By Greg Peel

The Dow rose 323 points or 2.2% while the S&P gained 2.2% to 1692 and the Nasdaq added 2.2%.

As I write, Boehner and Obama are about to meet (7.30am Sydney). Boehner will offer up a six-week temporary increase to the debt ceiling on the basis Obama will talk turkey on budget cuts. Obama has said he will talk turkey, but only if the government is reopened. And by the way, six weeks is not long enough.

Not exactly time to pop the corks yet, but Wall Street's not going to hang around waiting. Traders had begun to smell compromise in the air this last couple of days, which has basically meant the Republicans cracking under the weight of growing negative feedback. To the majority of Americans, including many Republican voters, the Republicans have been wearing the black hats. Boehner has tried to portray a defiantly unmoved president as the reason why America is shut down and a default is threatening. But America is not buying it.

Obama has forced the cracks by doing nothing. He is the president, and he was voted in as such less than a year ago. The Democrats in Congress point out that the president has remained unmoved on anything his own party has tried to throw up in terms of policy demands as well. That, in a sense, is its own compromise. This story is not over yet, and potentially not over for some time if both parties ultimately agree to extend their negotiations only after the government is reopened and the debt ceiling raised. They will likely, as they always do, "kick the can down the road".

That road, so far, is five years long. That's how long the US has been without a budget.

It was not the strongest day on Wall Street this year, but it was the second. Resolution is not guaranteed, so any disappointment emanating from this morning's meeting could just as well see the Dow back down 300 points tonight. But Wall Street is backing itself, and the political trend supports such a view.

The interesting thing is that all the negativity preceding last night's positivity has been played out in the stock market, and pretty much only the stock market. The US dollar index has barely moved throughout the whole charade and the US ten-year yield has remained as good as steady (albeit there was some fear built into a short-end yield spike). Commodity prices have moved around but not by much, and while gold has had its moments it really hasn't moved far either.

Last night gold dropped US$19.90 to US$1287.80/oz, wiping out any "safe haven" premium it may have been carrying. The US dollar index ticked down 0.2% to 80.46. The ten-year yield ticked up 4bps to 2.68%. The Aussie has been incrementally stronger these past couple of weeks but not at all skittish. It's up 0.2% to US$0.9463.

Base metals were mostly positive but inconsequential. The oils have been more volatile over the period but it's been more to do with storms and inventories and Middle East carry-on than anything else. Last night Brent leapt US$2.95 to US$111.90/bbl and West Texas rose US$1.28 to US$102.89/bbl but that was due to a reported drop in OPEC output in September and the kidnapping of the Libyan president.

We did see a 16% fall in the VIX back to 16, but that is stock market related. Everyone quickly dumped their put option protection.

The question now, on the assumption Boehner and Obama do reach some sort of temporary agreement this morning, is as to whether that means we have to do this all again in another six weeks, or whenever. But there would be an element of "cry wolf" if the Republicans had another go, so perhaps the "business as usual" sign can soon be nailed up. Then we can all get some sleep.

The SPI Overnight closed up 71 points or 1.4%.

Oh and spot iron ore, which pays no heed to Washington, rose US$1.20 to US$133.00/t.

Just a word on Bridge Street, and yesterday's local jobs data. Once again we had a mixed bag result of weak employment growth but a fall in the rate of unemployment on another tick down in the participation rate. Yet ANZ, for one, suggests there are signs of a flattening in labour market weakness, with other indicators also adding weight to the argument. ANZ has now moved out its expectation for the next rate cut to February from November. The bank's economists suggest the RBA cash rate will then remain "around its current level" through all of 2014.

The market is beginning to agree, with many now predicting we have seen the low point and the next move, when it comes, will be up. The barrier, nevertheless, is the Aussie, which is impertinently stronger again since the October policy meeting. It is not strong enough, however, to ensure a Cup Day cut.

Tonight we won't see US business inventory, retail sale and wholesale inflation data, but we will see Michigan Uni's fortnightly consumer sentiment gauge. Beijing will release China's October trade