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Brief Update and Australian Private Capital Expenditure (Private CAPEX)

Written by Sam Coxhead on May 26th, 2011.      0 comments

11:45 AM (AEST) The strange conditions in the markets continue this week with the ebbs and flows of appetite for risk. Constantly in the background is the ongoing Greek debt tragedy. The EURO seems to have a found a bit of a base and further stimulation will be needed if we are going to see another leg lower. Disappointing economic data in the US overnight saw a brief dip in the equity markets, before oil inventory numbers showed a dip and the oil price rallied and the equity market bounced back along with it. Asian equities have opened higher between .8 - 1.5%. The choppy price action does not produce confidence and talk of lower levels of liquidity are emerging. This is not surprising given the Greek debt uncertainty and probable knock on events that would happen should full default occur.
The surprising relative strength of the New Zealand dollar continues from Friday night’s advance. The RBNZ Inflation Expectations survey and Fonterra release may have provided some stimulation but the appreciation cannot be fully attributable to these. More likely, and impossible to predict is a further re-insurance buy flow for the Christchurch earthquake cover.
The Australian dollar remains under a little pressure as further investor liquidation of bought positions occurs, but has bounced off lows against the USD as the equity and copper markets seemingly have a short squeeze.
The quarterly Australian Private Capital Expenditure numbers just released showed a increase of 3.4% against an expectation of a 2.8% increase. The next quarter forecasts are for record levels of Private CAPEX. This has boosted the AUD and taken the NZD along with it, and will add to the upswing in as risk appetite for this Asian session.
          Past 24 hours
  Current level Pre- AU Priv CAPEX  % Chge since Priv CAPEX   Low High
NZD/USD 0.8050 0.8024 0.32%   0.7902 0.8050
AUD/USD 1.0592 1.0565 0.25%   1.0440 1.0592
NZD/AUD 0.7600 0.7595 0.07%   0.7545 0.7600
AUD/NZD 1.3158 1.3167 -0.07%   1.3158 1.3254
NZD/GBP 0.4929 0.4920 0.18%   0.4886 0.4931
NZD/EUR 0.5687 0.5675 0.21%   0.5634 0.5688
NZD/JPY 65.89 65.77 0.18%   65.05 65.90
NZD/CAD 0.7852 0.7837 0.19%   0.7754 0.7852