The question of how fast spending on mining investment is falling and whether it will be replaced by investment in other industries has become a key issue for the Australian economy. This means today's capital expenditure numbers will be closely watched by markets. Between 2007 and 2013, mining investment contributed 40% of Australia's average 2.5% GDP growth. So the forecast large drop in investment in new projects is going to leave a big hole in coming years. This has been a key factor in the RBA's rate cutting policy. Weaker than expected numbers today, might see markets increasing the probability for further rate cuts. This could be bearish for Aussie as it falls towards key support around .8848 Of course a strong number could have the opposite effect. Current market expectations are for June quarter expenditure to be 0% compared to -4.7% in the March quarter. Today's release also includes a survey of business intentions for future investment. This will be a key focus for markets. In the last survey, planned investment levels for F2014 were running 10% below the survey taken for F13 at the same time of the year.


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.