By Greg Peel

The Dow closed down 17 points or 0.1% while the S&P was little changed at 1344 and the Nasdaq fell 0.1%.

The government of Romania collapsed last night, joining the ever growing list of European governments which have not survived since the GFC and its aftermath. Romania is not a member of the eurozone but is a member of the EU and in 2009 it received a bail-out package from the EU-IMF of E20bn which came with the caveat of ? you guessed it ? strict austerity measures. The people of Romania were not very pleased with those austerity measures, and so the people have spoken.

Just what the Romanian opposition can do any differently when it forms a new government is anyone's guess. That topic of discussion is no doubt high on the agenda in neighbouring Greece where talks between the government and opposition parties on the implementation of strict austerity measures required by the ECB-EU-IMF in exchange for the E140bn 2012 bail-out package are holding up proceedings. Considering that the requirements include the cutting of 50,000 public sector jobs, among a host of other measures, it's not hard to see where the opposition parties feel they can gain some political leverage by playing hard ball. But again the question must be asked: without the bail-out package (which means default), what could an opposition government offer that's any more rosy as an immediate future?

The talks, apparently, are "close" to resolution. Obviously the word "close" is not derived from the Greek because the Greeks seem to have a very different interpretation. On Papademos's basis, Christmas is "close". And we now have two elements to the prevention of a Greek default next month. This austerity wrangle is a separate issue to the ongoing debt restructuring debate of which a resolution has been "close" for weeks and weeks. And all the while global financial markets wake up each morning with more grey hairs.

Yet there remains a pervading sense across markets that both issues will be resolved one way or the other. Despite a growing chorus of "For God's sake just let them default," the assumption is the EU will simply not let a default transpire even if "close" takes us all the way to the eleventh hour in March. Let's face it ? after three years of this rubbish we know all too well this is the way things are done in Europe.

Last night's trade on Wall Street had a familiar pattern, now that the US job boost is out of the way. On news of the new problem in Greece, the Dow was down 70 points from the open. With no data releases to consider nor major earnings results, Wall Street again grafted back quietly from the open to recover most of the initial fall, tracking the euro which was doing much the same. Volume was back to light and yelling was kept to a minimum in deference to Super Bowl hangovers. It had been, after all, a win for the locals.

The US dollar index still finished slightly higher on the day at 79.00 while the Aussie has slipped back around half a cent since Friday to US$1.0731, reflecting Greek worries and yesterday's weak local retail sales data which adds fuel to today's rate cut expectation fire. After Friday's big fall, gold slipped another US$4.20 to US$1722.40/oz.

Having shot up on Friday night, base metals suffered from a bit of sobriety last night. Aluminium, copper, lead and zinc trimmed gains while nickel and tin were 1% higher. Greek concerns were cited, and the same applied to West Texas crude which fell US69c to US$97.15/bbl. It was a different story for Brent however.

While the US has enjoyed its mildest winter in decades, Europe is now freezing its proverbials off. This clearly has an impact on demand for oil products but at the same time newspapers carried stories over the weekend of aggressive anti-Israel commentary from the Iranian Ayatollah. Who actually runs Iran? No one knows. Why US oil markets don't see such commentary as concerning is also somewhat strange, but suffice to say the US$1.51 rise in Brent overnight to US$116.10/bbl is putting oil ? via the "real" oil price ? back in the frame as an economic growth dampener once more. The Brent-WTI spread has blown back out to US$19.

The big US bond sell-off post the jobs news was also reversed somewhat last night, with the ten-year yield falling 5bps to 1.90%. The VIX ticked up a little but is still on a 17 big figure.

Rate cut coming from the RBA today? The SPI Overnight is up 15 points or 0.3%.

Ahead of the RBA meeting today we'll see a raft of local earnings results including Cochlear's ((COH)) interim along with quarterly updates from National Bank ((NAB)) and Macquarie Group ((MQG)).

All