The AUD continued to drift lower overnight trading below 1.0000 as European debt issues continue to weigh on markets.

Markets tumbled again overnight as a fresh round of European debt fears weighed. Heading for its third weekly decline, the local unit is
down 1.5% against the Greenback opening below parity this morning.

Good news out of the US failed to impress as markets focussed on European headlines. The S&P 500 slumped to the lowest level in a month
falling 2.1% to 1,210.75 at the close, while the Dow Jones also sank 1.7% to finish the session at 11,707.79. There was a sea of red across
commodity markets with copper tumbling 2.5%, oil down 3.4% to USD $108.10 per barrel. Gold also fell sharply as investors flocked to the
safety of US treasuries ending the session down 2.5% at USD $1,720.10 per ounce.

European shares ended what was a volatile session lower with the German DAX falling 1.1% to 5850 and the FTSE 100 1.6% lower at 5423. A woeful Spanish bond auction saw the highest borrowing cost paid since 1997 for the Spanish Government. The auction of EUR 3.65 billion worth of 10 year bonds drew a yield of 6.975%.

Italy's new Prime Minister Mario Monti announced his government will focus on implementing the austerity measures passed by the previous administration, which will aim to balance their budget in 2013. The Italian Government recently announced a bond auction schedule for 2012 of EUR 440 billion, around 25% of the total outstanding issuance.

Fitch Ratings announced overnight Italy's credit rating could be cut to a low investment grade if Italian bonds lose market access. US markets followed the Europe's lead lower, paying little attention to an improvement in jobless figures. US jobless claims again came in below markets expectations of 399k to a 7 month low of 388k showing continues signs of improvement. Suggesting a tentative improvement in housing market conditions, Building permits for the US also impressed jumping 10.9% (Market: +2.4% m/m) in October.

On a less positive note, the Philly Fed manufacturing survey fell below market expectations of +9.0 to +down from the previous read of +8.7%.

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