COPPER TECHS: (K5) Trend Needle Points North

• The greenback remains on the front foot Wednesday, and AUD continues to standout as the weakest performer in G10 at the US cash equity open. Major equity indices have turned lower in recent trade alongside a further pullback for gold which is likely adding to the softer AUD dynamic. AUDUSD (-0.66%) has breached 50-day EMA support and is now testing 0.6300. Attention below is on 0.6231, the Feb 10 low.
• JP Morgan have flagged value date month-end for US corps as providing a potential AUDUSD headwind, suggesting that flexibility is key ahead of US PCE plus potential further month-end rebalancing flow.
• Separately, Goldman Sachs believe today’s monthly inflation data reinforces the case for a dovish RBA pivot as the domestic macro catches down to their G10 peers. They highlight the out-delivery of RBA cuts that they are expecting could still act as a lasting headwind to AUD more generally throughout this year.
• We also pointed out that Australia is planning to review the fallout on Southeast Asia and the Pacific of President Trump’s planned cuts to USAID. The government’s latest foreign policy assessment warned of an “increasingly unpredictable” global strategic outlook. 

The IFO employment indicator came in at 93.0 points in February, remaining above December's 92.5 cycle low but declining vs January's 93.4. While the manufacturing subindex ticked up a bit but remained the weakest out of the main sectors, the overall decrease was driven by services and construction, with "IT service providers in particular" slowing down hiring, IFO comments.

• Recall that according to detailed Q4 labour market data out last week, excluding the public sector, employment continued to decline - and also, productivity was notably weak in Q4 again (real GDP per hour worked -0.5% Q/Q, negative for the third consecutive time), a development which could underpin future job cuts.
• The monthly German labour market update will be released on Friday, providing an update on unemployment (expected unchanged at 6.2%) and vacancies for February as well as employment data for January.

• StatCan’s non-resi capex survey showed businesses and government planned to increase capital expenditure by a nominal 5.5% in 2025.
• It follows an estimated 4.5% in 2024 (unrevised from its initial intention figure) and 12.5% in 2023 (which was revised up again from 8.2% in last year’s estimate and an initial intention of 4.3%).  
• A word of warning: it was collected through Sep 2024 – Jan 2025 and explicitly came before the recent tariff announcements, although that still captures plenty of time for responses since President Trump’s presidential election win on Nov 5.
• Both private (5.5%) and public (5.7%) are seen intending to follow similar capex plans for 2025 but it follows a notably different 2024, when private capex increased 0.1% vs 12% for public.
• Private sector capex is seen somewhere in the region of 7.5% GDP for 2025 vs a little over 5.5% GDP for the public sector.
• Some of the more interesting sectors: manufacturing capex is seen increasing 15.5% this year after a 16% increase in 2024 (likely some onshoring to firm up tariff prone areas) whilst the large public administration sector is set to increase a solid 8.6% after surging 25% in 2024 and 15% in 2023.