Overnight market activity saw several momentum changes over the course of European and U.S sessions. After a positive local session the Australian dollar followed the Euro down versus the US Dollar with final quarter on quarter European GDP coming in at 0.1% versus an expected 0.2%, coupled with rumours of a downgrade for the French by an unnamed rating agency and speculation Italy's and Spain's will also be cut soon .  The move saw a sharp sell off with Euro give up 75 pips and the Australian dollar 30 pips around 10.15pm last night local time. 

The Australian dollar was able to regain ground through the US session, as a positive run on equities driven by financial stocks so the Dow Jones close just down 0.06% after the risk off driven European session.   The Aussie broke back through 1.03 USD after earlier lows were hit of 1.0262 US, will the Euro which was down 1.2 cents overnight at its worst managed to climb back to 1.270 still down just under a cent in the last ten hours.  In terms of the news and reaction overnight it was somewhat of a neutral session, where traders were only left to ponder where the European economy will actually bottom out.

With not much to take away from last night from an equity or currency perspective, today's local session will be squarely focused on the Chinese CPI and PPI data due from release at lunch time.  The Australian dollar as a default exposure to the Chinese economy for traders and we have expectations for CPI to drop from 4.2% to 4% year on year.  Volatility had diminished since an hour before the end of the US equity session, and at the time of writing we steadily sit at 1.0309 USD.