Global markets found strength overnight on the news the United Arab Emirates capital Abu Dhabi has pledged $10 billion rescue funds for the state owned Dubai World. Late last month the Government owned company proposed to delay debt payments of around $26 billion until May 2010 sending global markets into a tail spin. With the threat of a Dubai default somewhat easing in the near-term, equity markets remained buoyant resulting in a risk fuelled switch to higher yielding assets at the expense of the greenback. The US dollar index which measures the dollar's value relative to six major foreign currencies declined 0.34 per cent to 76.35. Investors also took heed of the news that Citigroup will exit the Troubled Asset Relief Program by repaying its government bailout funds.

Overnight we also saw Euro-Zone Employment data fall for the fifth consecutive quarter, recording a drop of 0.5 per cent in the third quarter representing a yearly decline of 2.1 per cent. Euro-Zone industrial Production also recorded a 0.6 per cent drop in the month of October.  A slow and fragile recovery predicted by European officials has certainly played out - earlier this month ECB Governor Jean Claude Trichet affirmed the banks current stance on interest rates, indicating they are at appropriate levels for the near term, however signalled the start of the unwinding of economic stimulus. 

Local economic feedback today includes a gauge of the overall health of the housing market with Dwelling Starts expected to show 6 per cent growth in the third quarter. Given a decline in liquidity due to Christmas holiday period, the RBA minutes for the December meeting which is due for release this morning is likely to induce volatility as traders pre-empt the banks stance on interest rates in early 2010. Although we have seen an abundance of economic feedback which suggests the Australian economy remains resilient, recent data has shown early signs of growth consolidating which may provide further weight for the RBA to sit on their hands when they reconvene in February 2010.