By Greg Peel

The Dow closed up 5 points while the S&P rose 0.2% to 1349 and the Nasdaq gained 0.4%.

We recall that while the private sector holders of Greek sovereign debt ? mostly European banks ? have agreed to take a haircut on their holdings via a debt restructure in which they will receive longer dated bonds in return, there have been a couple of stumbling blocks. The first was the interest rate ? the Greeks wanted no more than 3% and the holders no less than 4% and somewhere they've agreed to meet in the middle ? and the other was with regard to the ECB.

The ECB, too, is a big holder of Greek debt. Not because it wants to be a big holder ? heaven forbid ? but because it has been forced to buy Greek and other distressed paper across the eurozone in order to stave off an inevitable collapse of the euro, the European banking system and, quite frankly, the world. The ECB has saved the European banks, although it must always be remembered the ECB cajoled the European banks into buying eurozone sovereign debt in the first place, pre-crisis.

So the private sector holders of Greek debt have insisted that if they have to take a haircut (a loss on their investment) so too does the ECB. Illogical? Petulant? Juvenile? Well we are talking about Europe. Having initially scoffed at the suggestion, last night the ECB, no doubt seeing that eleventh hour approaching yet again and realising it may have no choice, agreed to take a haircut on its Greek bonds. The restructure will be such that the ECB won't actually be out of pocket, but it will never profit in the longer term from holding Greek debt that appreciates in value (if ever Greece actually does avoid eventual default) and thus replenish the central bank coffers.

This was the news that had Wall Street a little higher from the open, until the inevitable happened. It had been talked about, it had been speculated on, and now it's started. On news of the ECB back-down, Ireland came out and said well we expect the same thank you. No doubt Portugal is preparing its demands as we speak, and on down the line we'll go. On the news, the Dow fell to be down 60 points.

Then the news hit the wires that the EU finance ministers have been summoned to Brussels for a meeting tonight. The purpose of that meeting, it would seem, is to ratify a draft of the new package of strict austerity measures the troika is imposing on Greece in exchange for its 2012 bail-out funds. On that news, the Dow turned around and ran back to the flatline. The austerity package has been the other issue holding up any resolution.

But the Greek opposition parties are yet to agree to this package. Are the EU finance ministers going to rubber stamp the deal without Greek agreement? Will Greek agreement be reached? The package includes measures such as the loss of 150,000 public sector jobs and a 20% reduction to the minimum wage (currently US$12,000pa). Will the Greeks go for that? Perhaps we should ask the Romanians.

One can only laugh in order to avoid crying. You couldn't write this stuff.

The euro also went down and up on the night's proceedings and finished where it started, leaving the US dollar index little changed at 78.59 and the Aussie little changed at US$1.0791. Having run up on QE3 talk on Tuesday night, gold slipped back again by US$14.20 to US$1733.60/oz last night. Gold doesn't know what to think either.

Base metals were also little changed in London but the US oil market is becoming almost as silly as a European negotiation. Americans remain fixated on West Texas Intermediate as the "price of oil" despite the fact the only people who can buy WTI are the midwest refiners, who then pass on products at Brent prices. Slightly lower weekly inventories in the US had WTI rising US53c to US$98.94/bbl, while the real oil price rose another US$1.21 to US$117.73/bbl. If WTI ever went to 117, economists would be calling the US economic recovery derailed. Yet the price of Louisiana Light ? the US oil that can actually be transported ? hit US$116.52/bbl last night.

Last night's US Treasury auction of ten-year notes was a little better supported than the previous night's three-year auction, but nothing special. The ten-year yield is steady at 1.98%.

The SPI Overnight rose 2 points.

China will release its monthly inflation data today while tonight the ECB and Bank of England will both make monetary policy decisions tonight.

Rio Tinto ((RIO)) and Telstra ((TLS)) will report earnings today among a group which also includes News Corp ((NWS)).

Rudi will appear on Sky Business at noon and again after 7pm on Switzer TV.

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