Data: Australia - Q4 Capex (Private Capital Expenditure) Headline -2.1% q/q (vs. expected -0.5%)
via Reuters, some quick responses:
CBA:
- "It was pretty modest increase in equipment spending, that's relevant to GDP numbers next week.
- The good news is there appears to be a bit of non-mining activity going on.
- The good news is the downturn in mining capex is almost over.
- What we need to see is bit of a pick up in the non-mining side and there are a few tentative indications that things are slowly turning around but it's not a dramatic lift.
- Capex is going to remain weak until the downturn in the mining side is finally over and done with, we are not quite there yet.
- Our GDP forecasts are sitting about 0.75 percent for the December quarter, with extra data to come we'll move that number around quite a bit between now and next Wednesday."
JP MORGAN
- "The new information here is the capex on plant and equipment which feeds into the GDP next week and that's not that bad. It is slightly up, in fact.
- We are still expecting 0.7 percent on Q4 GDP next week.
- The firms first estimate of next fiscal year spending were on the softer side though. Even though the mining capex drag is fading away, the recovery in non-mining is really tepid at this point.
- We are seeing global business sentiment surveys rally quite a bit but it doesn't appear like Australian firms are following suit with their capex plans at the moment.
- Today's data puts no pressure on the central bank to lower rates for now."