Bell FX Currency Outlook: Weaker US data and positive signs out of China propelled the Australian Dollar significantly higher in the offshore session on Friday.

Australia: The local unit has opened slightly lower than its Friday close although still stronger. US payrolls data saw the US dollar weaker across the board with the Euro receiving most of the benefit. Chinese inflation increased 2.0% y/y in August from 1.8% in July; in line with market expectations.

A key driver for markets will be the release of Chinese trade data for August. A weaker print is expected as commodity manufactures continue to cut inventory levels. Domestically this weak Home Loan data will be released today at 11:30am with consumer sentiment released midweek.

The RBA Q3 Bulletin is due out Thursday. Market movers this week shall be the German Constitutional Court ruling on Wednesday night and the FOMC meeting Thursday night. Despite the rally, risk still remains to the downside for the AUD.

Majors: US payrolls rose by 96k in August, below the market expected 130k. A fall in the participation rate saw the unemployment rate decline to 8.1% from a previous 8.3%. The disappointing read increased the likelihood of further stimulus by the US Federal Reserve.

US Treasuries and equity markets rallied modestly with the DJIA closing 0.1% higher at 13,307 whilst the S&P 500 closed 0.4% higher at 1,438. European equities also rose with the FTSE ending 0.3% higher at 5,795, and the German DAX ending 0.7% at 7,215.

The EUR was the main benefactor of a weaker US dollar, which rallied from 1.2630 to 1.2800 and off the back of the previous ECB asset purchase plan announcement.

Oil prices were also generally stronger after the disappointing payroll data with Brent rising 0.8% to USD 114.2 per barrel, whilst WTI futures fell 1.2% to USD 96.4 per barrel. Spot gold also ended higher rising 0.2% to USD 1736 per ounce.
Economic Calendar
10 SEPT AU Housing Finance Approvals JUL
JN GDP Q2
CH Trade Balance & Imports / Exports JUL
US Consumer Credit JUL
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