The never ending story of Greece's economic hardships in addition the continued Goldman Sachs fallout, plagued global markets on Friday. Risk aversion once again becomes the order of the day with equity markets taking a battering from Europe to the States. The moderately positive Asian trade was nowhere to be seen, with major indices loosing over 1 percent on the day. This translated to mixed results across currencies. The Greenback was mixed against major counterparts with the exception of the Euro, which managed to squeeze out some gains as investors predicted an agreement on government budget cuts in order to receive financial assistance.

And an agreement there was. The bailout package announced yesterday totals 110 billion Euros over the next 3 years - 80 billion of which will be put up by Euro members, with 28 percent to be chipped in from Europe's largest economy, Germany. According to Euro-group President Jean-Claude Juncker, the first instalment will be made before May 19.

But the cash is not without a price. Greece has announced a series of Austerity measures designed to further get the economy back on the straight and narrow agreeing to 30 billion Euros worth of budget cuts, involving lifting retirement age, reduced salaries and tax increases. The Greece rescue is now providing some relief for the ailing Euro, but it wouldn't be unreasonable to expect the subject of sovereign debt to continue to plague financial markets for some time to come.

The week ahead

Locally, we have the much anticipated rates decision on Tuesday. It is now looking very much like a rate hike is on the cards, despite global recovery concerns and sovereign debt issues likely to create some reluctance across the board. We expect the RBA to lift interest rates by 25 bps to 4.5 percent this week in a bid to keep inflation under wraps which last week recorded first quarter growth of 0.9 percent representing an annual inflation rate of 2.9 percent from a previous 2.1 percent.

Retail Sales on Thursday are expected to grow 0.7 percent against a previous contraction of 1.4 percent.

To look abroad the US will release Key economic feedback including the manufacturing, housing data; however investor's eyes will be focused squarely on Friday's non-farm payrolls report for April which is expected to show the unemployment rate steady at 9.7 percent with 200,000 new jobs created.