Bell FX Currency Outlook: The Australian Dollar has opened in the low 1.0400's this morning as financial markets moved very little over the weekend.

Australia: Equity markets closed on Friday to similar levels on Thursday as investors' eyes focused on the ongoing stalemate in the US over the fiscal cliff issue. The major equity indices in the US were unchanged while the major European indices only registered small gains or losses.

US personal income and spending data for October was weaker than expected while China's official PMI data in November was released on the weekend and revealed a final figure of 50.6 which is the highest level in seven months.

Most analysts believe a modest upturn is underway which should see Chinese Q4 growth pick up to the 8% level. There is still some hope that another cut in the reserve requirement ratio for banks will happen in this quarter as well. This week is a huge week for data releases
worldwide and locally.

Today in Australia we will see retail sales for October as well as company profits and inventories for Q3 as well as the ANZ job ad results for November. Tomorrow the RBA meets and the pundits predict an 80% chance of a 25bps rate cut in the 3.25% cash rate.

With the next RBA meeting scheduled for early February, 2013 most economists predict some of the local and global softer figures we have seen of late will see the RBA move now rather than wait.

On Wednesday we will see Q3 GDP data followed on Thursday by labour force data. We would expect the AUD to trade lower if most of the predictions in the marketplace come to pass. Nevertheless, these announcements can offer some surprises.

Majors: In the US personal spending in October declined by 0.2% and personal incomes were flat but these figures were affected by Hurricane Sandy which hit the Northeast of the US very hard last month. Optimism on an early resolution to the fiscal cliff faded toward the end of the week with many now predicting a compromise will not be reached in the next few weeks.

After the meetings in Europe last week concerning the bailout of Greece, markets traded in a narrow range as yields on Italian and Spanish government bonds moved lower.

This week will see a number of central bank meetings around the world with the Bank of Canada meeting tomorrow followed by the Bank of New Zealand on Thursday where the market expects the cash rate to remain at 2.5%. Also on Thursday the Bank of England and the European Central Bank meets and we expect no significant change in their respective monetary policies. On Thursday in the US ISM manufacturing data for November will be revealed followed by the next day's keenly watched non-farm payroll figures for November.
Economic Calendar
03 DEC AU RETAIL SALES
AU AIG MANUFACTURING INDEX
AU ANZ JOB ADVERTISEMENTS
NZ OVERSEAS TRADE INDEX
CH NON-MANUFACTURING PMI
CH HSBC FINAL MANUFACTURING PMI
EU FINAL MANUFACTURING PMI
GB MANUFACTURING PMI

For latest pricing and range, visit www.bellpotter.com.au