Australia's mining capex drops, non-mining capex outlook improves

In Australia, the firms revised investment plans for 2015-16. The capex survey will provide numbers of actual business investment in third quarter of the year. These two reports are crucial and awaited this week.

The numbers that are anticipated will still point to a big fall in investment this financial year as capital expenditure in mining is now slipping at a fast pace as there is a finishing in remaining projects work.

The non-mining work should improve, which is more important to Reserve Bank of Australia, if the private-sector surveys are reporting that business conditions are back at above-average levels and there is an upward movement in the capacity utilization.

Significant headline weakness can be seen in the construction work done report, if last quarter's result was inflated by importing engineering equipment for one of the remaining gas projects.

Aside from this volatility in engineering construction, which was not reflected in the equivalent series in GDP, we expect strong rebounds in both residential investment and commercial construction.  

"Although we believe that the AUD likely has further room to fall against the USD over the medium term, we expect the two releases to further support AUD outperformance versus the EUR, a view that we have been highlighting in this space in recent weeks", says Barclays in a research note.