A sense that the US economic rebound seems to be strengthening and the Chinese economy has survived its inflationary scare, look like helping the 'risk on' rally to continue on global markets.

For a couple of days last week, a flare up in concern over Greece seemed to threaten the rally, which has seen share and commodity markets rise strongly from last October.

But by the weekend that worried outlook had gone.

It was replaced by optimism as Greece has completed its bond swap; the US jobs market continued to amaze and surprise analysts with another 200,000 plus jobs created in February, for a third successive month and Chinese inflation fell sharply, while investment and industrial production eased, along with retail sales.

And then a big Chinese trade deficit for February came along on Saturday to confuse investors worried about China's economic health once again.

The US dollar had its strongest day in 11 months on Friday, but despite that, gold and oil made small gains on the day.

In Australia we survived the deluge of economic news last week, but we were left as confused about the health and direction of the economy as we were a week earlier.

Major central banks did nothing, indicating they are happy, for the time being with where their economies are heading.

For that reason don't look to any big news from the Fed meeting tomorrow night, our time, as the jobs report for February will have forced the central bank to start a rethink of its views on the economy.

But there can be no question that there is increased optimism about the economy, while scepticism remains almost as solid that the jobs boom can't last.

Friday's report from the US Labour Department report showed nonfarm payrolls increased 227,000 last month, while the jobless rate remained steady at the three-year low of 8.3% set in January.

That was despite 476,000 extra people returned to the labour force looking for work, the biggest gain for almost two years.

And, in a further encouragement, 61,000 more jobs were created in December and January than previously thought, which means both months, saw new jobs topping the 200,000 mark.

And the broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, dropped to a three-year low of 14.9%, which is a further bullish point.

The market got this news a few hours after it learned that China's consumer inflation rate fell to an annual 3.2% in February, from 4.5% in January.

Later in the day came news of the successful Greek bond swap, then a statement from the International Monetary Fund that it will vote this week on a 28 billion euro, four year loan for Greece (higher and longer than first thought) and European finance ministers are expected to approve the swap and payments to Greece tonight, our time.

The impact on the US dollar was dramatic: it jumped to an 11 month high of over 82 Yen, and nearly $US1.31 against the euro (which briefly fell under that level).

The Aussie dollar though eased and finished the week in New York around $US1.057.

The good news from Greece should see the euro firmer this week, especially if there's a 'yes' from the EU finance ministers' meeting tonight.

In the US, all this saw a strong start to trading Friday night in the US, although the gains faded towards the end.

The Dow Jones rose 14.08 points, or 0.1%, to 12,922.02, leaving it down 0.4% for the week.

The S&P 500 climbed 4.96 points, or 0.4%, to 1,370.87, up nearly 0.1% over the week and the Nasdaq Composite added 17.92 points, or 0.6%, to 2,988.34, for a weekly gain of 0.4%.

Friday saw an unlikely anniversary: Exactly three years ago, the S&P 500 posted a 12-year closing low of 676.53 during the depths of the GFC.

The index is up 102% since then, although it stalled last year before resuming a rally late in the year.

In Australia, the market will open flat today after big gains faded as well in share price futures trading overnight Friday.

The share price index contract ended up 3 points to 4219 in US trading.

On Friday, the ASX200 index rose 41 points, or 1% on Friday to end at 4212, while the All Ords added 38.3 points, or 0.9% to 4300.5.

Despite the rise, the market fell 1.4% last week as we remained off the pace in the global rebound.

Elsewhere in Asia on Friday, Japanese stocks had another solid day, rising strongly with the Nikkei up 1.7% for the day after the 2% gain on Thursday.

The Nikkei closed at 9,929.74, its highest close since August 1. Earlier Friday the index had briefly topped 10,000, also for the first time since August.

For the week, the MSCI Asia Pacific Index added 1.1% on Friday to cut the week's loss to around 1%.

The Index has risen 10% so far this year compared with an 8.7% advance by the S&P 500 and an 8% gain for the Stoxx 600 index in Europe.

Elsewhere in the region, Hong Kong's Hang Seng Index rose 0.9% to 21,086, South Korea's advanced 0.9% to 2,018.30 and Taiwan's Taiex climbed 0.4% to 8,016.01.

China's Shanghai Composite rose 0.8% to 2,439.46, after the good report on inflation in February.

