By Greg Peel

The Dow closed up 51 points or 0.4% while the S&P gained 0.5% to 1401 and the Nasdaq added 0.9%.

Last night's session on Wall Street proved a repeat performance of Monday night's session. Indices rose to a peak in the early afternoon, but by the closing bell had lost ground for a lesser net gain. On Monday the Dow was up 97 points before closing up 21, and last night the Dow was up 98 points before closing up 51. There was no new news or data releases of note.

It's not the stuff of bull markets, but may be the stuff of growing confidence in the shadow of the two influential central banks and their "I've got your back" promises. We must remember nevertheless that volumes are uninspiring and that many traders are on the beach while the computers fill in. Investors remain largely unconvinced, being by now about four times bitten and five times shy.

All the build up to the August meetings of the Fed and ECB has now shifted to a build up to the September meetings, at which, many traders are convinced, the Fed will announce further measures (if not naked QE3) and the ECB will announce a plan for sovereign bond buying. The latter is quite possible but as each day goes past, the need for the Fed to act diminishes. All of QE1, QE2 and Operation Twist were announced as Wall Street was threatening to collapse. If we keep going the way we're going without any fresh catalyst, Wall Street will hit a four and a half year high shortly while still expecting Bernanke to hit the emergency button.

Last night the broad market S&P 500 closed at 1401, having peaked at 1407 intraday. For the tea leaf readers, 1405 is a level of technical significance and if broken, they suggest the index should test 1419 ? the May high. This building confidence is comforting, but not so comforting is the nagging feeling a new high is not all that justified. Mind you, one can never identify a bull market until one is already in one. I'd like to think we're in one, but I'll reserve my judgment for now, for September, and for the end of the year when the US has to sort out its fiscal cliff.

Punxutawney Phil will point out that the play book says rally to April, sell in May, bottom out in September and then rally to April on a fresh dose of stimulus. This year we've rallied to April, sold in May, but turned around about three months too early with a rally from June, in anticipation there will be more stimulus as usual. It's all a bit Pavlovian. But just to get the saliva flowing a little more, last night the Boston Fed president and pending FOMC member Eric Rosengren declared his support for "open-ended" QE in a television interview, adding to a growing clique of bond purchase supporters within the FOMC. The clique is not happy with a merely sluggish US economy.

And last night a spokesperson for Angela Merkel voiced support for an ECB bond-buying program. The German politicians may be keen but the German central bank ? the Bundesbank ? is not.

On the subject of central banks, the RBA shocked no one yesterday in leaving its cash rate unchanged at 3.5%. The critical text in yesterday's statement was this bit:

"As a result of the sequence of earlier decisions, monetary policy is easier than it was for most of 2011, with interest rates for borrowers a little below their medium-term averages. While it is too soon to see the full impact of those changes, dwelling prices have firmed a little over the past couple of months, and business credit has over the past six months recorded its strongest growth for several years."

Futures markets are still pricing in two more cuts for 2012, but on the strength of the statement we might be hard pressed to see a September cut ? barring some offshore disaster ? given August is "too soon to see the full impact" of the 75bps cuts this year. June quarter GDP data will be released after the September meeting. And then there's the consideration of what the Fed/ECB might do.

The euro took a breather last night, leaving the US dollar index unchanged at 82.27. The major European stock indices still added another half a percent or more. The Aussie has eased off a little to US$1.0554. Gold is steady at US$1611.90/oz.

Commodities are nevertheless in the swing with stocks. Base metals rose 1-2%, but oil is really taking this stimulus thing on board. Brent was up another US$2.45 to US$112.00/bbl last night and West Texas rose US$1.19 to US$93.39/bbl. Helping oil along was the expectation tonight's weekly US inventory data will show a decline, but no one can remember the last time expectations proved accurate.

The SPI Overnight was up 21 points or 0.5%.

It's Rio ((RIO)) day on the local bourse today, with the big miner due to release its interim, while Stockland ((SGP)) and Computershare ((CPU)) will chime in with full-years. The construction PMI will probably add to the tale of woe, while housing finance and investment lending data will be of interest.

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