Bell FX Currency Outlook:
The Australian dollar is lower again this morning as investors continue to pour into the traditional "safehaven" of the USD.

Australia: Both the AUD and NZD took a battering overnight following the release of weak Chinese data and the poor performance of a German bond auction. Investor confidence continues to erode as the situation in Europe plays itself out. Evidence of the contagion spreading is becoming increasingly obvious, with the global growth outlook now looking more uncertain by the day. Of particular concern for the Australian economy, and as a result the AUD, is the outlook for the Chinese economy.

Chinese Vice Premier Wang commented yesterday that global uncertainty has increased sharply, and these comments, combined with the weak manufacturing data result, suggest that the Chinese may look to ease monetary policy in the short term. All of these events suggest commodity prices will continue to weaken and the Reserve Bank may also be forced to cut official interest rates, suggesting further falls in the AUD could be on the cards.

Majors: Equity markets throughout the Northern Hemisphere took a dive again overnight, with the S&P500 down 2.2% and the FTSE down 1.3%. A German bond auction managed to draw bids of only EUR3.9bio for EUR6bio of bonds. This has left market participants worried that if
Germany can't borrow money then who can?

The next big test will come on Friday night when an Italian bond auction is due to take place. The EUR fell by over 1.0% against the dollar overnight with further falls predicted in the short term.

As mentioned above, the HSBC and Markit Economics Chinese purchasing managers' index cam in lower than expected at 48.0 for November compared with the October result of 51.0.

A number below 50.0 is considered to be an indication of a contraction. News out of the US wasn't any better with consumer sentiment unexpectedly revised lower, initial jobless claims higher and durable goods orders on the soft side.

Economic Calendar
24 NOV AU RBA Governor speak in Sydney
GE Imports / Exports 3Q
UK GDP 3Q
UK Private Consumption 3Q