The Australian Economy and

Financial Markets
Chart Pack November 2017
The Australian Economy and Financial Markets

Contents
Graphs
World Economy 13
Australian GDP Growth and Inflation 4
Household Sector 56
Business Sector 78
Credit and Money 9
Factors of Production and Labour Market 1011
Regions and Industry 1213
Government 14
Commodity Prices 15
Balance of Payments and External Position 1617
Interest Rates 1822
Share Markets 2324
Bond Issuance 2526
Exchange Rates 2728
Banking Indicators 2930
World Economy

GDP Growth World GDP Growth China and India

Year-ended Year-ended
% % % %
Major trading partners*
6 6 China
12 12
4 4

World**
2 2 8 8

India
0 0
4 4
-2 -2

-4 -4 0 0
2005 2009 2013 2017 2005 2009 2013 2017
*
**
Weighted using Australian export shares Sources: CEIC Data; RBA
PPP-weighted; accounts for 85 per cent of world GDP
Sources: ABS; CEIC Data; IMF; RBA; Thomson Reuters

GDP Growth Advanced Economies GDP Growth East Asia

Year-ended Year-ended
% % % %
Japan
US Euro area
4 4 10 10
Middle-income*

0 0 5 5

-4 -4 0 0
High-income**

-8 -8 -5 -5

-12 -12 -10 -10

2005 2009 2013 2017 2005 2009 2013 2017
*
**
Source: Thomson Reuters Indonesia, Malaysia, Philippines and Thailand; PPP-weighted
Hong Kong, Singapore, South Korea and Taiwan; PPP-weighted
Sources: CEIC Data; IMF; RBA

CHART PACK | NOVEMBER 2017 1

World Economy

Core Inflation Advanced Economies* Inflation China and India

Year-ended Year-ended
% % % %
US**

2 2 15 15

1 1 10 10

Euro area
India
0 0 5 5

Japan
-1 -1 0 0
China

-2 -2 -5 -5
2005 2009 2013 2017 2005 2009 2013 2017
* Excluding food and energy, and for the euro area also excluding Source: Bloomberg

**
alcohol and tobacco
Core price index for personal consumption expenditures
Source: Bloomberg

Unemployment Rate Advanced Economies Inflation East Asia

% % Year-ended
% %

Euro area Middle-income*

10 10 8 8

4 4
US
6 6

High-income**
Japan 0 0

2 2
2005 2009 2013 2017 -4 -4
Source: Bloomberg 2005 2009 2013 2017
*
**
Indonesia, Malaysia, Philippines and Thailand; PPP-weighted
Hong Kong, Singapore, South Korea and Taiwan; PPP-weighted
Sources: CEIC Data; IMF; RBA; Thomson Reuters

CHART PACK | NOVEMBER 2017 2

World Economy

China Activity Indicators China Residential Property Market*

Year-ended growth Year-ended growth
index Manufacturing PMI* Industrial production % % Floor space sold %
50 50
55 20
0 0

45 10 % %
Prices
10 10
% Fixed asset investment Real retail sales %
0 0

30 20
% Real estate development investment** %
30 30
15 10
0 0

0 0 -30 -30
2009 2013 2017 2009 2013 2017 2009 2011 2013 2015 2017
* Diffusion index; average of the official and Caixin * For sales and investment, a three-month moving average of the

**
Sources: CEIC Data; Markit Economics; RBA seasonally adjusted series is used to calculate growth
Investment by developers and other construction companies in the
development of residential property; includes land purchases
Sources: CEIC Data; RBA

China Financing*
Share of GDP China Output Indicators
% % 2007 average = 100
Total social financing flows** Fiscal balance
index index
Expenditure

Revenue Cement
30 15 180 180
Electricity
generation

Balance 140 140

15 0 Crude steel Plate glass

100 100

0 -15
2007 2012 2017 2007 2012 2017
*
60 60
**
Seasonally adjusted by RBA 2009 2013 2017 2009 2013 2017
Upper bound estimate adjusting for impact of local government bond
Sources: CEIC Data; RBA
issuance to pay off debt previously included in TSF
Sources: CEIC Data; RBA

CHART PACK | NOVEMBER 2017 3

Australian GDP Growth and Inflation

GDP Growth Consumer Price Inflation*

% %
Year-ended
4 4
% %
5 5
Year-ended
4 4

3 3
2 2
2 2

1 1
0 0
Quarterly 0 0
Quarterly
(seasonally adjusted)
-2 -2 -1 -1
1997 2002 2007 2012 2017 1997 2002 2007 2012 2017
Source: ABS * Excluding interest charges prior to the September quarter 1998 and
adjusted for the tax changes of 19992000
Sources: ABS; RBA

