Bell FX Currency Outlook:
The Australian Dollar has held its gains from last week, to open up this morning above 1.0200, after the release of US employment data on Friday evening that was close to market expectations.

Australia: After the strong gains in equity markets last week that saw the best weekly result in over two years for all the major indices and propelled the AUD to trade briefly over 1.0300, trading was more subdued as the US. November jobs data saw a net 120k jobs added in November with private sector jobs rising 140k and further upward revisions of 72k to the two preceding months.

Equity markets in the US finished flat on the day but European indices were generally modestly stronger. Over the weekend Chinese non-manufacturing PMI data fell heavily from 57.7 to 49.7 for last month indicating contraction was underway which might signal more monetary policy easing again later this month.

The focus still continues to be on the events in Europe with all eyes focused on the upcoming EU summit which begins on December 9. There is a slew of data this week in Australia starting with company profits, inventories, jobs data today followed by the RBA rate announcement Tuesday afternoon, Q3 GDP data on Wednesday and the unemployment figure on Thursday.

The market fully expects the cash rate to fall another 25 bps to 4.25%. We believe the RBA may choose to keep their powder dry and see how the European debit crisis evolves before lowering the cash rate.

Majors: In the US, the unemployment rate unexpectedly fell from 9% to 8.6% which normally would be cheered but this was due to more people becoming discouraged and leaving the workforce (315k estimated) and the labour participation falling by 0.2%.

With better numbers out of the US lately this helped push all base metal prices modestly up on Friday with gold slightly higher at US$1746 an ounce and oil prices about 1% higher as the US pushes for further sanctions against Iran. Italian PM Monti this morning announced EUR30bn of budget cuts and tax increases to reign in Italy's budget problems This will be voted on tomorrow by the Italian Parliament. Markets will keenly watch the EU summit later this week to see if there are any further moves toward more fiscal integration of the EU as German Chancellor Merkel rejected a plan for the issue of joint euro area bonds.

Economic Calendar
5 DEC EC Merkel and Sarkozy to meet in Paris
US Fed's Evans (Voting) Speaks in Indiana
AU AiG Performance & TD Securities Inflation NOV
6 DEC AU RBA Interest Rate Announcement