Bell FX Currency Outlook: The risk rally continued on Friday as both Germany and France reiterated their intentions to also do "whatever it takes" to support the EUR after ECB President Draghi's remarks on Thursday.

Australia: The Australian Dollar continues to move higher as Eurozone leaders pledged their support to do whatever is necessary to preserve the European monetary union. All major equity markets continued to move higher again in anticipation of further coordinated stimulus moves by the ECB and US Federal Reserve Bank in coming weeks and months.

Most analysts believe that these comments will lead to the ECB buying sovereign government bonds directly although this has not yet been agreed to by the European power brokers. With this buoyancy in financial markets the AUD has been pushed well into the 1.0400's.

This week in Australia we will see a slew of data beginning tomorrow with private creditand building approvals numbers for June, followed by retail sales and international trade numbers on Thursday. All eyes will closely follow the US Federal Open Market Committee's meeting on Wednesday and the ECB monthly meeting on Thursday for further evidence of coming stimulus.

We tend to believe the US Fed will not act but will keep its 'powder dry" for the time being. AUD seems bid for now, and should perform better than the Men's 4 x 100m relay swimming last night.

Majors: The optimism in financial markets continued over the weekend after it was reported ECB President Draghi will meet soon with German Bundesbank President Weidmann to discuss the ECB buying directly Spanish and Italian government debt rather than only using the EFSF bailout fund.

Major equity indices continued to move higher for the second day in a row with the Dow up another 1.51% to over 13,000 (13,076) after European markets led the way again. The major Spanish index, IBEX 35, is up almost 10.1 in the last two days. Commodity prices across the board were all generally firmer.

All the news out of Europe overshadowed the release in the US of estimated Q2 GDP data on Friday which saw their economy grow by 1.51 annualised as compared to forecasts of 1.41. It is generally felt that the second half of 2012 will see a slight improvement as consumer prices moderate and the effect of lower gasoline and energy prices move through the economy. The University of Michigan's forecast consumer confidence survey for July was slightly higher than expected (72.3 vs. 72).

Economic Calendar
30 JULY JN Industrial Production JUN
EU Euro-Zone Consumer Confidence JUL
EU ECB Calls For Bids in 7-Day Main Refinancing Tender
US Dallas Federal Manufacturing Activity JUL