By Greg Peel

The Dow rose 100 points or 0.8% while the S&P gained 1.1% to 1430 as the Nasdaq jumped 1.3%. Apple bounced back 1.8%.

President Obama and Republican majority leader Boehner met again at the White House last night for 45 minutes. No news has been forthcoming from that meeting. As it stands, on the table is the Republican offer to increase taxes on those earning US$1m plus, which counters Obama's insistence of a US$250,000 threshold (US$500,000 for families). On current estimates the Boehner threshold will bring in US$1 trillion over ten years, the Obama threshold US$1.4 trillion. Boehner has also offered to raise the debt ceiling.

That's one side of the equation. The other side is spending, and the trade-off to Boehner's offer is a balancing US$1trn in entitlement cuts (eg to social security).

Wall Street has seen the offer as a positive step towards compromise, increasing the belief a deal will be done. It may even be done before Christmas, or at least before New Year's. However it is not yet known just what support Boehner has from other Republican representatives. We know there is one group onside ? those who signed a letter a couple of weeks ago urging the party to concede to Obama's election victory and grant him his tax increases. As to whether enough representatives will fall in line is another matter.

After lunch on Wall Street it looked like this may be the stumbling block as the indices began to wane, yet from 2pm the buy orders returned in force to ensure a triple-digit close for the Dow. There is hope in the air.

In the meantime, US economic data are still indicating Cliff fears. Last night's Empire State manufacturing index, which represents the New York Fed district, reported its fifth successive negative (contraction) result falling to minus 8.1 from minus 5.2 last month. Economists were hoping for a recovery in December representing a bounce-back from the Sandy impact in November, but with lingering inventories and low orders it appears more will be needed to reinvigorate the district.

Thursday night's Philadelphia Fed index will provide further clues on the Sandy-affected areas.

The US dollar jumped 0.6% against the yen last night on confirmation of the Abe victory in Japan. Abe is intent on money printing being the solution to Japan's woes, which devalues the yen. It also makes US bonds more expensive for Japanese investors, and the Japanese are very big investors in US bonds. The US ten-year yield thus last night rose 6bps to 1.77%.

Yen weakness impacted on all currencies, and as such the US dollar index is little moved at 79.58. Gold is up a little to US$1697.90/oz and the Aussie is slightly weaker at US$1.0549.

Base metals headed in different directions last night but no moves were substantial. The oils were also confused, with the new Brent front month (February delivery) falling US54c to US$107.64/bbl and West Texas rising US64c to US$87.37/bbl. Those watching the spread should note that WTI does not roll over to February delivery until next week.

Spot iron ore is starting to get silly, with another US$2.90 jump to US$132.20/t.

The Australian market was reluctant yesterday to assume the possible Cliff breakthrough would result in a strong session on Wall Street. Last night the SPI Overnight was up 24 points or 0.5%.

Today sees the release of the minutes of the December RBA meeting. Yesterday ANZ economists announced their prediction the RBA would cut to 2.00% over 2013, in four 25bps moved, to counter the impact of the strong Aussie. Last week saw the Fed effectively announcing QE4 and we now have a money printing fanatic in Tokyo. While 2% has not been seen since a recession in the 1960s and even the GFC brought us only an "emergency" 3%, it's a simple matter of offsetting global money debasement which draws funds towards Aussie investments while killing off Australian industry.

The RBA didn't appear to see it this way in its December statement however, so the minutes today will be scoured for more clues.

Rudi will appear on a special two-hour Your Money, Your Call on Sky Business at 7pm tonight.