By Greg Peel

The Dow closed up 21 points or 0.2% while the S&P gained 0.2% to 1394 and the Nasdaq added a more confident 0.7%.

While Friday's better then expected US jobs report provided some comfort for Wall Street on Friday, the surge in the "risk on" trade across the globe in the session came down to growing expectation that Spain will approach the troika for a bail-out, thus triggering a response from the ECB. There is also lingering talk about the EFSF being leveraged to provide more fire power, but to date Germany seems staunch in its opposition to such a move.

There was little in the way of new news out of Europe over the weekend, there were no US data releases of note last night and the US earnings season is tailing off. Wall Street's positive attitude carried over from the bell to the point the Dow was up 91 points from early on and remained elevated until right at the death. The average nevertheless closed to the upside after a long succession of negative Mondays.

European markets were also stronger, with both the German and French indices rising another 0.8%. The Spanish stock market jumped a further 4.4% as bond yields again fell. The Spanish ten-year yield dropped another 10bps to 6.71% (and the Italian equivalent fell 7bps to 5.98%) but another full 50bps was wiped off the Spanish two-year, taking its yield down to 3.40% or over 100 basis points lower than where it was on Thursday.

The movements reflect the sort of upside-down world we've come to live in since the GFC: that Spain should need a bail-out is positive. The issue now, however, is as to just when Spain might approach the troika if indeed that is the case. Spain has indicated it wants to be sure of the details of any bond-buying plan the ECB intends to implement, and that indication alone has been enough for markets to make the assumption Spain is about to move. Presumably Spain would like to avoid the issue of the ECB's purchases outranking existing bondholders on the seniority scale, as became a point of contention in Greece.

There is also the matter of what austerity measures will be placed on Spain as a condition of the bail-out, on top of measures already being implemented, which may not seem too attractive. While Spain's bond yields have risen to levels considered unsustainable from the point of view of the country's ability to fund its budget deficit, commentators suggest Spain could still hang on for a while yet ? possibly some months. And the irony is of course that as the market buys back Spanish bonds and sends yields lower, the immediate risk is ameliorated.

So here we are again, not knowing what might actually happen next. That's the negative. The positive is that we know both the Fed and the ECB are ready to move if necessary. For a while now we've been able to rely on what the market has dubbed the "Bernanke put" and now it seems we have a "Draghi put" as well. One thing we do know is that nothing ever seems to happen expediently in Europe.

The euro pushed a little higher again last night, sending the US dollar index down 0.1% to 82.26. The Aussie traded above 106 yesterday but has settled back to be all but square from Friday night at US$1.0569. Gold has risen another US$7.30 to US$1610.60/oz.

Base metals prices were mostly positive on small moves, with a 1% rise in aluminium the most extensive. Brent crude rose US61c to US$109.55/bbl and West Texas US70c to US$92.10/bbl.

The SPI Overnight gained 12 points or 0.3%.

The RBA will release a policy statement today and no change in the cash rate is expected on economist consensus. On the local earnings front, results highlights will include those from Bradken ((BKN)), Cochlear ((COH)), Leighton ((LEI)) and Transurban ((TCL)), while Incitec Pivot ((IPL)) will provide an investor briefing.

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