Australia: The Australian Dollar has opened this morning just under 0.9200 after breaching this level on Friday night after the market digested the release of US July non-farm payrolls that saw a decline of 131k in the month, which was more than the forecast loss of 65k.

Also disappointing was a revision downward for the June figure by 96k to a loss of 221k for the month.

The unemployment rate held steady at 9.5%, as fewer people were looking for jobs. The bright spot in all of this was an increase in private sector payrolls of 71k, which was again below the anticipated figure of a gain of 90k.

The equity markets at first reacted very negatively with the Dow off over 100 points, but by the end of trading the Dow was only off 0.2% to 10,654 with the S&P 500 off by 0.4% to 1.122 and NASDAQ weaker by 0.2% to 2,288.

Concerns about a double dip recession in the US are still there but with a FOMC meeting on Tuesday this week there is a strong suspicion the Fed will offer some clues on whether it will continue with its quantitative easing.

With this prospect, the yield on US 2 year treasury bonds fell to 50bps, a new record low while 10 year bonds fell to a 16 month low of 2.82%.

Commodity prices were mixed but crude oil fell 1.6% to US$80.70 a barrel. Gold spiked up almost 1% to finish at US$1205 an ounce.

The huge run up in wheat futures ended on Friday when wheat fell almost 8% after a rise of almost 80% in 5 weeks as investors speculated farmers would plant more wheat in the future.

This week eyes will be focused on the jobs data due Thursday which is anticipated to rise by 20k and the unemployment rate of 5.1% to remain unchanged.

On Tuesday and Wednesday China will release a slew of data for July that will likely have a large influence on how the AUD trades this week.

Majors: The AUD has lost a little ground on the cross rates with the EUR/USD trading above 1.3300 on Friday after the US payroll data which sees the AUDEUR just above 0.6900 this morning.

Industrial production in the Eurozone and the UK eased in June with Germany recording a decline of 0.6% and the UK a negative 0.5% figure which saw all European equity markets lower by 0.4% to 1.3% on Friday.

Cross rates on AUD/GBP (mid 0.5700's) and AUD/JPY (low 78's) are slightly lower than we saw on Friday afternoon.

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