Good morning. Continued concerns in Europe over debt and austerity measures led to heightened volatility in the equity and currency markets on Tuesday. With the French CAC outperforming London and Germany, traders reassessed their portfolio weightings in light of the Irish debt crisis. Irish Finance Minister delivered a key budgetary speech on Tuesday, highlighting the recent conditions and how the government would reduce spending in accordance with emergency funding provisions. Some of the key provisions for change included the introduction of an excise on major fuel sources (ie diesel and petrol) and the restructuring of the banking system. Key sceptics have labelled the economy as a long term ongoing concern. In the US, Republicans and the Government agreed to fulfil previous administration taxation obligations. This boosted market sentiment with traders speculating over an acceleration in economic growth.

On the equity market front, the Dow Jones was 35 points higher late in trade. The US government announced the sale of $2.4 billion of Citigroup shares on Tuesday with the stock reacting well to the news, with a 4% rise.

On the currency front, Traders pushed the yen into a range on Tuesday with the currency pair feeling the effects of market comments from Japan’s Finance Minister. Highlighting the ongoing problem of a stronger yen, the official was reluctant to confirm whether further intervention steps would be required. The Aussie dollar rose considerably against the greenback in the afternoon session on Tuesday. Trading at 0.9956, risk appetite and a bounce in commodity pricing helped the AUDUSD. RBA Governor Glenn Stevens announced that the central bank would be leaving rates on hold. This fell in line with traders and analysts forecasts. Sitting at 4.75% the benchmark rate is expected to be stable for the next 6 months, with economists highlighting the limited inflationary pressures. Chinese CPI data is released on Monday, with analysts eagerly awaiting the figures.