In his first meeting at the helm of the European Central Bank, Mario Draghi made the surprise move overnight by cutting the benchmark interest rate by 25bps to 1.25 percent. In contrast with his predecessor, Draghi has kicked off his tenure in dovish fashion - at odds with Jean-Claude Trichet's vigilance on controlling price pressures. In his post decision address, Draghi pointed out the Euro-zone may be headed for a mild recession and expects inflation to decline in 2012 - which suggests the ECB is ready and willing to cut interest rates further. Draghi failed to provide a concise view on the ECB bond buying operations for struggling nations, only saying the program is temporary. 

Meanwhile, Greek PM George Papandreou has made an about-turn on his plan to put the latest EU bailout to the people. After days of intense pressure, it appears Papandreou has been forced to modify his plans for a referendum, now suggesting if his ruling party can reach a consensus with the opposition - this would not require the bailout terms to be put to a public vote.

After the ECB decision, the Euro began a leg-down to lows of 1.3658 but soon pared losses after the decision spurred optimism across markets - this optimism spilled across to the U.S with stocks managing to extend yesterday's gains with the DOW and S&P finishing up 1.76 and 1.88 percent respectively.

Across the Atlantic, U.S weekly jobless claims came in slightly better than anticipated with the number of claims for the week ending Oct 22 falling to 397,000. Factory orders also surprised to the upside recording 0.3 percent growth in September against the expected decline of 0.2 percent.

The Aussie dollar rode the risk-on wave higher with price action making a convincing break of 104 US cents. Nevertheless, it by no means an indication that we're in for a sustained move higher with overnight strength seemingly nothing more than a relief rally and a reaction to the ECB's dour view on the economy. In the absence of local economic data, we're expecting a reasonably quiet day with a downside bias. A convincing break to the downside of 104 US cents expected to hold above 103.5 - but ultimately the next level of support can be seen at 102.9 US cents.