It was a relatively quiet night for equity markets with London closed.
The Dow was unchanged but the S&P500 reached a new high, rising a further 0.2%. In Europe, markets were weaker on mixed economic news (see below).
The Dax fell 0.1% while the French CAC40 fell 0.2%.
Bond yields edged higher in the wake of the US payrolls data and increased bond supplies via US bond auctions this week.
In Australia, 10 year bonds yields pushed up to 3.12% while US long bonds were up a further 2 basis points to 1.76%.
The AUD opens weaker against most currencies today as markets overnight focused on the possibility of a rate cut by the RBA following the weak retail sales figures for the month of March.
In wider markets, the USD gained on the euro as ECB chairman Draghi contemplated the possibility of another rate cut in Europe.
While the London Metal Exchange (LME) was closed, copper futures prices eased back after the strong gains on Friday (associated with the US payrolls data). Oil prices firmed and gold was a touch higher.
Today the RBA makes its monthly announcement on the cash rate.
We expect the RBA to remain on hold following the strong Q1 retail sales. Our main concern is business investment and we suggest the RBA will delay a cut to the cash rate until it has a clearer picture of that portion of the economy.
Retail sales were mixed, with monthly retail sales values weaker than expected, falling 0.4% in March.
The annual rate of retail sales fell to 3.2% in the year to March, from an eight-month high of 4.6% in the year to February. Meanwhile retail sales volumes (which are adjusted for price moves) jumped 2.2% in the March quarter, driven by sizable increases in household goods retailing and 'other' retailing.
For the year to the March quarter retail sales volumes picked up to 3.6%, from growth of 2.6% in the year to the December quarter.
The TD-MI inflation gauge rose 0.3% in April, so that the annual inflation rate held at 2.1% for the year to April.
This data confirmed that inflation remains contained and would give the RBA scope to cut interest rates if necessary.
ANZ job ads were disappointing, falling 1.3% in April after slipping an upwardly revised -0.4% in March (previously reported as -1.5%). For the year to April, ANZ job ads are down 18.2%.
China: The HSBC services PMI fell to 51.1 in April from 54.3 in March.
This was the lowest since August 2011, although it remains above the 50% level indicating services sector activity expanded in April.
The new orders subindex dropped to 51.5 in April and the employment index fell below 50 to 49.6 in April.
Estimates for the Eurozone services PMI in April lifted to 47.0 from 46.6 in March.
That was the good news. It was still below 50 but heading in the right direction. Investor sentiment had a similar twist.
The Sentix Investor Sentiment index for May (-15.6) was not as bad as the reading for April (-17.6).
The retail sales figures, however, were unambiguously bad. Sales for the year to March were down 2.4% compared to negative 1.4% in the year to February.
For the month of March, Eurozone retail sales fell 0.1%.
Little wonder that equity markets edged lower.
No statistics and no market moving news - apart from the S&P500 reaching a new record high.
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