SCOREBOARD: Greek obsession?

Given the President's Day holiday in the US and New Year celebrations in other economies, overnight action was limited to say the least. Most of the news flow concerned that 0.5 per cent or less of the global economy that is Greece. The latest headlines cover EU calls for Greece to take tougher action on their budget and to provide further information regarding cross currency swaps (to determine whether these may have been used to blur their accounts). EU finance ministers are currently conducting a two-day meeting to discuss.

Despite lingering concerns over Greece (and Dubai again, representing about 0.1 per cent of the world economy), European equity markets themselves did quite well, the major indices up 0.2 per cent to 0.5 per cent on a combination of broker upgrades, positive earnings reports and US approval for BA and Iberia to expand their alliance with American Airlines.

I have to confess to being quite surprised by market action of late – I'd have thought markets would get more of a boost from recent GDP outcomes. Europe was lacklustre, but Japanese figures released yesterday were anything but (admittedly they have a tendency to be revised a lot). Taking stock, the world's biggest economies (bar Europe) have put in a solid effort in the fourth quarter. Results so far suggest US GDP was up 5.7 per cent, China up 10.7 per cent and Japanese growth was at 4.6 per cent. Together these guys account for 40 per cent of the global economy – trade has been a big feature of this growth for sure (not that that is a negative by the way) but it has also featured quite reasonable domestic demand. Growth in Europe cannot be far off.

Added to that, this earnings season hasn't been too bad either, with European companies generally beating expectations (56 per cent) and stocks on the S&P500 (well the 350 that have reported) beating analyst forecasts by 12 per cent on average. So you can focus on 0.5 per cent of the world if you want – and you would have done well short-term if you had. But I'm not sure that's going to make you money as a medium-term play.

It'll certainly be interesting to see what influence that 0.5 per cent of the world had on the RBA when we get the minutes today. We know their view on growth and inflation so I don't think they can add any more colour – the focus is really going to be on how close the decision was and, if they mention it, what the RBA's recommendation was to the board.

Nothing much else happened. FX was dead, with most rates unchanged from 1630 yesterday afternoon. AUD is at 0.8895, EUR is at 1.3600, GBP is at 1.5664 and yen at 89.98. On the debt side our futures ended marginally higher on very tight ranges. 3s are at 95.14 and 10s at 94.47. Otherwise bunds eased off, yields edging about 1bp higher on the 10-yr to 3.2 per cent. 10-yr bonds in Greece sold off, yields rising to 6.24 per cent from 6.14 per cent with Spain's 10-yr up to 4.02 per cent from 3.98 per cent. Finally on commodities, oil was down a little to $74 on Nymex, gold rose $8 to $1101 while base metals pushed higher.

Other than the RBA's minutes, we get an assistant RBA governor speaking at 12.45pm (on the evolving financial situation). NAB's January business survey is out prior at 11.30am while tonight we have a bunch of Fed speakers, TIC flows and the NAHB housing market index. In the UK watch out for CPI data while the Germans get the February ZEW survey.