Underlying Inflation* Tradable and Non-tradable Inflation*

% %
Weighted median
5 5
Trimmed mean
4 4
3 3
2 2
CPI excl volatile items
1 1
% Tradables** %
4 4
Year-ended
2 2
0 0
Quarterly
(seasonally adjusted)
% %
Non-tradables***
4 4
2 2
0 0

0 0 -2 -2
1997 2002 2007 2012 2017
*
1997 2002 2007 2012 2017
*
** Excludes volatile items (fruit, vegetables & automotive fuel)
Excluding interest charges prior to the September quarter 1998 and Adjusted for the tax changes of 19992000

*** Excludes interest charges prior to the September quarter 1998, and
adjusted for the tax changes of 19992000
Sources: ABS; RBA
deposit & loan facilities prior to the September quarter 2011
Sources: ABS; RBA

CHART PACK | NOVEMBER 2017 4

Household Sector

Retail Sales Growth Household Income and Consumption*

% % % Real, year-ended growth %
Values* 10 10
(year-ended) Consumption
8 8
5 5

0 0
4 4 Disposable income
Volumes % Saving ratio %
(year-ended)
10 10
% Volumes %
5 5
0 0
Quarterly 0 0

-5 -5 -5 -5
2001 2005 2009 2013 2017
*
1992 1997 2002 2007 2012 2017
Percentage change over year to latest three months * Household sector includes unincorporated enterprises; disposable
Source: ABS income is after tax and interest payments; income level smoothed
with a two-quarter moving average between March quarter 2000 and
March quarter 2002; saving ratio is net of depreciation
Sources: ABS; RBA

Private Residential Building Approvals Consumer Sentiment*

Monthly Average since 1980 = 100
000 000 index index

20 20
Total
16 16 100 100

12 12

8 8 85 85
Detached
houses
4 4
Higher-density housing
0 0 70 70
1992 1997 2002 2007 2012 2017 2009 2011 2013 2015 2017
Source: ABS * Average of the ANZ-Roy Morgan and Westpac-Melbourne Institute
consumer sentiment measure of respondents perceptions of their
personal finances relative to the previous year; ANZ-Roy Morgan
index rescaled to have the same average as the Westpac-Melbourne
Institute index since 1996
Sources: ANZ-Roy Morgan; RBA; Westpac and Melbourne Institute

CHART PACK | NOVEMBER 2017 5

Household Sector

Household Finances* Household Wealth and Liabilities*

Per cent of household disposable income Per cent of annual household disposable income
% Debt Interest paid** % % %

Net wealth
175 14
600 600

150 12 Dwellings
450 450
125 10

300 300
100 8
Financial assets

150 150
75 6
Liabilities

50 4 0 0
1991 2004 2017 1991 2004 2017
*
1997 2001 2005 2009 2013 2017
Disposable income is after tax and before the deduction of interest * Disposable income is after tax and before the deduction of interest

** Excludes unincorporated enterprises

payments payments
Sources: ABS; RBA
Sources: ABS; RBA

Housing Prices
Year-ended growth, seasonally adjusted Housing Loan Approvals
% % $b $b
ABS*
15 15 25 25
APM***
Total
10 10 20 20

5 Residex* 5 15 15
Owner-occupiers*

0 0 10 10
Investors**
-5 -5 5 5
CoreLogic**

-10 -10 0 0
2009 2011 2013 2015 2017 2005 2009 2013 2017
* *
**
ABS is a quarterly stratified median price index; Residex is a quarterly Excludes refinancing

** Monthly hedonic price index; non-seasonally adjusted

repeat sales price index Includes refinancing

*** Monthly stratified median price index

Sources: ABS; RBA

Sources: ABS; APM; CoreLogic; RBA; Residex

CHART PACK | NOVEMBER 2017 6

Business Sector

Private Non-financial Corporation Profits* NAB Business Survey

Share of nominal GDP ppt Business conditions* ppt
% %
15 15
Non-mining
0 0
12 12
-15 -15

-30 -30
8 8
ppt Business confidence* ppt
Mining
15 15
4 4
0 0

-15 -15

0 0 -30 -30
2001 2005 2009 2013 2017
* Gross operating profits; inventory valuation adjusted
% Capacity utilisation %
Sources: ABS; RBA
84 84

81 81
Business Finances
% Business credit Interest paid* % 78 78
Per cent of nominal GDP Per cent of profits** Average since 1989
75 75
70 17
72 72
1992 1997 2002 2007 2012 2017
60 14 * Net balance; deviation from average since 1989
Sources: NAB; RBA

