By Greg Peel

The Dow rose 87 points, or 0.6%, while the S&P gained 0.5% to 1625 and the Nasdaq added 0.1%

Try this on for size. In March, Australia's manufacturing PMI was 44.4, services PMI 49.6 and construction PMI 39.0. Take a simple average, and that's 44.3. In April those numbers fell to 36.7, 44.1 and 35.2, for an average of 38.7. The eurozone composite PMI in April was 46.9.

Now I doubt the eurozone composite is a simple average ? it's likely weighted to industry size ? but you get the picture. The Australian economy is slowing a helluva lot faster than the basket case European economy, but for resources. On the resources front, March's trade balance featured a surprise return to surplus after more than a year on better than expected iron ore exports to China. Yet economists are expecting the rate of growth of Chinese demand to slow, while Australian iron ore supply is increasing.

What does this all add up to? Yesterday's rate cut. The sectors of the Australian economy which are suffering as a result of the strong currency far outweigh those that are benefiting. The failure of the Aussie dollar to fall on lower rates and weaker commodity prices is "unusual", the RBA noted yesterday. Another rate cut is thus not the magic bullet, but it should provide some assistance to struggling industries. The central bank seems convinced rate cuts to date are having an effect. Outside of rising asset prices, it's hard to see where. See: April PMIs.

Last night the 30-stock Dow Jones Industrial Average closed above 15,000 for the first time in history. The Dow is more historical curiosity than viable index these days but psychologically it retains a certain gravitas. When Dow Jones, the media company, reported the jump to 15k this morning the first factor cited was the cut in the RBA cash rate.

At 2.75%, Australia's cash rate is now at a 50-year low, and lower than the "emergency" GFC rate of 3.00%. But the absolute level is misleading. In global cash rate differential terms, to the likes of the US, Japan and Europe, bearing in mind that money printing effectively means negative cash rates (not just zero), the RBA needed to close the gap. That differential is why the Aussie has not fallen. How far can the RBA go, given it only used "some" of its scope yesterday? Well that will depend on both CPI and asset inflation.

By the way, the German stock index hit a new all-time high last night. The ASX 200 still has 33% to go.

The RBA cash rate was news on Wall Street if for no other reason than there wasn't much news. The Street is simply back in buy mode. What is notable is the beginnings of a switch from defensives into cyclicals, such as materials, and if sustainable such a switch would signal a "second leg" of the bull market. But these switches have been swiftly derailed before, including during 2013. The ASX 200 finished a bit lower yesterday, but materials rose 2% and energy and consumer discretionary 1%, while consumer staples fell 2% and banks and telcos 1%. Same switch.

If we are truly moving to "risk on", gold loses its lustre. It fell US$17.90 to US$1452.00/oz last night despite little movement in the US dollar index. April exchange data were released to show the mass exodus from gold ETFs is ongoing, with April a record month for withdrawals.

The Aussie has behaved itself to some extent, falling 0.7% to US$1.0187. But can it stay down?

The LME reopened for business last night and after rocketing on Friday night on the US jobs numbers, base metal prices drifted off a tad. The oil markets are still warily watching the Middle East but news that Saudi Arabia increased its oil output by 2% in April had Brent falling US94c to US$104.40/bbl and West Texas down US74c to US$95.42/bbl.

Spot iron ore arrested its recent slide in rising US$1.90 to US$130.00/t.

The SPI Overnight rose 24 points, or 0.5%.

Following on from Australia's March trade balance release yesterday, featuring increased exports to China, China will today release its April trade balance, and Bridge Street will be keeping an eye on the import numbers.