By Greg Peel

The Dow closed up 99 points, or 0.7%, while the S&P gained 1.0% to 1511, with the Nasdaq rising 1.3%.

Yesterday's monetary policy statement from the RBA contained two separate comments which, if read together, go some way to explaining why the Aussie suddenly tanked at 2.30pm on an unchanged cash rate. They are: "Looking ahead, the peak in resource investment is approaching. As it does, there will be more scope for some other areas of demand to strengthen," and "The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand".

While it is well known any two given economists would struggle to agree on the colour of an orange, we do currently have a slightly unusual situation in that some economists believe the central bank will need to keep cutting its rate in 2013, but others believe the complete opposite, that the rate will be increased. This clearly has the money and forex markets a tad confused, which is why the Aussie tanked yesterday on "no change" when logically one would expect a move up. The above comments suggest the door is open for more cuts, not that the need to raise may soon be upon us. Data continue to indicate that the Australian economy as a whole is struggling.

This is certainly true if we use last week's woeful manufacturing PMI as a gauge. Yesterday saw the release of the services PMI, and while the rate of contraction did slow to 45.3 from 43.2, the sector is still contracting smartly. Of the suite of global service PMIs released yesterday, Australia's remains the weakest.

Even the eurozone has performed better. On Friday it was revealed the eurozone manufacturing sector has almost stopped contracting, and last night's services reading of 48.6, up from 47.8 in December, suggests a similar pattern. The UK services PMI swung into expansion in January in rising to 51.5 from 48.9, while China's official 56.2 (released on the weekend), up from 56.1, implies quite rapid expansion. HSBC backed up Beijing yesterday with a reading of 54.0, up from 51.7.

Only the US saw a lower number, with a drop to 55.2 from 55.7. But when the number is well over 50 then a little blip should not take away from otherwise healthy expansion. And let us not forget the US is very much a services economy (unlike China or Germany).

Hence a slight drop in PMI was not enough to dampen the enthusiasm on Wall Street last night -- enthusiasm which resonates with trading in the year to date but which represents a sharp contrast to Monday's session. On Monday, Europe said to Wall Street "I haven't gone away you know". Last night Wall Street turned inward once more, nevertheless, to absorb the excitement of a rather large LBO.

PC-maker Dell had a rough 2012, basically halving in value as Apple supposedly trampled all before it. Dell shares have bounced a bit in 2013 as Apple waivers, and following a solid earnings report, but with Dell paper yielding only 2.7% against a free cashflow yield (over share price) of 17% the company has decided to take itself private in a leveraged buyout deal worth US$24bn.

Wall Street loves an LBO. It implies there is more value in the market than prices are reflecting (rightly or wrongly). Will the Dell deal start a run of LBOs? That would be very bullish, at least until the barbarians arrive at the gate. Europe? Never heard of it.

The US dollar index is down a tad to 79.53 and gold is down a tad to US$1672.20/oz, while the Aussie has fallen 0.3% to US$1.0399, as noted.

The oils re-established their upward trend, with Brent rising US94c to US$116.53/bbl and West Texas up US43c to US$96.60/bbl. Base metals were slightly positive in general and iron ore was steady at US$154.20/t.

The SPI Overnight rose 20 points or 0.4%.

We'll see local Christmas retail sales numbers today while Primary Healthcare ((PRY)) and REA Group ((REA)) will provide the earnings report highlights.

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