50 11

40 8

30 5
2001 2009 2017 2001 2009 2017
* Interest on intermediated debt from Australian-domiciled financial

** Profits are private non-financial gross operating surplus (adjusted

institutions

for privatisations) and gross mixed income

Sources: ABS; APRA; RBA

CHART PACK | NOVEMBER 2017 7

Business Sector

Business Investment* Capital Expenditure Mining and Non-mining*

Share of nominal GDP Nominal, log scale
% % $b $b
Mining Non-mining
128 128
18 18
64 64

16 16
32 32

16 16
14 14

8 8
12 12
4 4

10 10 2 2
1992 1997 2002 2007 2012 2017 91 / 92 04 / 05 17 / 18 91 / 92 04 / 05 17 / 18
* Adjusted for second-hand asset transfers between the private and * Dots are firms' expectations for 2017/18, adjusted for historical
other sectors differences between expected and realised spending
Source: ABS Sources: ABS; RBA

Business Investment Components* Private Non-residential Building Approvals

Share of nominal GDP Per cent of nominal GDP
% % % %

Machinery and equipment

8 8
3 3

6 6
2 2
4 4
Buildings
1 1
2 2
Engineering

0 0 0 0
1992 1997 2002 2007 2012 2017 1992 1997 2002 2007 2012 2017
* Adjusted for second-hand asset transfers between the private and Source: ABS
other sectors
Source: ABS

CHART PACK | NOVEMBER 2017 8

Credit and Money

Credit and Broad Money Growth Credit*

Year-ended Ratio to nominal GDP
% % ratio ratio
Broad money

20 20
1.4 1.4

15 15
1.1 1.1

10 10

Credit 0.8 0.8

5 5

0 0 0.5 0.5
1997 2001 2005 2009 2013 2017 1992 1997 2002 2007 2012 2017
Sources: ABS; APRA; RBA * Not adjusted for breaks
Sources: ABS; APRA; RBA

Monetary Aggregates Growth Credit Growth by Sector

Year-ended Year-ended
% % % %

M3
Housing
20 20
20 20

15 15
10 10

10 10
Business

0 0
5 5 Personal
Currency

0 0 -10 -10
1997 2001 2005 2009 2013 2017 2001 2005 2009 2013 2017
Sources: APRA; RBA Sources: ABS; APRA; RBA

CHART PACK | NOVEMBER 2017 9

Factors of Production and Labour Market

Factors of Production Wage Price Index Growth

Annual growth % %
Private sector Public sector
% Net capital stock* %
5 5
5 5 Year-ended

4 4
3 3

3 3
% Working-age population %
2 2
2.0 2.0
Quarterly
1 1
1.5 1.5

0 0
1.0 1.0 2003 2010 2017 2003 2010 2017
81 / 82 88 / 89 95 / 96 02 / 03 09 / 10 16 / 17
*
Source: ABS
Excluding livestock & orchards, dwellings and ownership transfer costs
Sources: ABS; RBA

Capital Ratios* Unit Labour Costs Growth

1979/80 = 100 Non-farm, year-ended
index index % Unit labour costs %

220 220
5 5
200 200
Capital-labour ratio 0 0
180 180

160 160 % %
Average earnings
per hour
140 140
5 5
120 120
Capital-output ratio
0 0
100 100
Labour productivity per hour
80 80 -5 -5
81 / 82 88 / 89 95 / 96 02 / 03 09 / 10 16 / 17 1997 2001 2005 2009 2013 2017
* Capital stock excludes livestock & orchards, dwellings and ownership Sources: ABS; RBA
transfer costs
Sources: ABS; RBA

CHART PACK | NOVEMBER 2017 10

Factors of Production and Labour Market

Employment and Participation Rates Employment and Hours Worked*

% % 2008 average = 100
Participation rate index index

Employment
64 64 110 110

105 105
61 61
Total hours worked
100 100
58 58
Average hours worked
Employment to working-age population 95 95

55 55
1997 2001 2005 2009 2013 2017 90 90
2007 2009 2011 2013 2015 2017
*
Source: ABS
Smoothed lines are 13-period Henderson trends
Sources: ABS; RBA

Labour Market Job Vacancies and Advertisements

% % Per cent of labour force
% %
Advertisements
Underemployment rate* (ANZ survey)
8 8
2.0 2.0

6 6 Vacancies*
(ABS survey)
1.5 1.5

Unemployment rate
4 4
1.0 1.0

2 2
2005 2008 2011 2014 2017
*
0.5 0.5
2001 2005 2009 2013 2017
*
Full-time workers on reduced hours for economic reasons and
part-time workers who would like, and are available, to work more hours
This survey was suspended between May 2008 and November 2009
Source: ABS
Sources: ABS; ANZ

