By Greg Peel

The Dow rose 72 points or 0.6% while the S&P gained 0.7% to 1351 and the Nasdaq added 1.0%.

On Friday Wall Street knew nothing more than the fact the EU ministers had rejected the budget cut measures offered up by the Greek parliamentary representatives, which were in turn a tweaked version of what the troika was insisting on in the first place. Since Friday those measures have been re-tweaked, accepted by the EU ministers and passed through the Greek parliament.

Tomorrow night the EU ministers will again meet to decide whether or not Greece is eligible for its 2012 bail-out funds. Presumably there cannot be further issue with the budget cut measures, but we forget that the other side of this default prevention package is the restructuring of existing Greek debt and the participation of the private sector holders in voluntary haircuts. The Greek vote has taken attention away from that aspect of the bail-out green light. Has that all been bedded down now? Or will current relief give way to frustration and risk-off once more?

Part of the hold-up there relates to private sector insistence the ECB also take a haircut on its own holdings, and as such a reluctant ECB has agreed to some adjustment to the value of its portfolio. Details are a little vague at this point and it is not yet clear whether or not the private sector holders are now satisfied, such that the bail-out can proceed. What we do know is that as soon as the ECB suggested it would take some haircut on its Greek bonds if it had to, Ireland piped up and said "me too". Portugal can't be far behind.

Basically we're not out of he woods yet, and these woods are really only one copse in the wider forest of whether Greece can actually manage to survive in the months and years to come. That feeling appears to have been reflected in last night's trade. The Dow closed down 86 points on Friday night and at around 3pm New York last night peaked at 86 points up, only to find some selling to the close. Not only has the Greek vote not incited a relief rally of any great strength, we are net down from Thursday.

The other financial markets tell a more realistic tale. The euro fell sharply on Friday but after initially trying to rally last night it fell away to be little changed on the session. The US dollar index , which shot up 0.7% on Friday, is only off slightly at 78.98. Gold was down a bit on Friday and is up US$2.80 to US$1723.90/oz so the only currency of note achieving any sort of risk-on reversal is the Aussie, which is 0.7 of a cent higher at US$1.0740 having fallen 1.2 cents on Friday.

Base metals saw falls on between 2-4% on Friday yet last night actually finished a little lower still, with aluminium leading the charge at down 1.5%. The exuberance of previous weeks has given way to unease forcing nervous day-traders to the sidelines for now, according to commentary from the floor of the LME.

After falling over a dollar on Friday, West Texas crude surged back with a US$2.09 gain to US$100.76/bbl. Aside from the Greek vote, oil was responding to the bombing overnight of Israeli embassies in New Delhi and Tbilisi which Israel has blamed on Iran. Brent crude, however, fell over a dollar on Friday but is only up US27c to US$117.58/bbl.

The US ten-year bond rate fell 8 basis points on Friday and has recovered only 2bps to 1.99%.

All this adds up to a market which remains cautious at this stage. Perhaps if and when we see the photo on the news of troika officials handing over one of those big novelty cheques to Lucas Papademos with smiles and handshakes all round will investors be more confident to play risk-on. We must recall that Wall Street has posted a substantial rally from the depths of late last year all the while assuming Greece would not be allowed to default. Really it's a case of: where to now?

The local market appears upbeat, nevertheless. The ASX 200 rallied 0.9% largely on the Greek news yesterday yet Wall Street is net down in the interim. This might suggest some caution in local trade today but the SPI Overnight is down only 2 points.

NAB will publish its monthly business survey today while earnings season highlights will include Paladin ((PDN)), SAI Global ((SAI)) and Western Areas ((WSA)). Tonight the US will learn January retail sales in a busy week of data.

Please ladies, no more mail.

All