Markets chartpack February 2007. Retail Trade – Retail Sales grew less than expected in November and are up 6.7% over the past 12 months. Retail trade

Markets chartpack

February 2007

Retail Trade – Retail Sales grew less than expected in November and are up 6.7% over the past 12 months. Retail trade has grown by 7.2% over the year.

Employment – the December report was strong – 44,600 jobs were created. In the past year employment has risen 3%. The unemployment rate was 4.6%.

Inflation – Headline CPI fell by 0.1% in the December quarter (the first fall since the March quarter of 1999). The CPI has increased 3.3% in the past year (down from 3.9% in the year to the September quarter).

Key Australian economic newsJanuary

US Economy

US Federal Reserve appears to be ‘on hold’ – no interest rate increases expected.

Continued signs of softness in manufacturing

Housing sector probably has further to fall

However, overall economic growth does not seem under threat

Inflation news continues to be good

“We remain of the view that the “soft landing” may still turn hard.

But so far there is little to worry about, and markets have responded

accordingly.” BT Chief Economist, Chris Caton

Global indices

1 year (%) 3 years (% pa) 5 years (% pa)

US (S&P 500) 12.36 8.34 4.94

US Tech (Nasdaq)

6.86 6.04 4.96

Japan (Nikkei) 4.41 17.25 11.70

HK (Hang Sang) 27.63 14.80 13.39

Germany (DAX) 19.65 18.71 5.86

France (CAC) 13.35 15.52 4.68

Australia

S&P/ASX 300 22.50 26.05 15.56

Small companies

31.76 27.42 19.16

Resources 7.34 34.12 23.71

Listed Property 38.86 26.78 20.34Source: BT Financial Group. Figures as at 31 January 2007.

Asset class performance

Source: S&P/ASX 300 Acc Index, MSCI World ex Aust (net divs) Index in $A, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in AUD

Long-term asset class performance



Best performing asset class highlighted in red



5.9

10.6

19.7

3.5

38.9

22.5

0.9

13.4

25.0

-2.0-505

1015202530354045

Australian Bonds Listed Property Australianshares

Global Bonds InternationalShares

(12 month % return)

31-Jan-06

31-Jan-07


Currency markets – $A per $US

AUD/USD

0.4500

0.5000

0.5500

0.6000

0.6500

0.7000

0.7500

0.8000

0.8500

Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07

Source: BT Financial Group. Figures as at 31 January 2007.

Currency markets – $A per Euro

AUD/EUR

0.5300

0.5500

0.5700

0.5900

0.6100

0.6300

0.6500



Currency markets – $A per Yen

AUD/JPY

58.0000

63.0000

68.0000

73.0000

78.0000

83.0000

88.0000

93.0000

98.0000



Oil prices (US$ per barrel)

0

10

20

30

40

50

60

70

80

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Source: BT Financial Group. West Texas Intermediate as at 31 January 2007.

Official world interest rates

Current rate Last move Direction of last move

Australia 6.25% November 2006

US 5.25% June 2006

Japan 0.25% July 2006

UK 5.25% January 2007

Canada 4.25% May 2006

Source: BT Financial Group.

2007 Inflation Forecasts (%) Month of Forecast *

Source: Consensus Economics

• * Figures show the consensus expectations as at the month surveyed and over time reveal changes in expectations. ie. Australian inflation expectations for 2007 have declined from 2.8% in the December reading to 2.7% in the latest survey.

2007 World Growth Forecasts (%) Month of Forecast


2007 Asian Growth Forecasts (%)


Month of Forecast

Documents

Markets chartpack February 2007. Retail Trade – Retail Sales grew less than expected in November and are up 6.7% over the past 12 months. Retail trade