By Greg Peel

The Dow closed up 33 points or 0.3% while the S&P added 0.2% to 1347 and the Nasdaq rose 0.1%.

How is your high school maths? Remember the asymptote? That was the curve that would approach an axis, getting closer and closer with each increment but never actually reaching the axis. The equation y = 1/x is the simplest example. The most complex example is the Greek government.

It had been expected by Wall Street that a resolution among the Greek political parties regarding the requisite austerity package would be announced last night. Why anyone expects anything out of Greece on a timetable is anyone's guess ? best to assume it's never going to happen and then be pleasantly surprised when it does. But Wall Street was confident, which is why the Dow dropped 63 points from the open when it didn't happen.

The drop only lasted half an hour before everyone simply turned around and went back the other way. This time, rather than simply regaining most of the loss, stock indices kept on going.

Papademos had announced at this point that a final draft of a resolution was being prepared and it would indeed be signed tomorrow. I believe him. Don't you? And Wall Street was also heartened at this time when Ben Bernanke warned in an address that the US economic outlook remained "uncertain".

Great news huh? Well it is if you consider that the recent US jobs report, which was taken as great news, killed off a lot of expectations for QE3, which is not good news. But Bernanke's comments implied QE3 was by no means on the back burner yet, which thus is good news ? twice.

Bernanke's warnings were actually aimed more squarely at the fiscal side of economic management and the ramifications of the Democrats and Republicans fighting in the sandpit and not sharing their toys. With a tenuous but fragile economic recovery underway, now is not the time to play petty party politics, election or no election, and for the sake of the nation it would be a good idea to call an armistice. I'm paraphrasing somewhat here, but you get the gist.

It has been the trend of late on Wall Street that any morning drop is followed by a grafting rally, suggesting the buyers are looking at any small pullback as another opportunity to load up. With the exception of jobs day, volumes remain light, but not so light compared to pre-2007 levels. The failure to reach resolution in Greece is frustrating yet still the world assumes it will happen one way or another. And don't forget there's still the issue of the bond restructuring. The Dow was actually up 58 late in the session so there was still some late selling in play.

Don't forget that a Greek resolution on these points does not close the book. It's just another step along a very long path of more of the same.

The euro pushed up steadily on news that a deal would be signed tonight and Wall Street basically follows the euro these days. It's now up over US$1.32 when a lot of people thought it would be more like US$1.22 by now, so short-squeezes are providing the currency with more upside than downside potential at this point. Look out if the shorts ultimately get it right. The US dollar index dropped sharply last night on the euro's rise, by 0.6% to 78.54.

The Aussie is duly up 0.7 of a cent to US$1.0798, aided by the RBA's lack of rate cut yesterday. The US dollar drop was enough to kick gold back up again, by US$25.40 to US$1747.80/oz. Both are all about Bernanke not ruling out QE3.

Aluminium jumped 1.5% and tin almost 3% but the other metals took the night off. It was a different situation for oil, with markets squirming after Iran weighed into the Syrian debate, ticking off India for supporting the UN against the Iranian ally. West Texas jumped US$1.80 to US$98.71/bbl as if it suddenly realised what was going on in the Middle East, while Brent rose only US42c to US$116.52/bbl, wondering where WTI had been.

Expectations of a Greek resolution are impacting on the US bond market as well, and hence the Treasury's three-year note auction last night met with a tepid response. The settlement yield of 0.347% was nevertheless still only just above the record low. The tens rose 7bps to 1.97%.

The SPI Overnight was up 4 points.

Westpac will release its local consumer confidence survey today while earnings results are due from BHP Billiton ((BHP)) and Boral ((BLD)) amongst others.