09
The Australian dollar versus the US dollar…
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Currency markets – A$ per Euro
the Euro…
0.4900
0.5050
0.5200
0.5350
0.5500
0.5650
0.5800
0.5950
0.6100
0.6250
0.6400
0.6550
Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09
Source: BT Financial Group. Figures at 31 October 2009
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and the Yen
55
60
65
70
75
80
85
90
95
100
105
110
Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09
Currency markets – A$ per Yen
Source: BT Financial Group. Figures at 31 October 2009
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Official world interest rate movements – October
It was yet another dull month in terms of interest rate movements, with all the major central banks keeping their respective benchmark rates on hold in October. The Reserve Bank of Australia moved to raise the official cash rate by 0.25% in early November.
Current rate Last movedDirection of last move
Australia 3.50% Nov 2009
US 0% - 0.25% Dec 2008
Europe (ECB) 1.00% May 2009
Japan 0.10% Dec 2008
United Kingdom 0.50% Mar 2009
Source: BT Financial Group
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Source: BT Financial Group
31 October 2009
Global share market returns
1 year 3 years (pa) 5 years (pa)
Global
S&P 500 Index (US) 6.96% -9.06% -1.72%
Nasdaq (US Tech.) 18.84% -4.75% 0.70%
Nikkei 225 (Japan) 17.00% -15.10% -1.41%
Hang Seng (Hong Kong) 55.73% 5.88% 10.75%
DAX (Germany) 8.56% -4.76% 6.46%
CAC (France) 3.46% -12.30% -0.54%
FTSE 100 (UK) 15.24% -6.29% 1.76%
Australia
S&P/ASX 200 Accum. Ind. 21.39% -0.55% 8.85%
S&P/ASX Small Ordinaries 39.65% -4.19% 5.97%
S&P/ASX 300 Listed Prop. -6.11% -21.41% -6.79%
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Short-term asset class performance
Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A , UBS Bank Bill 0+ years
1-year rolling returns to 31 October 2009 (%) Best performing asset class for the year
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994
Australian cash
3.83 7.80 6.61 5.90 5.71 5.54 4.88 4.67 5.61 6.07 4.94 5.14 5.98 7.68 7.87 5.05
Australian bonds
4.89 10.59 3.62 4.40 5.18 7.17 4.15 4.24 11.67 7.60 -0.61 9.65 13.23 14.56 16.60 -6.11
Australian property
-6.11 -56.36 18.48 29.13 12.25 28.99 6.35 10.23 21.22 12.55 -0.27 19.19 17.16 14.33 8.87 0.24
Australian shares
21.39 -37.79 30.27 26.12 23.16 20.51 12.13 -2.81 3.31 19.11 13.99 10.17 9.69 17.51 6.99 -1.03
International bonds
13.42 5.10 5.43 5.48 6.49 9.23 7.26 7.76 12.83 6.68 1.29 10.69 10.62 11.48 17.82 -2.54
International shares
-14.53
-17.66 -0.24 16.95 13.00 7.35 -3.48 -22.89 -23.79 24.42 22.15 30.76 31.83 11.54 6.87 -3.43
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Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A
1-year returns to 31 October 2009 (%)
Short-term asset class performance (cont’d)
-14.5
13.4
21.4
-6.1
4.9
-17.7
5.1
-37.8
-56.4
10.6
31 October 2008
31 October 2009
Australian bonds
Listed property
Australian shares
Global bonds
Global shares
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Long-term asset class performance
Note: Accumulated returns based on $1,000 invested in December 1984Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years
31 October 2009
Australian bonds
Listed property
Australian shares
Cash
Global shares
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Source: BT Financial Group. West Texas Intermediate oil price at 31 October 2009
Oil prices – US$ per barrel
Oil prices ended the month higher on the back of a weaker US$ and expectations of rising demand
$0
$15
$30
$45
$60
$75
$90
$105
$120
$135
$150
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
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