Bell FX Currency Outlook: The Australian Dollar is slightly weaker this morning after a mildly negative night in offshore markets.

Australia: Mixed signals came on European sovereign debt and some disappointing corporate earnings results out of the US sent some "jittering" into the markets.

The IMF commented on European bank deleveraging which weighed on sentiment. The AUD felt pressure following BHP's Q1 production report.

Seeing the AUD drift back indicates further testing of the base of USD1.0300 is on the cards, and a break on the downside there could well see the AUD testing the late 2011 lows of USD0.9600. All eyes are now looking to the CPI data due for release next week; as this will be the last piece of data the Reserve Bank of Australia will review before the interest rate announcement the following week.

Until then, one tends to think we'll have a period of consolidation with not much in the way of sustained direction. The NAB Business Survey for the March quarter is the only local data being released today.

Majors: The IMF noted in their Global Financial Stability Report that the sovereign debt crisis in Europe remains the biggest threat to global growth.

The report estimates that European banks could be forced to shrink their balance sheets by as much as EUR3.8 trillion by the end of 2013 under a worse-case scenario, resulting in a significant contraction in credit availability.

Spain's central bank warned that commercial banks would need another €29.1 billion of extra provisions and €15.6 billion of core capital to counter bad loans, which rose to a fresh 17 year high of 8.2% in February.

Italy announced that it would not meet its Budget target of a balanced budget in 2013 but instead will run a deficit of 0.5% of GDP. This was due to a slashing of the growth outlook, cutting GDP to -1.2% in 2012, nearly three times the fall in GDP forecast in December.

Italian Prime Minister Monti said the country will continue with severe fiscal austerity and post a structural budget surplus next year. US equities fell slightly, after a session of relatively choppy trading.

Financials reported the largest decrease (-0.8%), and after yesterday's gain the technologies sector fell by 0.8% following weaker-than-expected results from Intel and IBM. But it's tonight's Spanish debt auction that we're looking closely at the most.
Economic Calendar
19 APR AU NAB Business Confidence 1Q
EU Euro-zone Consumer Confidence APR
US Existing Homes Sales MAR