Markets react positively to progress in Europe

The world's financial markets have reacted positively to progress in Europe.

Business correspondent Roger Kerr says hard line German Chancellor Angela Merkel has been rolled by France, Italy and Spain.

Along with that some belated European financial leadership has buoyed the markets - oil and gold prices have surged, and the New Zealand and Australian dollars are up.

Mr Kerr says that's a big thumbs up from investors.

"Maybe the markets have overreacted to Chancellor Merkel's concessions. So a relief tonic for the markets but you have to say the economic issues and the debt issues in Europe are far from being resolved."

BT Funds Head of Equities Paul Harrison is expecting a strengthening of the dollar today.

He says New Zealand and Australia tend to be linked to the risk on-trade and he's expecting the Kiwi to drift up.

Mr Harrison says the Euro bank bailout is a significant move and took the market by surprise.