Bell FX Currency Outlook: The AUD is almost a cent higher from this time yesterday, currently trading around USD1.0210, as markets digest the results from the elections in Europe over the weekend.

Australia: While many believed that the results would cause turmoil in the markets, it now seems that investors are confident that a change in government may see the focus shift from "austerity measures" and barely holding the economies together; with a move towards encouraging growth in the regions in the hope to stimulate the flailing economies.

This has proved positive for the markets with gains across Europe's equity markets and only small losses out of the US. Yesterday during our local trading session, retail sales data was released, coming in well above market expectations.

Sales for the month of March rose 0.9%, compared to market expectations of a much smaller gain of 0.2%. Local building approval results were also positive, rising 7.4% in March compared to expectations of a 3% gain.

This positive date saw the AUD strengthen, and gave our local currency the positive tone for the day. The data continues today with Trade Balance figures due out at 11:30am AEST.

We are expecting a deficit of AUD2.8bio, mainly due to a rise in capital goods imports. The other major release today is tonight's Federal Budget.

As always, the past couple of days have seen many "leaks" of what we canexpect. The Labour Government are still confident that we will post a small surplus (as promised); however many believe that in meeting their promise, there will have to be many tough budget cuts made, which may not be well received by voters

Majors: As mentioned above, the election results have been much of the focus for the offshore markets, with many interested to see how the new elected parties will make changes and reinvigorate their struggling economies.

German Chancellor Merkel has offered to work with new French President Hollande, but has opposed any renegotiation of the EU
fiscal compact. Markets reacted well to the changes, with equity markets and the EUR all gaining ground.

This is despite the uncertainty surrounding the composition of Greece's parliament. While Antonis Samaras has been elected, he is unable to reach an agreement with the five other party leaders to form a coalition government.

The EUR/USD has regained a substantial amount of ground overnight after falling to a 5 month low following the results. The EUR/USD has strengthened, currently trading around USD1.0370; up from its low of USD1.2950.

Economic Calendar
8 MAY AU Trade Balance
AU Australian Commonwealth Budget
US NFIB Small Business Optimism
US Fed Fisher Speaks