CHART PACK | NOVEMBER 2017 11

Regions and Industry

State Share of Output* State Final Demand

% % Year-ended growth
New South Wales % %
35 35
10 10
30 30 Victoria
5 5
Victoria
25 25 0 0
New South Wales
20 20 -5 -5
Queensland
15 15 % %
Western Australia
Western Australia
10 10 10 10
South Australia
5 5 0 0
Tasmania Queensland
0 0 -10 -10
90 / 91 95 / 96 00 / 01 05 / 06 10 / 11 15 / 16
* Nominal
Source: ABS % %
South Australia
10 10

5 5

State Unemployment Rates 0 0

Trend -5 -5
% % Tasmania*
Tasmania -10 -10
1992 1997 2002 2007 2012 2017
*
8 8
South Australia Adjusted for the purchase and sale of ferries in 2002
7 7 Source: ABS
New South Wales
6 6

5 5
Victoria
4 4

Queensland
3 3
Western Australia
2 2
2007 2012 2017 2007 2012 2017
Source: ABS

CHART PACK | NOVEMBER 2017 12

Regions and Industry

Industry Share of Output* Industry Share of Business Investment*

% % % %
Other business services**

Manufacturing 50 50
14 14 Manufacturing Mining
40 40
Retail and wholesale trade Financial and Retail and
insurance services wholesale trade
10 10 30 30
Financial and insurance Other business
services services** Construction
Construction 20 20
6 6
Agriculture
Mining 10 10
Agriculture
2 2 0 0
91 / 92 96 / 97 01 / 02 06 / 07 11 / 12 16 / 17
*
91 / 92 96 / 97 01 / 02 06 / 07 11 / 12 16 / 17
*
** **
Nominal gross value added Nominal
Includes: information media and telecommunications; rental, hiring Includes: information media and telecommunications; rental, hiring
and real estate services; professional, scientific and technical services; and real estate services; professional, scientific and technical services;
administrative and support services administrative and support services
Source: ABS Source: ABS

Employment Growth by Industry

Cumulative change since February 2012
000 000

600 600

450 450
Household
services Business
300 300
Retail and Public services
wholesale trade administration
150 150
Other*
0 0
Construction Mining
Manufacturing
-150 -150
2014 2017 2014 2017
* Includes agriculture, forestry & fishing; transport, postal & warehousing;
and electricity, gas, water & waste services
Source: ABS

CHART PACK | NOVEMBER 2017 13

Government

Australian Government Budget Balance* State Budget Balances*

Per cent of nominal GDP Per cent of nominal GDP
% % % %

2 2
1.0 1.0
1 1
0.5 0.5
0 0

-1 -1 0.0 0.0

-2 -2
-0.5 -0.5
-3 -3
-1.0 -1.0
-4 -4

-5 -5 -1.5 -1.5
85 / 86 92 / 93 99 / 00 06 / 07 13 / 14 20 / 21 85 / 86 91 / 92 97 / 98 03 / 04 09 / 10 15 / 16
* Underlying cash balance; 2017/18 Budget * Underlying cash balance
Source: Australian Treasury Source: ABS

Public Construction Work Done Non-financial Public Sector Net Debt

Per cent of nominal GDP Per cent of nominal GDP
% % % %
Total Non-financial public sector

30 30
3 3

20 20
2 2 Australian Government

10 10
Engineering

1 1
0 0
Building State and local general governments
0 0 -10 -10
1992 1997 2002 2007 2012 2017 90 / 91 95 / 96 00 / 01 05 / 06 10 / 11 15 / 16
Source: ABS Source: Australian Treasury

CHART PACK | NOVEMBER 2017 14

Commodity Prices

RBA Index of Commodity Prices Base Metals, Rural and Oil Prices
SDR, 2015/16 average = 100, log scale Weekly
index index index US$/b
190 190 Brent oil
160 160 150 125
Rural*
130 130 125 100

100 100
100 75

70 70 75 50

50 25
Base metals*

40 40 25 0
1987 1992 1997 2002 2007 2012 2017 2009 2013 2017 2009 2013 2017
Source: RBA * RBA Index of Commodity Prices sub-indices; SDR terms; 2007
average = 100
Sources: Bloomberg; RBA

Bulk Commodity Prices Terms of Trade*

Free on board basis 2014/15 average = 100, log scale
US$/t Iron ore Thermal coal Coking coal US$/t index index
(LHS) (LHS) (RHS)
120 120

