Australia: The Australian Dollar is higher this morning and trading at USD 0.9685 on a more bullish tone as strong data drove traders towards riskier assets.

Stronger Chinese PMI and then better than expected US data provided the momentum and saw the AUD move north through 0.9600 and towards 0.9700.

The improvement in global growth sentiment was further exemplified with US Treasuries being sold off as safe haven demand decreased and further speculation mounted that the ECB would act to stop the spread of contagion in the eurozone.

This happens following the weak data result in Australia yesterday after real gross domestic product rose by a seasonally adjusted 0.2% in the September quarter compared with a downwardly revised 1.1% in the June quarter.

The median market forecast was for growth of 0.5% in the September quarter, so despite this soft domestic data, the AUD remains correlated to Chinese developments.

The Australian Bureau of Statistics (ABS) releases retail trade figures for October and international trade in goods and services, also for October, at 11.30am.

The market forecasts a 0.4% increase in retail trade in the month so we will gauge some feel for consumer spending and by virtue, confidence and sentiment heading into the Xmas spending period.

We see the AUD holding these gains today.

Majors: The EUR regained some of its recent losses after failing to push below 1.3000 yesterday amid reports the ECB was contemplating to expand its bond purchasing scheme to manage the European funding issues.

The EUR was also assisted by the Chinese PMI data. GBP held ground with the strongest PMI result since 1994 while
USD/JPY lifted on the improvement in risk appetite.

Crude oil rallied while spot gold in essentially unchanged at ~ US$1,400 / oz.

Base metals had a run on the improved risk sentiment while wheat prices soared a whopping 7.3% on concerns that excessive rain in Australia will hurt grain quality and delay the current harvest.

US weekly jobless claims are released tonight and ECB Trichet's post rate meeting press conference. Watch too for Spain's auction
of up to EUR2.75bn of 2013 bonds tonight.

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