WEEKLY ECONOMIC BRIEF – 12 October 2012 Chief ... - LGsuper

Japan
• Bank of Japan left monetary policy unchanged at their meeting last week.
6
5
SouthKorea-Policy rate (%)
South Korea
• Bank of Korea cut the base rate by 25bps to 2.75%.
– The move was widely anticipated by the market, although the decision was
not unanimous among committee members.
– The BOK cut their growth forecasts from 3% to 2.4% for 2012 and from
2.8% to 3.2% for 2013 due to weaker external and domestic demand.
– The BOK also announced their inflation target for 2013-2015 at 2.5%-3.5%,
narrower than the current 2-4% range.
Australia
• Unemployment rate rises sharply in September
– The unemployment rate rose sharply from 5.1% to 5.4% in September.
– Although employment rose a stronger-than-expected 14,500 over the
month, the unemployment rate rose sharply due to a jump in the size of
the labour force, with the participation rate rising from 65% to 65.2%.
• Both business and consumer confidence remains subdued
– Business conditions fell 3.5pts to -3.1 in September. Although, business
confidence improved 2.6pts to 0 in September, it remains at a low level.
– Consumer sentiment rose 1% in October to 99.2, remaining under 100
for the eighth consecutive month. It appears the surprise move by the
RBA to cut the cash rate to 3.25% on October 2 has had little impact on
consumer confidence.
• With confidence remaining weak and the unemployment rate beginning to rise,
we continue to expect the RBA will cut rates by a further 25 basis points to
3.00% in November.
4
3
2
1
0
2006 2007 2008 2009 2010 2011 2012 2013
Australia -Unemployment rate (sa, %)
6.0
5.5
5.0
4.5
4.0
3.5
2004 2006 2008 2010 2012
Australia -NAB Business conditions and confidence (sa, net balance)
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
2007 2008 2009 2010 2011 2012 2013
Australia -Westpac consumer confidence (index)
125
120
115
110
105
100
95
90
85
80
75
Confidence
Conditions
2002 2004 2006 2008 2010 2012
Sources: Thomson Reuters, ABS
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