165 350 100 100

Spot price*
Average Australian
export price
80 80
120 250

60 60
75 150

30 50 40 40
2013 2017 2013 2017 2013 2017 1957 1972 1987 2002 2017
* Iron ore fines; Newcastle thermal coal and premium hard coking coal * Annual data are used prior to 1960
Sources: ABS; Bloomberg; IHS; RBA Sources: ABS; RBA

CHART PACK | NOVEMBER 2017 15

Balance of Payments and External Position

Export Volumes Bulk Commodity Exports

Quarterly, 2014/15 prices, log scale Quarterly
$b $b Mt Mt
Iron ore Coal

Services
175 100
Resources
40 12
Rural

125 80

20 6
75 60
Manufacturing

10 3 25 40
1999 2008 2017 1999 2008 2017 2007 2012 2017 2007 2012 2017
Sources: ABS; RBA Sources: ABS; RBA

Import Volumes Exports by Destination

Quarterly, 2014/15 prices, log scale Annual, share of total values
$b $b % %

30 30
32 32
China
Intermediate 25 25
Consumption
16 16
20 20
Japan

8 8 15 15
Services EU - 27
Capital 10 10
South Korea
4 4
5 5
India US
2 2 0 0
2001 2009 2017 2001 2009 2017 2000 2004 2008 2012 2016
Source: ABS Source: ABS

CHART PACK | NOVEMBER 2017 16

Balance of Payments and External Position

Current Account Balance Net Capital Inflow*

Per cent of nominal GDP Per cent of nominal GDP
% % % %
Net income balance Debt
Trade balance 8 8

0 0
6 6
Total
4 4
-3 -3
2 2

0 0
-6 -6
Equity
-2 -2
Current account balance
-9 -9 -4 -4
1992 1997 2002 2007 2012 2017 2001 2005 2009 2013 2017
Source: ABS * 2017 values are year to June quarter
Source: ABS

Net Foreign Liabilities External Position

By type, per cent of nominal GDP Composition after hedging, quarterly*
% % $b $b
Gross foreign liabilities Gross foreign assets
Total 3 000 3 000
60 60 Foreign currency
Australian dollar
2 500 2 500
45 45

Long-term debt* 2 000 2 000

30 30
1 500 1 500
Short-term debt*
15 15
1 000 1 000

0 0 500 500
Equity

-15 -15 0 0
2001 2005 2009 2013 2017 2007 2012 2007 2012 2017
* Short-term includes debt with residual maturity of one year or less; * Hedge ratios inferred from ABS Foreign Currency Exposure surveys
long-term includes all other debt Sources: ABS; RBA
Source: ABS

CHART PACK | NOVEMBER 2017 17

Interest Rates

Australian Cash Rate Policy Interest Rates

% % % %
US
7 7 5 5

6 6 4 4

5 5 3 3
Euro area*
4 4 2 2

3 3 1 1

2 2 0 0
Japan
1 1 -1 -1
2001 2005 2009 2013 2017 2005 2008 2011 2014 2017
Source: RBA * Main refinancing rate until the introduction of 3-year LTROs in
December 2011; deposit facility rate thereafter
Source: Central banks

Australian Cash Rate and 90-day Bill Yield Policy Interest Rates Selected
% % Advanced Economies
% %
8 8
NZ
8 8
6 6
90-day bill yield
Cash rate 6 6
4 4 UK
4 4
2 2
2 2
Real cash rate* Sweden
0 0 Canada
0 0
-2 -2 Switzerland*
1997 2002 2007 2012 2017
*
-2 -2
Calculated using average of year-ended weighted median inflation 2005 2008 2011 2014 2017
*
and year-ended mean inflation
Sources: ABS; ASX; RBA Policy rate is the midpoint of the 3-month LIBOR target band
Source: Central banks

CHART PACK | NOVEMBER 2017 18

Interest Rates

Interest Rates China 10-year Australian Government Bond Yield

% % % %
1-year
benchmark lending 7 7

6 6
6 6
1-year
benchmark deposit 5 5
4 4
4 4

3 3
2 2
7-day repo 2 2
(month average)

0 0 1 1
2005 2008 2011 2014 2017 2001 2005 2009 2013 2017
Sources: CEIC Data; RBA Source: RBA

Policy Interest Rates Emerging Markets 10-year Government Bond Yields

% % % %
Brazil
Indonesia* Russia* 6 6
12 16 US
5 5

9 12 4 4
India
3 3
Germany
6 8
2 2
South
Malaysia Africa 1 1
3 4 Japan
Mexico 0 0
Thailand South Korea
0 0 -1 -1
2007 2012 2017 2007 2012 2017 2001 2005 2009 2013 2017
* Breaks in series indicate changes in the official policy rates for Russia Source: Thomson Reuters
(September 2013) and Indonesia (August 2016)
Source: Central banks

