Equity markets from both sides of the Atlantic struggled to gain traction overnight with investors remaining transfixed on the European Council meeting in Brussels. There's a general lack of enthusiasm surrounding the EU Summit which is expected to provide the building blocks for a deeper Euro region integration. It's clear solidarity among leaders and tentative long-term initiatives will not be a market pleaser as debt ridden nations such as Spain continue to be driven closer to the edge.

Earlier this week, leaders from Germany, France, Italy and Spain announced a new pro-growth alliance with an estimated €130 billion (representing around 1 percent of GDP) to be set aside to focus on boosting growth and employment. While it may be a worthy exercise to channel funds into investment, investors remain unconvinced this 'growth pact' will be enough to kick-start the economy. Leaders are also light on the detail with questions surrounding the origin of the funding, whether it is 'recycled' money already assigned for stimulus programs or newly raised capital.

In economic news, U.S Gross Domestic Product rose at an annual rate of 1.9 percent in the first quarter matching expectations but significantly lower than 2011 fourth quarter growth of 3.0 percent. Personal consumption expenditure data showed growth of 2.5 percent in the first quarter slightly lower than the expected 2.7 percent while core expenditure data showed 2.3 percent growth against expectations of 2.1 percent.

The bears maintained control across currencies with further downside from risk assets promoting upside for the in-form greenback. The Euro continued a controlled decline to set a fresh monthly low of $US1.2406 but quickly bounced earlier this morning to current levels around $US1.2440. Earlier, the Australian dollar made a brief break to the downside of US dollar parity before a bout of Euro strength induced some buying activity around the figure. At the time of writing the Australian dollar is buying 100.4 US cents. We anticipate regional equities will provide the direction in the domestic session with further downside from the Aussie expected to be contained at parity, while a break lower is likely to see support at weekly lows of 99.6/7 US cents maintained. Economic data today includes local private sector credit and Chinese Industrial profits, both scheduled for release at 11.30am.