Overall, the balance of risk fell to the side of caution overnight as key employment data coming up in the States at the end of the week remained in forefront of investors’ minds. US stocks finished the day in the red with the DOW and S&P500 closing down .05 and 0.2 percent respectively. US economic data saw personal income increased 0.4 percent in May against a previous 0.5 percent rise, while personal spending rose 0.2 percent. The outcome of the G20 meeting also continued to resonate through the market as investors pondered how this would affect respective economies.

Over the weekend, the Austerity Vs. Growth debate continued as the G20 reconvened in Toronto, Canada. Beneath the usual fluff and pledges of unity, from the outside it does appear the policy gap has been bridged somewhat. Labeled growth-friendly fiscal consolidation advanced economies have pledged to aim to at least halve deficits by 2013 and stabilise their debt-to-output ratios by 2016; however, efforts to get respective economies back on the straight and narrow will be tailored for individual circumstances. The G20 also pledged to keep economic stimulus in place, whilst sending a clear message to the market at the opportune time stimulus measures will be phased out.

To currencies and the Euro fell below the US$1.23 mark – At the time of writing the Euro is buying US$1.2280. In contrast, Sterling continued an upward trajectory currently trading near 8 week highs against the greenback at US$1.51.

Not really a spectacular night from the Aussie dollar which made a mild retreat, however able to remain buoyant above 87 US Cents for the majority of the session. At the time of writing the Aussie is buying 87.1 US cents. In the absence of local economic news we should be looking to local and Asian equity markets for some direction. Looking to the week ahead, locally we can expect more conjecture surround Prime Minister Gillard’s take on the mining tax which is likely to be a driver of both equities and the Aussie dollar.