Bell FX Currency Outlook: The Australian Dollar had a brief boost to two month highs after the UK and European Central banks announced fresh bouts of stimulus overnight.

Australia: The local unit again had a short lived run past USD1.0300 against the Greenback but later pared gains as the stimulus failed to spur confidence. Meanwhile, China surprised markets with a cut in its lending rate for the second time in two months overnight.

The People's Bank of China announced a cut to its 1 year deposit rate by 25bp to 3.00%, and their 1 year lending rate to 6.00%. The domestic session yesterday saw Australia's Trade Deficit widen in May as imports rose faster than exports. Australia's trade balance widened by AUD259m as exports grew by 2.2% m/m and imports grew by 3.2% m/m, reflecting solid activity levels in Australia. With no major data releases today, we expect the AUD to drift lower as market expectations are mixed going into US payroll data due out tonight.

Majors: As was widely expected the ECB cut rates overnight by 25bps to a record low, whilst the Bank of England announced it would buy GBP50bio pounds of assets. The BOE's bond purchases with occur over a four month period. The Danish Central bank also cut rates by 25bps overnight.

The euphoria that initially drove markets higher later faded with European equities declining seemingly uninspired by the ECB's policy easing.

The German DAX closed 0.4% lower at 6,536, whilst the FTSE closed 0.1% higher at 5,693. US equity markets fell slightly ahead of key payroll data tonight. The Dow Jones closed 0.4% lower at 12,897 whilst the S&P fell 0.5% at 1,368.00. Gold prices also fell closing 0.7% lower at USD 1,604.3 per ounce, whilst oil prices were mixed with WTI futures closing little changed at USD 86.80 per barrel and Brent futures closing up 0.7% to USD 100.03 per barrel.
Economic Calendar
6 JULY GE Industrial Production MAY
UK PPI Input / Output JUN
US Change in Non-Farm Payrolls JUN
US Unemployment Rate JUN