SunshineCoastRegionalReport2ndQtr2004

                                                                                                                                                       The Australian share market continued its
PRICES, INFLATION &                                                                                                                                    steady growth in the June Quarter 2004,
                                                                                                                                                       although the US market trended slightly
FINANCIAL MARKETS                                                                                                                                      lower.
FINANCIAL MARKETS

INTEREST RATES
 %
7.5
                                                            Interest Rates
                                                         90 day bills        10 year bonds                                               The Reserve Bank of Australia (RBA) left the official cash rate
7.0                                                                                                                                      unchanged at 5.25% in June and July, although further interest rate
                                                                                                                                         increases may be expected in the short term in light of a stronger
6.5
                                                                                                                                         international climate, rising business and consumer confidence and
6.0                                                                                                                                      buoyant business conditions.
5.5


5.0                                                                                                                                      The 90-day bill rate was trading at around 5.50% in June 2004 (0.8
4.5
                                                                                                                                         percentage points higher than a year earlier). Meanwhile, the return on 10-
                                                                                                                                         year bonds was at 5.87% in June 2004 (up 0.9 percentage points from
4.0                                                                                                                                      June 2003).
  Jul-01                         Nov-01    Mar-02     Jul-02    Nov-02     Mar-03     Jul-03   Nov-03     Mar-04   Jul-04




SHARE MARKET
                                           Australian Share Market Indices                                                               As a result of rising interest rates and growing investor confidence the All
                       6,000                                                                                       12,000
                                                    All Ordinaries (LHS)       Dow Jones (RHS)                                           Ordinaries index continued to trend upwards, to be at 3,533 in June. An
                       5,500                                                                                       11,000                improvement in international conditions has also impacted positively on
                       5,000
                                                                                                                   10,000
                                                                                                                                         the domestic share market.
 December 1979 = 500




                       4,500
                                                                                                                   9,000                 The Dow Jones Industrial Average has continued to trend higher, to be at
                       4,000
                                                                                                                   8,000
                                                                                                                                         10,435 in June 2004, although has not performed as well since January
                       3,500
                                                                                                                                         2004, possibly due to increasing oil prices over that period.
                                                                                                                   7,000
                       3,000

                       2,500                                                                                       6,000


                       2,000                                                                          5,000
                           Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04




EXCHANGE RATES
                                      Exchange Rate : US Dollar and TWI                                                                  The Australian dollar depreciated slightly in the three months to June
                       0.80                                                                                        70
                                                         US Dollar (LHS)         TWI (RHS)
                                                                                                                                         2004, after the strong appreciation of the dollar since 2001. There has
                       0.75
                                                                                                                   65
                                                                                                                                         only been a small decrease in the strength of the Australian dollar in
                       0.70
                                                                                                                                         annual terms compared to the Trade Weighted Index, which represents a
                                                                                                                                         weighted average of the exchange rates of Australia’s most valuable
                                                                                                                   60
                                                                                                                                         trading partners.
  1A$ = US$




                       0.65
                                                                                                                        1A$=TWI




                       0.60
                                                                                                                   55

                       0.55

                                                                                                                   50
                       0.50


                       0.45                                                                                        45
                          Jul-01          Jan-02       Jul-02        Jan-03          Jul-03      Jan-04       Jul-04



                                    Exchange Rate : Japanese Yen & Euro
                       85                                                                                          0.85
                                                    Japanese Yen (LHS)          Euro (RHS)

                       80                                                                                          0.80


                       75                                                                                          0.75
 1A$ = Yen




                                                                                                                              1A$ = Uk




                       70                                                                                          0.70


                       65                                                                                          0.65


                       60                                                                                          0.60


                       55                                                                                          0.55


                       50                                                                                          0.50
                        Jul-01        Jan-02          Jul-02        Jan-03          Jul-03     Jan-04         Jul-04

Source: RBA, Bloomberg, ComSec


©0, Sunshine Coast Regional Economy, Second Quarter 2004                                                                                                                                                     - 47 -