CHART PACK | NOVEMBER 2017 19

Interest Rates

Spread between Australian 10-year Bond Australian Corporate Bond Yields*

% %
Yield and the Cash Rate
ppt ppt A rated
BBB rated
8 8
4 4

6 6
2 2

AA rated Swap
0 0 4 4

-2 -2
2 2

-4 -4
0 0
2001 2005 2009 2013 2017
-6 -6 * Swap rates are for 3-year maturity; corporate bond yields are a
1992 1997 2002 2007 2012 2017
weighted average of senior bonds with remaining maturities of 1 to 5
Source: RBA years, including financial and non-financial corporations
Sources: Bloomberg; RBA; UBS AG, Australia Branch

Differential between Australian and Australian Corporate Bond Spreads*

US 10-year Government Bond Yields Spread over government yields
bps bps bps bps

500 500 500 500

400 400
400 400

300 300 BBB rated

300 300
A rated
200 200
200 200
100 100
100 100
0 0 Swap
AA rated

-100 -100 0 0
2001 2005 2009 2013 2017
*
1992 1997 2002 2007 2012 2017
Swap spreads are for 3-year maturity; corporate bond spreads are a
Sources: Bloomberg; RBA
weighted average of senior bonds with remaining maturities of 1 to 5
years, including financial and non-financial corporations
Sources: Bloomberg; RBA; UBS AG, Australia Branch

CHART PACK | NOVEMBER 2017 20

Interest Rates

US Corporate Bond Yields Emerging Market Bond Yields

% % US dollar-denominated, blended yield
% %
BBB corporates*
4 4 Europe
20 20

3 3 Latin America
AA corporates* 15 15

2 2
10 10

1 1 Asia
5 5
5-year swap

0 0
2011 2012 2013 2014 2015 2016 2017
*
0 0
Includes financials and non-financials 1997 2001 2005 2009 2013 2017
Source: Bloomberg Sources: Bloomberg; RBA; Thomson Reuters

US Corporate Bond Spreads Emerging Market Bond Spreads

To US government bonds To US government bonds, duration-matched
bps bps bps bps
Europe
1 500 1 500
300 300
BBB corporates* Latin America
1 200 1 200
200 200

900 900
100 100
AA corporates* 600 600

0 0
300 300
5-year swap
Asia
-100 -100 0 0
2011 2012 2013 2014 2015 2016 2017 1997 2001 2005 2009 2013 2017
* Includes financials and non-financials Sources: Bloomberg; RBA; Thomson Reuters
Source: Bloomberg

CHART PACK | NOVEMBER 2017 21

Interest Rates

Australian Housing Lending Rates Australian Fixed Interest Rates

Average interest rate on variable-rate loans 3-year maturity
% % % %
Banks indicator rate on new owner-occupier loans
10 10 12 12
Actual rate on
Small business
outstanding loans 10 10
8 8
8 8
6 6
6 6
Cash rate
4 4 Swap rate
4 4

2 2 Housing*
2 2

0 0 0 0
1997 2002 2007 2012 2017 1997 2002 2007 2012 2017
Sources: ABS; APRA; Perpetual; RBA * Available to owner-occupiers
Sources: Banks websites; Bloomberg; Canstar Cannex; RBA

Advertised Small Business Interest Rates* Australian Business Lending Rates*

% % Average interest rate on outstanding lending
% Small business %
Overdraft other security
11 11 10 10

8 8
10 10
6 6
9 9
% Large business %
8 8 8 8

6 6
7 7
Term loan residential security 4 4
6 6
1997 2002 2007 2012 2017 2 2
* 1997 2001 2005 2009 2013 2017
*
Indicator rates
Sources: APRA; Canstar Cannex; RBA RBA estimates
Sources: APRA; RBA

CHART PACK | NOVEMBER 2017 22

Share Markets

Australian and World Share Price Indices Advanced Economies Share Price Indices
Log scale, end December 1994 = 100 Log scale, end December 1994 = 100
index index index index
500 500 500 500
400 400
400 400 Euro area US
S&P 500 300 300
300 300
200 200

200 200
UK
100 100
MSCI World
ASX 200 Japan
100 100

80 80 40 40
1997 2001 2005 2009 2013 2017 1997 2001 2005 2009 2013 2017
Sources: Bloomberg; MSCI; RBA Sources: Bloomberg; RBA

Australian Share Price Indices* Emerging Markets Share Price Indices

Log scale, end December 1994 = 100 Log scale, end December 1994 = 100
index index index index
600 600 1 500 1 500
Resources
500 500 Emerging Europe
1 000 1 000
400 400
Latin America
300 300 500 500
Financials
China
200 200
200 200
All other sectors
World
100 100 100 100

