\n\tBy Greg Peel<\/p>\n
\n\tAs I write the meeting of eurozone<\/span> finance ministers is continuing in Brussels. The purpose of the meeting is to assess the austerity package agreed to by the Greek government in return for the granting of another E130bn<\/span> in bail-out funds to carry Greece through 2012, to be delivered in gradual tranches<\/span>. There will also be consideration of Greece's commitment to the package as a result of a new government being formed in April – an almost certain outcome.<\/p>\n \n\tThe meeting began at 3.30pm local time so could still continue for a while yet, and the ministers have not at this stage scheduled a press conference. Talk is that perhaps an announcement won't be made until tonight (Sydney time) which would be consistent with Europe's frustrating pace of decision-making, yet markets do not appear concerned that any such delay this time indicates trouble. On the contrary, the mood is upbeat. Germany is particularly confident of a positive result, and if Germany is confident then everyone should be confident, one presumes.<\/p>\n \n\tThe ECB is also confident, it would seem. Data released last night showed the central bank had halted its European sovereign bond buying program – the closest thing the eurozone<\/span> has to QE – last week. The ECB has quietly been easing off on its purchasing program since late last year as yields on the once distressed sovereigns have drifted back to less confronting levels. If the ECB is confident then everyone should be confident, one presumes.<\/p>\n \n\tWall Street was closed last night for the Presidents Day holiday leaving only European markets to provide some flavour last night. The London stock market rose 0.7%, France 1.0% and Germany 1.5%. Aside from confidence regarding Greece, European markets were catching up on Beijing's move to cut its bank reserve requirement ratio by 50 basis points – a move that had the local market feeling bullish yesterday.<\/p>\n \n\tEconomists had been expecting Beijing to make a further cut to its RRR earlier this year after its first cut in three years was implemented in November. So this cut was arguably overdue, although it does allay market fears that were generated recently when China saw a slight tick-up in its monthly CPI. Chinese inflation had begun to trend down from its peak last year thus signalling the end to monetary policy tightening from Beijing and the beginning of the opposite in response to the global impact of recession in Europe. Given Beijing's RRR increases over the past three years have been usually 25 basis points worth, this 50 point cut is somewhat of a double, and thus it confirms Beijing is not suddenly again worried by inflation.<\/p>\n \n\tOutside of Greek and Chinese issues, Iran is centre of attention following yesterday's announcement by Tehran it was halting oil exports to Britain and France in retaliation for sanctions placed on Iran due to its nuclear program. Tehran has since said it is ready to extend the export halt to other European nations. The halt is nevertheless of minimal impact given sanctions include a British and French ban on receiving oil shipments form Iran. Europe had already made arrangements with regards to supplementary supply.<\/p>\n \n\tThere is no doubting the building geopolitical tension nevertheless, and that has been reflected in the gradual creep of oil prices over the past month. Last night Brent crude rose another US60c to US$120.10\/bbl.<\/p>\n \n\tThe euro was stronger overnight as confidence builds, sending the US dollar index down 0.4% to 78.99. Gold responded with a US$9.80 rise to US$1734.10\/oz – Iranian tensions no doubt not lost on the gold market – while the Aussie is up 0.3% from Friday to US$1.0752.<\/p>\n \n\tBase metals in London were all up around 1% with the exception of tin, which went the other way.<\/p>\n \n\tThe SPI Overnight is up 2 points, with the news from Beijing already accounted for in yesterday's trade.<\/p>\n \n\tNow we wait for news from Brussels.<\/p>\n \n\tThere is a stack of local earnings reports out today, and we'll also see the minutes of the last RBA meeting.<\/p>\n