Following rumors earlier this week, ratings agency Standard & Poor's placed 15 Euro-zone nations on negative watch overnight, including that of Europe's flagship economies Germany and France. A possible downgrade of the Euro-Zones largest economies has raised fresh fears over the European Financial Stability Facility retaining its triple-A status. This of course places addition pressure on European leaders ahead of Thursday's summit, which we expect will be a 'sink or swim' moment across risk assets.

The market's expecting an all encompassing plan, including greater participation by the European Central Bank; anything short of expectations will no doubt thrust the Euro-zone debt crises well and truly back into the spotlight after a reprieve of sorts in recent days. Nevertheless, market participants have responded in kind to efforts by Germany and France to amend the European Union treaty to include surveillance and tougher penalties to nations who exceed the 3 percent debt to GDP limit.

An encouraging factor in recent days has also been the retreat of Italian debt yields, with 10-yr maturities falling below 6 percent, after rising well beyond the perceived 'bailout' levels of 7 percent in recent weeks. Euro-zone preliminary GDP rose 0.2 percent in the third quarter, matching economist's estimates and second quarter growth to represent annual growth of 1.4 percent. German factory orders surpassed estimates to record a seasonally adjusted 5.2 percent in October, outstripping expectations of a 1 percent rise. 

Across the Atlantic, U.S equities markets managed to squeeze out meager gains by the close with the S&P and DOW advancing 0.1 and 0.4 percent respectively.

The Canadian dollar outperformed it commodity counterparts with a helping hand from the Bank of Canada which kept benchmark interest rates on hold at 1 percent. The post decision statement appeared more positive than expectations with Governor Mark Carney pointing out stronger than expected US growth, with local growth also slightly stronger than previously anticipated. In essence, the central bank has given no indication on rate cut is on the cards, instead highlighting the momentum seen locally with solid business investment and household spending rating a mention. An encouraging factor remains with stronger economic picture seen south of the border with U.S fundamentals - for the most part - providing a slightly more optimistic picture. Exports to the U.S account for around 70 percent of Canadian exports.

The Aussie dollar held its ground overnight with price action comfortably above 102 US for majority of U.S trade after falling to lows 101.55 in the ensuing period of yesterdays RBA interest rate decision.  The day ahead will see the focus shift to local gross domestic product data which is expected to show the Australian economy grew 1.2 percent in the third quarter to represent annual growth of 2.3 percent. A move to upside in local trade should be met with resistance at 103 US cents. Nevertheless, we're not expecting a clear trend to emerge until markets participants are well and truly informed from EU leaders at this week's summit. We consider forthcoming feedback from the European region critical to A$ fortunes. With expectations surrounding the summit building, the Aussie could find itself in a vulnerable position should EU leaders disappoint. On the flip side a technical break of 103.4 US cents should leader appease the market could see the local unit test October highs around 107 US cents. At the time of writing the Aussie dollar is buying 102.45.