For the week, the Hang Seng lost 2.2%, but Japan added 1.6% while the Shanghai market lost 0.9% as Friday's rise halved the weekly loss.

In Europe, the Stoxx 600 index fell 0.7% last week with indexes down in 15 of the 18 western European markets, thanks to those early nerves about Greece.

But Friday's announcement of the successful bond swap (and despite the country being posted as in default of varying kinds by the ratings agencies) should improve sentiment this week, especially if the EU finance ministers agree to start making payments to Greece.

Last week the UK's FTSE 100 lost 0.4% as did Paris' CAC 40.

Germany's Dax fell 0.6%, but the Greek market rose 0.4% (but there's not much activity).

Gold and oil futures ended higher on Friday night, our time, while soybeans jumped after Brazil 2011-12 crop size was downgraded a second time this year because of drought.

And the stronger US dollar didn't undermine commodity prices, especially gold and oil.

Crude-oil futures ended higher Friday in New York, notching a weekly gain as the good jobs data boosted the hopes of speculators that US demand for oil will rise.

Prices were also lifted late in the session by an Israeli air strike on Gaza, while the good inflation data from China stirred hopes the country may take measures to stimulate its economy.

In New York, Nymex crude-oil futures for April delivery rose 82c, or 0.8%, to end at $US107.40 a barrel.

That left prices for the week up 0.7%.

The market also mulled over the Organization of the Petroleum Exporting Countries (OPEC) monthly oil report which was released on Friday.

OPEC left its headline forecasts broadly unchanged from its previous report, as growing consumption in Asia again offset weaker demand in the Europe and the US.

OPEC said global oil demand will continue to grow by 900,000 barrels a day this year, while the world's need for crude will remain steady at around 30 billion barrels a day.

In London Brent oil for April settlement rose 54c or 0.4% on Friday, to $US125.98 a barrel.

New York gold futures rose again on Friday to a third straight session.

Comex gold for April delivery closed up $US12.80, or 0.8%, to $US1,711.50 an ounce in New York.

That left prices up a slim 0.1%% over the week.

Gold was higher in Asian trading, but dipped under $US1,700 an ounce, after the US February jobs report.

News of that Israeli air strike in Gaza sent the metal higher in late trading.

News of the Greek debt swap settlement came too late for the market, but should help prices today as traders see it as freeing the way for the Greek bailout to be completed.

That's misplaced optimism: as the US jobs report shows, the US economy is past the time for a third round of special spending.

Comex silver for May delivery ended 38c higher at $US34.21 an ounce.

But for the week, silver fell 1% after that 1.1% rise on Friday.

May copper added 7c, or 1.8%, to $US3.86 a pound on Comex in New York on Friday

Copper lost 1% for the week, but news of a surge in Chinese copper imports last month will boost sentiment today.

And the soybean market will get a boost from the solid level of Chinese imports last month after prices in Chicago hit a five month high on Friday night, our time, thanks to a cut in the size of Brazil's expected harvest.

The Brazilian government said farmers will harvest 68.7 million tonnes of beans in the crop year through August, less than the February estimate of 69.2 million tonnes.

Brazil is the second-largest grower of soybeans after the US and the biggest exporter.

The US Department of Agriculture joined the Brazilian government in forecasting a fall in the country's harvest.

In fact the USDA said the Brazilian crop would be the smallest for three years at 68.5 million tonnes, down 3.5 million tonnes from its earlier forecast.

Adding to the pressure on prices, the USDA said the drought had also cut the size of Argentina's crop (as many forecasters had predicted) to 46.5 million tonnes, down 1.5 million.

Argentina is the world's third major grower and exporter.

The growing realisation that the drought is causing problems in Brazil and Argentina has helped push world soybean prices up higher in the past six weeks.

The drought is being caused by the La Nina weather event that has brought heavy rain to eastern Australia in the past five months.

The USDA reckons China will import a record 55 million tonnes of beans this year and judging by the pace in January and especially February, the country's on track to meet that forecast.

Soybean prices closed at $US13.375 a bushel on the Chicago Board of Trade on Friday night, our time, down on the day, but up 18% since November (and 12% in 2012 so far).

Wheat prices are up 9% since reaching this year's low in mid January, after falling 18% in 2011.

Wheat futures for May delivery rose 1.3% to settle at $US6.43 a bushel in Chicago.

Copyright Australasian Investment Review.
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