Bell FX Currency Outlook: There are market expectations that the Fed may taper its bond purchases in December after the strong US payrolls report last Friday.

Australia: The AUD is trading higher, while the USD is broadly weaker. The AUD was helped by this morning's Fonterra announcement which
surprised by the absence of an upgrade to Fonterra's milk price forecast.

AUD/NZD could test higher in the short-term with the market short and the NZ news flow recently suggesting that the growth acceleration might be
mature. The NAB business survey showed that business confidence declined modestly in November but remained above the average level of
the past couple of years and actual business conditions continued to gradually improve but remained at a relatively low level.

However, firms continued to report ample levels of spare capacity in their businesses which needs to be soaked up by stronger demand before a meaningful improvement in capital expenditure intentions can be expected.

Encouragingly, business profitability appears to be slowly improving. Meanwhile, housing finance increased in October in line with market expectations (+1.0% m/m) to the highest monthly value on record. Growth in investor finance approvals remained particularly strong.

Majors: As the US dollar lost ground against most currencies over the past 24 hours, the AUD was amongst the best performers, gaining about
0.4% against the US dollar, just pipped at the post by the Norwegian Krone in the G-10 basket. China's renminbi hit an all-time high overnight of
6.0909 against the US dollar.

China Industrial Production and Retail data yesterday provided more evidence that the economy is stabilising at a lower but still solid growth rate. Production rose 10%yoy (median forecast 10.1%); Retail Sales rose 13.7% (f/c 13.3%) and Non-rural Fixed Asset Investment rose by 19.9% (f/c 20%). These numbers went through the market with hardly a ripple and are good news for continuing strong volume increases for Australian exporters.
Economic Calendar
11 DEC AU Westpac Consumer Confidence Index Dec
JN Machinery Orders MoM Oct
US MBA Mortgage Applications Dec
US Monthly Budget Statement Nov

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