* Australian jobs market beats all expectations in April
* 33,700 jobs added, with jobless rate steady at 5.4 pct
* But RBA in wait and watch mode, given European worries
* RBA's Lowe highlights risks to Asian growth
By Anirban Nag
SYDNEY, May 13 (Reuters) - Australia's employment soared in April, beating expectations as firms ramped up full-time hiring in a sign of growing confidence in the economy, but rates look set to remain on hold given the turmoil in financial markets.
Thursday's data showed unemployment stayed low at 5.4 percent, with a healthy 33,700 jobs being added in April. That followed a similar rise in March, marking the eighth straight month of gains.
Earlier in the day, Reserve Bank of Australia (RBA) Assistant Governor Philip Lowe said confidence in Europe's finances has stabilised but concerns about sovereign debt could build again, posing a risks to Asian growth.
Any slowdown in Asian growth would hit Australia hard as the region is its biggest export market and concerns about a possible fall-out from Greece's debt crisis are expected to persuade the central bank to look past the robust jobs data.
"Despite the RBA's increasing concerns over the inflation outlook and a tightening in the labour market, we think global factors dominate and expect the RBA to stay on the sidelines for the next couple of months," said Su-Lin Ong, senior economist at RBC Capital.
The Australian dollar edged up after the stellar jobs numbers, but bill futures were broadly lower with the report doing little to alter expectations that the central bank will keep rates on hold when it meets again on June 1.
The central bank raised its cash rate by 25 basis points to 4.5 percent last week but signalled it would take a pause in its tightening cycle. It has hiked by 150 basis points since October and markets see rates on hold at least until August.
The RBA has been one of the most aggressive central banks in withdrawing the monetary stimulus in the past few months. Part of the reason for the tightening is an expected huge boost to Australian incomes and investment from higher iron ore and coal prices. In addition, the housing sector is showing signs of overheating while the jobs market has been recovering much faster than anyone had expected a year ago.
The latest employment rise takes total employment gains to date in 2010 to a whopping 110,000 with the economy adding 28,000 jobs on average each month this year. Last month's rise in full time jobs that offer better security and higher pay -- an addition of 37,500 positions -- was even more impressive.
OUTLOOK BRIGHT, INFLATION A KEY CONCERN
The jobs market has shown remarkable growth, with nearly 250,000 jobs being added since August last year and job ads and vacancies point to more strength ahead.
"With leading indicators such as the employment component of the NAB business survey recently creeping higher, it appears that solid employment gains are set to continue," said Helen Kevans, economist at JPMorgan.
But the strong labour market poses a challenge to the central bank by driving up wages and adding to inflation pressures.
Lowe addressed those concerns in a speech to an investment forum, saying that despite market turmoil caused by fears the Greek crisis could spread the central scenario for Australia was positive, mainly due to the terms of trade boom.
Huge price increases for iron ore and coal, Australia's two biggest exports, are expected to shower money on the economy through higher profits, investment, wages and tax receipts.
Last week, the central bank estimated the terms of trade -- the ratio of export prices to import prices -- would rise around 20 percent this year, lifting incomes by around 4 percent.
Lowe said boosting supply to keep up with increased demand and avoid a rise in inflation would be a major challenge for the Australian economy.
"Over the past couple of decades, low and stable inflation has clearly been one of the critical elements in Australia's good economic performance. We need to make sure this continues," said Lowe. (Editing by Ed Davies and Tomasz Janowski)