Bell FX Currency Outlook: The Australian Dollar has continued its recent appreciation, pushing into the high 1.0400's on Friday, as equity markets continue their firm tone while recently released Q1 corporate earnings are strong.

Australia: Although the US Q1 GDP data was lower at 2.2% on a quarter-on-quarter annualised basis than the 2.5% figure widely predicted, this was largely ignored as both European equity indices moved higher with the Euro Stoxx 50 and German DAX leading the way with rises of 0.9% which flowed through to the US session with all three major indices registering small gains.

Although all analysts are predicting a lowering of the cash rate by 25bps to 4% when the RBA meets tomorrow with further reductions likely in coming months, the positive sentiment in financial markets has outweighed a predicted decline in our interest rates although we suspect next week's Australia's budget which will show a small surplus may have an impact.

Today we will see the release of private sector credit data and new home sales for March as well as TD Securities inflation data for April.

Later this week all eyes will be on Friday's RBA Statement on Monetary Policy for further clues on the direction of the economy and
especially interest rates. Trading in Asia today is likely to be muted due to a Japanese public holiday.

Majors: Although the US Q1 GDP was lower than predicted, there was continuing encouraging signs that the recovery continues in the US with personal consumption increasing by 2.9% on an annualised basis although government spending which continues to fall (down 3%
annualised) reduced growth by 0.6% for the quarter. This will continue to
the case for at least several years as governments at all levels (local, state
and eventually federal) in the US look to reduce their spending and rein in
their budget deficits. Another positive note was the final reading of the
University of Michigan consumer confidence survey for April of 76.4
versus the 75.8 predicted by the market. The index now stands at its
highest level since January 2008 and has registered 7 consecutive months
of gains. The Bank of Japan's attempts to weaken their currency last
week with further large quantitative easing measures has not had the
desired effect with the USDJPY trading at 80. Many market technical
analysts see the USD weakening in the near term as some moving
average levels have been breached. The reality of Spain's economic
plight was obvious after their unemployment rate of 24.4% was announced.

Economic Calendar
30 APR AU Private Sector Credit MAR
AU HIA New Home Sales MAR
EU ECB Announces Bond Purchase
1 MAY AU RBA Interest Rate Announcement