A succession of negative themes continued to weigh on risk assets on Friday with a global push for safety providing upside for the Japanese Yen and US dollar. Greece's political woes remained a primary stumbling block with key political parities still failing to form a coalition government while Spain's economic problems continue to bubble away in the background. Spain announced banks will be required to hold additional capital to the tune of 30-billion euro's and undergo a stringent auditing process in an effort to guard against a full-scale banking crisis.

Meanwhile, China has taken further policy easing measures over the weekend, announcing a 50bps cut to banks' reserve requirement ratios to thwart what many expect to be a sharper than anticipated slowdown in the region. Data out of China on Friday failed to allay investor concerns of hard landing from the words second largest economy, prompting the central bank to cut reserve requirements for the third time in six months. Although we've seen a moderate in consumer prices, official industrial production data show a steeper than anticipated slowed down in growth. On balance we've seen data out of the region fail to inspire market participants with lasts week's trade data also highlighting a slow-down in domestic demand.

U.S indices finished with moderate losses headed up by banking stocks as negativity surrounding JP Morgan's $US2 billion trading losses took its toll. Further pessimism across the Atlantic also promoted losses despite strong than expected economic data. Consumer confidence data from the University of Michigan outpaced economists' estimates on Friday with the index rising to 77.8 in May against expectations of a moderate fall to from 76.4 to 76. Producer prices rose at an annual pace of 1.9 percent in April recording a greater than expected drop from the March reading of 2.8 percent.

The Australian dollar continued its downward trajectory but managed to remain afloat above the key technical and physiological milestone of US dollar parity. From a technical perspective, the latest bout of weakness from the Australian dollar coincides with the relative strength index touching the '30' levels. Technical analysts believe a reading of '70' or above suggests a reversal to the downside while a reading of '30' and below shows oversold signals. Although technical's may suggest the Australian dollar is oversold, it's clear the local units fortunes are at the mercy of continued feedback from abroad and indeed stimulus expectations in the United States.

Locally, key to the Australian dollar's near-term fortunes in the week ahead will be the release of the RBA monetary policy minutes for May. Traders will be watching for any clearer guidance the RBA may take further policy easing measures. Stevens and Co made the largely unexpected move to cut by 50bps, bringing the official cash rate down to 3.75 percent to represent the largest single cut since the height of the financial crisis. The ensuing statement offered little indication the move was the start of a series of cuts suggesting further surveillance of economic conditions is required to ascertain the viability of further easing. In short, weaker than expected growth coupled with subdued inflationary pressures has afforded the RBA with the scope to ease monetary policy.

The Economic Week Ahead - Australia

Monday - May 14th - Deputy RBA Governor Phillip Lowe speech - Devlopments in the Mining and Non-mining Economies | Home Loan Activity (MAY) | Investment Lending (MAY) | Value of Loans (MAY)

Tuesday - May 15th  - RBA Policity meeting minutes (MAY) | New Vehicle Sales (APR)

Wednesday - May 16th - Westpac Consumer Confidence (MAY) | Wage Cost Index (1Q)

Thursday - May 17th - Consumer Inflation Expectations (MAY) | Average Weekly Wages (FEB) | RBA FX Transactions (APR)

Global Top Tier Data

Tuesday - May 15th - Euro-Zone Gross Domestic Product (1Q) | German Gross Domestic Product (1Q) | German Zew Survey (MAY) | US Consumer Price Index (APR) | US Retail Sales (APR)

Wednesday - May 16th - UK Employment Data (APR) | BoE Inflation Report | Euro-Zone Consumer Price Index (APR) | US FOMC Minutes    (MAY) | Japan Gross Domestic Product (1Q)

Friday - May 18th - German PPI (APR) | Canadian Consumer Price Index (APR)