Australia: The AUD had a pretty quiet trading session yesterday and last night, and like most of the markets, is just awaiting details on the US budget deficit plan and Greek bailout plan tonight. It is hoped that some form of Greek action plan will be agreed at tonight's EU leader's meeting. The markets were more on the subdued side in the US, on mixed earnings results and ongoing concerns about US Government debt. The AUD is taking its lead from these events at the minute, and its ability to hold onto these gains has been impressive but may not be lasting. The HSBC PMI is released today at 12.30 AEST which provides a good sense of where the official Chinese result may actually be. If this reading is sub 50, the market may interpret this as a warning that China may not achieve a soft landing as it attempts to cool its economy. Economists still believe Chinese growth rates for the first half of 2011 will come in at 9% but inflation remains the main risk when it comes to looking at China and further tightening appears likely. In Australia, the only data due for release is the NAB quarterly business confidence survey for Q2. Our indicative range for the AUD today is 1.0680-1.0775

Majors: The markets will be closely watching developments in Washington tonight, where US President Barack Obama is due to meet opposition Republican leaders to seek a compromise solution to the debt-ceiling battle. President Obama is considering a $3.7tn deficit reduction plan proposed by a 'gang of six' Republican and Democrat Senators. The proposal is for a medium term cut in the deficit over 10 years, a plan consistent with recent pronouncements from the Fed Chairman Ben Bernanke on how to tackle the US's huge government debt, which is set to breach the current ceiling of $14.29tn on 2 August. US stocks were marginally lower, after the rally on Tuesday. Commodities were mainly lower and LME base metals fell 0.9%, copper losing 0.9%, aluminum 0.6% and nickel 0.3%. Gold fell $4.20 to $1596.90. Cotton was down 0.1%; wheat rose 0.5%; and sugar was up 0.4%. European data tonight includes PMI, Consumer Confidence and Current Account. The UK has Consumer Confidence and Retail Sales while in the US, Initial Jobless Claims, Leading Indicators, the House Price Index and the Philadelphia Fed
Survey are due.