Markets

Australian Q1 Capex survey due today (0130GMT) - what to watch for

The Australia Bureau of Statistics publish the result of the 'Private New Capital Expenditure and Expected Expenditure' survey for the January - March quarter today

In brief:

  • Provides preliminary estimates of expected capes from a sample survey of private businesses
  • It contains estimates of actual and expected new capital expenditure by type of asset (new buildings and other structures/equipment, plant and machinery) and by selected industries.

The major points of focus for the FX market are:

  • The 'headline' total, expected is -3.5%, prior +0.8%
  • Estimate 6 for 2015/16 (the previous estimate, which was 'Estimate 5 for 15/16, published in the Q4 2015 data was $124bn, -17.8% y/y)
  • Estimate 2 for 2016/17 (the previous estimate for this was 'Estimate 1' for 16/17, at $82.6bn, -19.5% y/y)

The big impact weighing on investment intentions is the ongoing wind-down in mining infrastructure investment. This is not an unknown, its been going on for a few years now as investment tumbled off the 'capex cliff''. Yu can see the 'cliff' in this pic I posted in reference to the previous capex release:

What is an unknown is how other investment is faring, with service industry investment being looked at to cushion the fall elsewhere. A problem with the capex survey is it doesn't capture all of service industry investment, it excludes, for example, sectors such as education and health, along with assets such as investment in computer software, which are likely to have seen an expansion in investment.

Regardless, missing sectors or not, the numbers will be what they'll be and the market will respond. I'll leave the arguing over what is missing and what not to others.

As I posted earlier, fro the 'headline, expected is -3.5%

And, as I haven't posted ... for

  • Estimate 6, the expectations I've seen are for around the previous figure of $124bn (down 17.4% y/y)
  • expected for Estimate 2 for 2016/17 at $85 to $90bn

For the AUD, misses on these expectations will be interpreted as a negative. I've already noted the presence of a growing number of stop loss sell orders under 0.7140 and I'd expect these to be very tempting should the data miss.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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