Emerging Asia

60 60 40 40
1997 2001 2005 2009 2013 2017 1997 2001 2005 2009 2013 2017
* ASX 200 companies Sources: Bloomberg; MSCI; RBA
Sources: Bloomberg; RBA

CHART PACK | NOVEMBER 2017 23

Share Markets

Forward PE Ratios Forecast Earnings per Share

ratio ratio MSCI Australia
index index
2009/2010
MSCI World 2008/2009
excluding Australia 450 450
20 20
2016/2017
2007/2008 2011/2012 2014/2015
400 400
2017/2018

10 10 350 350
2006/2007
2013/2014
ASX 200
2010/2011 2012/2013
300 300
2005/2006 2015/2016
0 0
2001 2005 2009 2013 2017 250 250
Sources: Bloomberg; MSCI; Thomson Reuters 2005 2008 2011 2014 2017
Source: Thomson Reuters

Dividend Yields Australian Net Equity Raisings*

% % $b Non-financial corporations $b
Financials**
30 30

6 6 25 25

20 20
ASX 200
4 4 15 15

10 10

2 2 5 5
MSCI World
excluding Australia 0 0

0 0 -5 -5
2001 2005 2009 2013 2017
*
1997 2001 2005 2009 2013 2017

**
Sources: Bloomberg; MSCI; Thomson Reuters All listed companies
Includes banks and non-bank financials
Sources: ASX; RBA

CHART PACK | NOVEMBER 2017 24

Bond Issuance

Bonds on Issue in Australia Total Non-government Bonds on Issue

$b $b All currency denominations
$b $b
500 500

Non-government**
400 400 450 450

Financials
300 300
300 300
Non-financial
200 200 corporations
State
governments
Australian government* 150 150
100 100
Asset-backed
0 0 Non-residents* securities
1992 1997 2002 2007 2012 2017
*
0 0

**
1992 1997 2002 2007 2012 2017
*
Excludes bonds purchased by the Australian Government
Excludes ADIs self-securitisations, includes government-guaranteed Australian dollar-denominated bonds only
bonds Sources: ABS; RBA
Sources: ABS; AOFM; RBA; State Treasury Corporations

Non-government Bond Issuance Non-government Bonds on Issue in Australia

Gross issuance $b $b
$b Australia $b
Domestic issuers* Financials
Non-resident issuers**
40 40 150 150

20 20
Asset-backed securities*
100 100
$b Offshore $b

60 60
50 50
40 40 Non-financial
corporations
20 20 Non-residents
0 0
1992 1997 2002 2007 2012 2017
*
0 0
2001 2005 2009 2013 2017
*
Excludes ADIs self-securitisations

**
Excludes ADIs self-securitisations Sources: ABS; RBA
Offshore non-resident issuance includes Australian dollar-denominated
bonds only
Source: RBA

CHART PACK | NOVEMBER 2017 25

Bond Issuance

US and Euro Area Corporate Bond Issuance* Emerging Market Corporate Bond Issuance*
Gross issuance Gross issuance
US$b US US$b US$b China US$b
Financials
400 400
Non-financials
200 200
300 300 Foreign currency-denominated
200 200 Local currency-denominated
100 100
100 100

US$b Euro area US$b US$b Other US$b

800 800 150 150
600 600
100 100
400 400
200 50 50
200
0 0 0 0
2005 2008 2011 2014 2017 2005 2008 2011 2014 2017
* December quarter-to-date * December quarter-to-date
Sources: Dealogic; RBA Sources: Dealogic; RBA

CHART PACK | NOVEMBER 2017 26

Exchange Rates

Australian Dollar Trade-weighted Index* Official Reserve Assets

index index A$b A$b

80 80
80 80 Gross
Real 60 60

70 70
40 40

60 60 20 20
Net*
Nominal A$b A$b
50 50 RBA net purchases
4 4
of foreign exchange**
2 2
40 40 0 0
1987 1993 1999 2005 2011 2017
*
-2 -2
May 1970 = 100 for nominal; real indexed to equate post-float
averages; latest observations for real TWI are estimates
A$b RBA foreign exchange market intervention transactions*** A$b
Sources: ABS; RBA; Thomson Reuters; WM/Reuters
4 4
2 2
0 0
-2 -2
Australian Dollar -4 -4
yen US$, 1997 2001 2005 2009 2013 2017
euro *
**
Excludes foreign exchange swaps
Includes market, government and other outright transactions,

