Asia Pacific shares are set to rally today after US employment data released on Friday night indicated the US economy is neither too hot nor too cold. Investors in China and Japan return after a holiday interrupted week. A stronger US dollar, another full week of data and central bank decisions will likely drive markets. Lighter Australia trading is expected ahead of tomorrow night’s federal budget.

US unemployment hit eighteen year lows and underemployment continued to improve in April. While the number of jobs created and wages growth both improved they were slightly behind forecasts. Major indices lifted more than 1% and futures markets indicate the positive sentiment will spill into today’s trading. Rallies in oil, gold and aluminium will likely lift resource exposures.

Activity data, including PMIs, and consumer price index readings from around the globe will help investors identify the current state of play. European economies are in the spotlight. Trade data from China could dominate tomorrow’s session. Later in the week the RBNZ and the BoE will deliver interest rate decisions, keeping market focus on potential currency reactions.

Improving government revenues give the Australian Treasurer choices in Tuesday night’s budget. The biggest call is deciding between an earlier budget surplus and tax cuts. Given a federal election is expected within twelve months many forecasters are leaning towards a hand out for voters. If this is the case it could add to positive momentum.