The conditions in the global economy showed slower than expected growth in most of Australia’s major trading partner countries in the September quarter 2019. According to the Organisation for Economic Cooperation and Development (OECD) (footnote 2) preliminary growth rates compared to last quarter in seasonally adjusted terms showed quarterly growth for China (1.5%), Indonesia (1.2%), the USA (0.5%), South Korea (0.4%), Spain (0.4%), Belgium (0.4%), Netherlands (0.4%), Euro 28 (0.3%), France (0.3%), the UK (0.3%), Germany (0.1%) and Japan (0.1%).
- Foreign asset transactions recorded an outflow of -$7.8b in the September quarter 2019 compared to an outflow of -$9.0b in the June quarter 2019
- Foreign liability transactions were $0.1b in the September quarter 2019 compared to $5.7b in the June quarter 2019.
The Australian share market, as measured by the MSCI global index (footnote 3), increased 1.2% in the September quarter 2019, compared to an increase of 7.7% in the June quarter 2019. Increases were recorded in New Zealand (3.0%), Japan (2.6%), France (2.5%), Switzerland (2.5%), Canada (1.2%), the USA (1.1%) and Germany (0.2%). Decreases were recorded in Hong Kong (12.4%), Singapore (5.2%), China (5.0%) and the UK (0.6%). A market price change of -$8.2b was recorded for foreign equity assets and $2.1b for foreign equity liabilities in the September quarter 2019.
According to Thomson Reuters (footnote 4), the composite corporate benchmark yields decreased in the USA from 3.24% to 3.01%, the UK from 2.15% to 1.83%, Germany from 0.64% to 0.50%, and Japan from 0.31% to 0.30% over the September quarter 2019. The long-term 10 year government bond yields decreased in the USA from 2.00% to 1.68%, the UK from 0.83% to 0.49%, Japan from -0.16% to -0.22% and Germany from -0.32% to -0.57% over the September quarter 2019. A market price change of -$0.4b was recorded for portfolio investment debt securities assets and $9.6b in portfolio investment debt securities liabilities in the September quarter 2019.
The Australian dollar depreciated against almost all major and minor trading currencies in the September quarter 2019. The Australian dollar depreciated 3.76% against the US Dollar, 3.71% against the Japanese yen, 3.47% against the Indonesian rupiah, 3.37% against the Hong Kong dollar, 2.75% against the Canadian dollar, 2.24% against the Swiss franc, 1.76% against the Singapore dollar, 1.36% against the Indian rupee, 0.85% against the UK pound sterling, 0.22% against the South Korean won and 0.20% against the Chinese renminbi. The Australian dollar appreciated 3.34% against the South African rand and 3.05% against the New Zealand dollar, while it was unchanged against the European euro. The Trade Weighted Index (TWI)(footnote 5) fell 1.50% to 59.200 in the September quarter 2019. These movements were reflected in exchange rate changes for foreign assets $34.7b and foreign liabilities of $29.8b in the September quarter 2019.