It’s a dark report
A slight positive was that Q3’s number was revised higher to 0.6% from 0.2%, but the rest of the report was pretty gloomy. Private capital expenditure fell 2.2% last quarter, missing an expected 1.6% drop, and investment intentions for the year also underwhelmed expectations.
The details of the report are even more disappointing. The first estimate of total capital expenditure for 2015-16 is $109.8bn, which represents a 12.4% drop in investment intentions from the first estimate for 2014-15. The outlook for non-resources sectors of the economy is even worse than expected, suggesting that firms aren’t very optimistic about the outlook for the economy as they aren’t willing to pledge more cash. Also, the seasonally adjusted mining estimate fell 5.7% last quarter and estimate 5 for 2014-15 is 8.6% lower than the same estimate for 2013-14.
The aussie
As we outlined earlier, the AUD was assaulted by bears following today’s Australian CAPEX data. AUDUSD is around 50 pips lower at the time of writing and may have lost its opportunity to break through 0.7900 in the near-term. With the focus now squarely on next week’s policy meeting at the RBA, the capability of the AUD to regain any ground may depend on the ability of the market to brush aside today’s data. Given how weak the data was, we think AUD may continue to come under threat in the lead-up to the RBA’s policy decision on Tuesday afternoon.
Source: FOREX.com
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