WELLINGTON/SYDNEY, May 6 (Reuters) - The Australian dollar eased on Monday even as retail sales for the quarter showed a healthy reading, with markets still split down the middle on whether the Reserve Bank of Australia will cut rates this week.
* The Aussie lower at $1.0278, from $1.0305 early, but still a touch above Friday's $1.0265 in late trade.
* It dipped a quarter of a U.S. cent after retail sales for March fell 0.4 pct vs an expected rise of 0.2 pct. However, more importantly real sales rose sharply on the quarter, up 2.2 pct and beating forecasts of a 1.7 pct increase.
* That was the highest quarterly reading since early 2007 and alone adds around 0.4 percentage points to GDP growth in Q1, which is shaping up to be a solid quarter.
* Financial markets still give a 50-50 chance of a quarter point easing to a record low of 2.75 pct at the RBA's meeting on Tuesday. In contrast, a majority of analysts expect the central bank to hold off for now.
* Weighing on the Aussie is a slip in HSBC China Services PMI which slowed to its lowest pace in nearly two years. . Australia is very sensitive to news out of China, its top export market.
* Australian job ads fell for a second straight month in April, while a private gauge of Australian inflation stayed benign.
* Support seen at $1.0235 with resistance initially at , Friday's high of $1.0325.
* The New Zealand dollar firm at $0.8545, from $0.8533 early. Support seen at $0.8500 ahead of $0.8474, Friday's low. Resistance seen at $0.8550, and then $0.8587, the April 30 high.
* Antipodeans hold hefty gains against the yen with the kiwi at 84.62 yen, having risen 1.5 pct on Friday, and within sight of a five-year peak of 86.43 set in April.
* Aussie not far behind at 101.81, after it gained 1.8 pct on Friday. It is still a fair way off a 2008 pinnacle of 105.43 hit last month.
* Trading contained as Japanese markets are on holiday Monday.
* New Zealand government bonds soft with yields up to 5.5 basis points higher on the long end of the curve.
* Australian debt futures fall, in line with Friday's move in U.S. Treasuries. The three-year contract off 0.06 points to 97.440 and the 10-year contract down 0.075 points to 96.890.
(Australia and New Zealand bureaux) Keywords: MARKETS AUSTRALIA NEWZEALAND/FOREX
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