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Flash: Australian Capex pullback in Q1 and outlook remains clouded - Nomura

FXstreet.com (Barcelona) - Nomura economists Charles St-Arnaud and Martin Whetton note that actual capex in volume terms fell 4.7% QoQ in Q1 2013, the biggest quarterly decline since Q3 2009.

Overall, they feel that the data confirm the weakening trend in capex and support the view that the peak in mining investment is likely to be in H1 2013. They add that this also shows that the contribution to growth from investment will likely be negative again in Q1 2013, with estimates pointing toward a further drag on growth from investment for most of 2013.

Moreover, based on completion ratios for the past three years, they believe estimate 2 suggests that investment in the non-mining sector is unlikely to be strong enough to compensate for the decline in the mining sector, which suggests that the rotation from the resource sector to the non-resource sector may be bumpy. They write, “The report increases the odds of a rate cut at the next RBA meeting, in our opinion. However, the recent depreciation of the Australian dollar may allow the RBA to wait. We continue to believe that a rate cut is likely either at the June or July meeting.”

Flash: GBP/USD charts a bullish engulfing pattern – Commerzbank

GBP/USD charted a bullish engulfing session yesterday, and that this suggests the market will continue to hold above their 1.5035/1.4997 target zone
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