Australian Miners To Spend Less
The Australian dollar came under moderate selling pressure after Australia’s Q3 capex report was published overnight. Spending during the quarter beat consensus estimates but miners sharply downgraded their spending plans for the current financial year. The report cements the view of our Australian economics team that the RBA is likely to cut another 25 bp off the cash rate on Tuesday, and they now acknowledge a risk that a further cut may even be needed later. Currently only 18 bp worth of easing is priced into the rates market for this meeting, suggesting there is scope for some AUDUSD downside next week. Earlier, risk appetite more generally got a significant boost after conciliatory remarks from US politicians suggested there is still enough time to reach a political compromise before the fiscal cliff hits.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank