Bell FX Currency Outlook: Most of the detail for the Federal Budget and policy changes were well known prior to last night therefore markets were fairly subdued.

Australia: This morning the local currency was trading at around USD 98.95, down from yesterday's close of USD 99.80, marking the weakest start to a session in 11 months.

Treasurer Wayne Swan's Budget for 2013/14, was pretty much as expected, projections showing deficits of $19.4 billion for the current year, $18 billion in 2013/14, with a gradual return to surplus by 2015/16.

The main theme of the Budget was funding the Government's National Disability Insurance Scheme and education reforms in the context of a severely weakened revenue position.

Markets saw that in the context of a weaker economy and that sentiment was enough to push the AUD lower.

Majors: The overnight session saw a continuation of the themes evident across much of the past week. Namely, a strong US dollar, new highs for equities, and a continuing drift upwards for global bond yields.

European equities were buoyed in early trade following better-than-expected euro zone industrial production data. The positive sentiment carried over into the US session with the S&P 500 rising 0.8% to fresh record highs.

US 10yr-yields increased further to 1.98%. Generalised USD strength continued to drive currency markets with USD/JPY pushing to fresh 4-year highs and AUD and NZD under pressure.
Economic Calendar
15 MAY AU New Motor Vehicle Sales Apr, Wage Index Q1
JN Consumer Confidence Apr
EU Euro zone GDPQ1

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