A surprisingly robust night of economic feedback continued to be overshadowed overnight with Greece's political woes remaining the key market directive. It's clear this is not just about a Greek exit - it's the dangerous precedent it sets for other struggling Euro-Zone nations. Final efforts to form a unity government have failed leaving little option for voters to return to the polls next month. Global indices continued their south-bound trajectory with market participants gearing up for another month of conjecture over the future of Greece and the possible repercussions of a Euro-Zone exit.
Preliminary GDP data from Germany showed a decidedly stronger than expected print with growth in the Euro-zone also outpacing expectations. U.S consumer prices were unchanged in April to match analyst's estimates and annual growth expectations of 2.3 percent. Core inflation which strips out the volatile food and energy components also rose 2.3 percent on year - in line with estimates. Retail Sales data was also in line with estimates to record 0.1 percent growth in April down from a previous 0.7 percent. We also saw encouraging data from the NY Empire manufacturing index which surged to a level of 17.09 outpacing economists' expectations in what could be seen as a positive precursor to the closely watched Philadelphia Fed index due later in the week.
The usually resilient Euro continued its downward rout with the EURUSD pair breaking the $US1.28 handle for the first time since January 18. The US dollar index which measures the value of the greenback against six major counterparts record breaking run to record 12 consecutive days of gains - its highest level since mid January.
Brief periods of upside momentum for the Aussie overnight were contained slightly above US dollar parity with previous supportive areas now acting a resistance. For now we're seeing a barrier slightly above the 99 US cent region, however we anticipate a further leg-down with 98.5 the next short-term target. Local data on the docket today includes the Westpac Consumer Confidence Index for May and the 1Q Wage Cost Index. At the time of writing the Australian dollar is buying 99.4 US cents.