By Greg Peel

The Dow closed up 70 points or 0.6% while the S&P gained 1.0% to 1365 and the Nasdaq added 1.2%.

It appears, some might say unfortunately, that Greece will not default on its sovereign debt. The "unfortunate" school would much rather deal with the potentially sharp but brief market volatility resulting from a default, and see a more rapid path out of trouble for Greece despite some serious short term pain. The deadline for the deal passed at 6am this morning Sydney time but the official result won't be announced until 11am. The news wires are reporting, however, that the final count looks like being well over the required 75% mark.

This speculation was enough to drive Wall Street higher once more, regaining more of the ground lost on Tuesday night when it was feared, among other things, that Greece would default. A big surge came just before 3pm New York when the wires claimed sufficient majority. The Dow was up 100 points but faded towards the bell.

Incidentally, one of the parties known to have rejected the Greek government's restructure deal is the Greek Ministry of Finance pension fund. Go figure.

Assuming the speculation to be correct, we can now stop worrying about Greece ? for the moment. There are very few commentators outside European officialdom, nevertheless, who do not expect Greece to default some time down the track regardless. There is also a strong belief Portugal will need a second bail-out, and maybe Spain will need a first. This is not over. This could still go on for many years.

ECB president Mario Draghi is very upbeat, however. In his press conference following the monthly ECB policy meeting, at which the cash rate was held steady at 1.0%, Draghi declared the recent LTRO an "unqualified success". He gave no hint there would be any further rate cuts, and no hint of further LTROs either. Assuming the printing is over for now, and assuming no Greek default, currency traders pushed the euro up 1%. The US dollar index fell 0.75% to 79.14.

Which is a tad ironic, given the US economy appears to be improving quite nicely while the European economy is destined for recession. But that's the sort of upside down world we've been living in since the GFC. The Aussie, incidentally, is up 0.7% to US$1.0653 despite yesterday's weaker unemployment result that has some talking rate cut again. Something tells me the RBA will not be all that concerned about a tick up to 5.2% from 5.1% in a global context, particularly when resources exports continue to power ahead. But there are likely yet a lot more job losses to come.

Speaking of unemployment, Wall Street is hoping for a good result on its February numbers tonight which has likely added to last night's positivity.

Assumptions of Greek success have brought things somewhat back to a level of recent normalcy. The US ten-year bond yield is now back at just over 2%, the VIX has fallen back to 18, and US dollar weakness helped gold rally US$19.30 last night to be back over US$1700/oz. Oil rose again, up US$1.13 to US$125.53/bbl for Brent and US59c to US$1.06.75/bbl for West Texas.

It appears commodity funds are still staying away from the base metals markets nevertheless, having been jerked around a lot this year. Last night's trade saw tin up 3% and zinc and lead up 2% but nickel down 1.5% with copper and aluminium more steady.

The SPI Overnight rose 33 points or 0.8%.

Today sees the January trade balance result in Australia and Germany and the US will follow suit tonight. The US jobs numbers will hog the spotlight of course but ahead of that we have today's monthly data dump from China, featuring inflation, retail sales and industrial production data.

Rudi will host the Friday Round Table on the BRR network this afternoon at 3pm.

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