It's a big day for AUD traders with Q4 capex numbers due at 11:30 AEST. The most important part of this though is the business intensions estimate for 2014-15, which will be the first estimate for future capex intensions. While these 'intensions' prints will be revised five times, we need to look at today's print against the first estimate of the 2013-14 estimate, which was A$152 billion and given the RBA has detailed before they expected a 10% drop, this is what we can use as a guide for today's currency playbook. Working on this premise a number of a$137 billion or below (i.e. a 10% fall from the initial 2013 to 2014 print) should cause AUD weakness, a number a$145 billion or above should cause an AUD rally, given this is half the fall that is priced in.

Chris Weston

Weak, really weak Alex. If you work off the 1st estimate of 2013/14, the intensions of $125b was well shy of the $137b many were looking for. Non mining intensions grew 1.5%, which is hardly enough to promote the 3.75% growth needed from the non-mining space to create total economic growth of just over 2% this year. This print could be telling and given I think inflation peaks mid-year and falls, the RBA will be concerned by this. A further decline in TOT and the market will start pricing in rate cuts.

Canaccord Colts

what did you make of the shocking result Chris, and in particular the business intensions estimate?

Canaccord Colts

Pretty grim stuff mate - let me know when you'e up for that beer. I think I need it!