Bell FX Currency Outlook: The Australian Dollar has opened this morning in the low 0.9800's as markets still focus on the European debt crisis with Spain starting to push Greece off the front page.

Australia: Although Greek opinion polls for the upcoming June 17 election continue to show no clear cut winner it appears that the pro-bailout austerity party, the New Democracy, may be gaining more popularity at the expense of the radical left party SYRIZA.

This news was pushed to the side after Spain's fourth largest bank, Bankia, has asked the Spanish government for a capital injection of EUR19bn due to loan losses throughout its lending portfolio.

Concern is growing on the perilous state of Spain's financial affairs as government bond yields have increased to 6.31% pa from a level of 4.87% pa at the beginning of March.

Markets continued to generally move sideways on Friday with major European indices slightly higher while Wall Street fell slightly with the Dow down by the most at 0.6% to 12,455.

Over the weekend, China announced that industrial profits declined in March by 2.2% but this has had little effect on the AUD since the financial markets seem to be adjusting to the lower projected Chinese growth rate in the next 12 months of 8%.

This week in Australia there is limited news with retail sales for April out on Wednesday and building approvals on Thursday. With US markets closed for the Memorial Day holiday today, there is likely to be modest movement in currency markets over the next 24-36 hours.

Today RBA Governor Stevens is speaking at a payments conference in Sydney.

Majors: The final reading of the University of Michigan consumer confidence survey for May surprised again on the upside T with a reading of 79.3 up from the earlier estimate of 77.8 which is the highest reading since mid-2007.

A slew of US data will begin on Tuesday when the S&P/Case-Shiller-20 city index for housing prices is released and is then followed by Q1's GDP result on Thursday.

All eyes will be on the non-farm payroll release on Friday which also sees announcements on personal spending, construction and manufacturing growth. The EU will also release its latest CPI figures along with unemployment data this week.

Expect to see more news filtering out on Spain over the coming weeks since it is likely there will be other major banks in Spain that will need to seek financial assistance from the government as the messy relationships between regional governments and banks become more public.

Economic Calendar
28 MAY AU RBA Governor Stephens Speech
AU NAB Online Retail Survey APR
US Memorial Day Holiday
IT Bond Auction