Bell FX Currency Outlook: The Australian Dollar has pushed higher by half a US Cent, to now be above USD1.0300, due to a strong US jobs market result on Friday night.

Australia: The AUD rallied on Friday night after the release of the US payrolls report which was stronger than expected. Non-farm payrolls rose 165K in April, higher than the 140K expectation, while the unemployment rate fell to 7.5% from 7.6%.

There was also a 114K upward revision to the previous two months, with March's gain now 138K, much more respectable than the originally reported 88K, while February was revised to +332K from +268K.

In currency markets, the 'pro-risk' AUD and NZD outperformed, with the USD and JPY suffering from a culling of 'safe haven' trades.

The AUD rose from 1.0260 prior to the US jobs data to reach 1.0322 before retracing.

The AUD continued to face downward pressure amid speculation the Reserve Bank of Australia could cut the cash rate, currently at 3%, when it meets on Tuesday.

In Australia today, we expect retail sales for March to fall by 1.0% after the strong growth of 1.2% and 1.3% in the previous two months but the median forecast for retail sales is a 0.1% gain, so a negative outcome would likely see markets raise their expectation of a rate cut tomorrow (currently priced at a 60% chance).

The key question is whether the RBA has seen enough weakness recently or whether it wants to wait another month and see if
the softness continues, before cutting again.

Also today we have ANZ job ads and the TD Securities inflation measure for April.

Later this week we have the employment data on Thursday, while on Friday, the RBA will release its Quarterly Statement on Monetary Policy. The Statement will provide a full explanation of the RBA's decision tomorrow, as well as their updated GDP and CPI forecasts.

Offshore, Services PMIs in China and Europe are due today. So despite this rally, it could suffer further weakness over the next few days and may make it doubly difficult to trade upwards towards 1.0400.

Majors: As stated above, the labour results were better than markets had expected and saw US stocks rally sharply, with the DJIA pushing above 15,000 points for the first time in history, before dropping back to close below that level.

USD/JPY jumped from 98.00 to above 99.00 on Friday which will have encouraged JPY bears, and put a test of the hitherto
unassailable 100 barrier back onto many investors' radar. This week sees Chinese trade data on Wednesday and CPI/PPI on Thursday as well the Bank of England policy meeting on Thursday night.
Economic Calendar
03 MAY AU TD Securities Inflation Apr, Retail Sales Mar
AU ANZ Job Advertisements Apr
CH HSBC Services PMI Apr
EU Euro-zone Retail Sales Mar