*** Data up to 30 June 2017; a positive value indicates a purchase of

excludes swap deliveries
200 1.60
foreign exchange, while a negative value indicates a sale of foreign
Yen per A$ exchange
(LHS) Source: RBA

150 1.20
US$ per A$
(RHS)
Euro per A$*
(RHS)
100 0.80

50 0.40
1987 1993 1999 2005 2011 2017
* ECU per A$ until 31 December 1998
Source: Bloomberg

CHART PACK | NOVEMBER 2017 27

Exchange Rates

US Dollar Selected Asian Currencies against the US Dollar

yen US$ 31 January 2000 = 100
index index
250 0.90 Singapore
140 140
210 1.30 South Korea
US$ per euro*
(RHS, inverted scale) 120 120
170 1.70 Thailand
Malaysia
100 100
130 2.10 India
Yen per US$ 80 80
(LHS)
90 2.50
60 60
Indonesia
50 2.90
1982 1989 1996 2003 2010 2017
*
40 40
US$ per ECU until 31 December 1998 2001 2005 2009 2013 2017
Sources: Bloomberg; Eurostat
Source: Bloomberg

G3 Nominal Trade-weighted Indices Chinese Renminbi

19992017 average = 100 index yuan
index index
120 6.0
Japanese yen Nominal effective exchange rate
(LHS, 2010 average = 100)
120 120 110 6.5
US dollar
100 7.0
110 110
90 7.5

100 100
80 8.0
Yuan per US$
(RHS, inverted scale)
90 90 70 8.5

Euro 60 9.0
2001 2005 2009 2013 2017
80 80
2001 2005 2009 2013 2017 Sources: BIS; Bloomberg; RBA
Sources: BIS; Bloomberg; Board of Governors of the Federal Reserve
System

CHART PACK | NOVEMBER 2017 28

Banking Indicators

Australian Bank Profits Australian Bank Profitability*

Net profit after tax Bad and doubtful debts charge Return on shareholders equity after tax and minority interests
$b Major banks Major banks $b % %

12 12 Majors
20 20

6 6

10 10

$b Other Australian-owned Other Australian-owned $b

Other Australian-owned banks
banks banks
0 0
2.2 2.2

1.1 1.1 -10 -10

1991 1996 2001 2006 2011 2016
* Fiscal years from 2003 onwards; prior data are as reported in banks
financial statements
$b Foreign-owned banks Foreign-owned banks $b Sources: APRA; Banks annual reports; RBA

1.5 1.5
Major Banks Net Interest Margin*
Domestic, half-yearly
% %
0.0 0.0

-1.5 -1.5 3.0 3.0

2006 2011 2016 2006 2011 2016
Sources: APRA; RBA

2.5 2.5

2.0 2.0

1.5 1.5
2001 2005 2009 2013 2017
* From 2006 data are on an IFRS basis; prior years are on AGAAP
basis; excludes St George Bank and Bankwest prior to the first half
of 2009
Sources: Banks Financial Reports; RBA

CHART PACK | NOVEMBER 2017 29

Banking Indicators

Banks Non-performing Assets Banks Non-performing Assets

Consolidated global operations, share of on-balance sheet assets Domestic books
% % % %
Share of all loans Share of loans by type*

Total*
6 6
4 4
Business**
(35%)
3 3

4 4
2 2
Total
Personal
2 2 (4%)
1 1
Impaired
Housing
(61%)
0 0 0 0
1992 1997 2002 2007 2012 2017 2007 2012 2017 2007 2012 2017
* Includes assets 90+ days past due that are well secured * Each categorys share of total domestic lending at June 2017 is shown

** Includes lending to financial businesses, bills, debt securities and

Source: APRA in parentheses; shares may not add up to 100 due to rounding

other non-household loans

Sources: APRA; RBA

Capital Ratios* Funding Composition of Banks in Australia*

Consolidated global operations of locally incorporated ADIs Share of total funding
% % % %
Banks Other ADIs

Credit unions 60 60

15 15 Domestic deposits
50 50
Total
40 40
10 10
Tier 1 Building societies Short-term debt**
30 30

Common Equity Tier 1 20 20

5 5 Long-term debt

Tier 2 10 10
Securitisation Equity
0 0 0 0
1993 2005 2017 1993 2005 2017 2005 2008 2011 2014 2017
* Per cent of risk-weighted assets; break in March 2008 due to the * Adjusted for movements in foreign exchange rates; tenor of debt is

** Includes deposits and intragroup funding from non-residents

introduction of Basel II for most ADIs; break in March 2013 due to the estimated on a residual maturity basis
introduction of Basel III for all ADIs
Source: APRA Sources: APRA; RBA; Standard & Poors

CHART PACK | NOVEMBER 2017 30