By Greg Peel

The Dow rose 128 points or 0.8% while the S&P gained 1.3% to 1706 and the Nasdaq added 1.3%.

A month ago the Chinese government decided the publication of purchasing managers' index (PMI) data was all too hard and elected to suspend official releases. The suspension proved rather short-lived, given Beijing was happy yesterday to publish a July increase to 50.3 from 50.1 in June.

The official number defies the independently assessed measure from HSBC, which showed a fall to 47.7 from 48.2. If we make the wild assumption that both numbers are accurate, China's large state-owned enterprises are in slight expansion mode while the bulk of smaller private operations are quietly contracting.

At least it is a tight imbalance around the 50-steady mark. In Australia's case, something looks a bit wrong. Australia's manufacturing PMI plummeted to 42.0 in July from 49.6 in June, basically mirroring the rise in June from May. While Australian numbers tend to be a bit more volatile than those of larger economies, seven points up (to break a longstanding trend) and seven points down again smells of a statistical blip. So it's as you were: Australian manufacturing is still disappearing.

At least the global news only gets better. It was hinted at with an earlier flash estimate, but the eurozone manufacturing is now officially back to expansion, with a rise to 50.3 from 48.8. With England winning everything at the moment (except maybe the third test?), it is no surprise the UK PMI surged to 54.6 from 52.5, and finally, Wall Street was thrilled about the US PMI increase to 53.7 from 51.9.

The strong US PMI came a day after the Fed made no mention of QE tapering in its FOMC statement, and even sounded more dovish than it did at the last meeting. It is thus no shock the S&P 500 broke into new all-time high territory again last night, and in doing so conquered 1700 for the first time. To add icing to the cake, US weekly new jobless claims fell 19,000 to 326,000 to mark the lowest level since January 2008.

The US non-farm payrolls number is out tonight, and one feels not much can go wrong. Good will mean great and bad will mean an easing of tapering expectations. I have said it many times before now, but never judge Wall Street's reaction to a Fed monetary policy statement until the day after. The smart money is too smart to play knee-jerk games in the volatile couple of hours between the release and closing bell. The smart money sleeps on it. Hence last night the stock indices opened higher and stayed there all session, and the US ten-year bond yield jumped 13 basis points, back to earlier tapering-fear highs at 2.72%.

The doomsayers remain, but there is a growing cohort of market observers wondering just when the switch from bonds/cash to equities will begin in earnest.

Both the ECB and Bank of England elected to keep their cash rates steady last night.

US stocks are playing out as if the US economy is recovering, bond yields are playing out as if the Fed will soon begin tapering because the US economy is recovering, and both mean a stronger greenback. Last night the US dollar index jumped 0.9% to 82.35. The Aussie respectfully fell 0.6% to US$0.8937 and gold dropped US$13.40 to US$1310.80/oz.

Gold was nevertheless the only "commodity" to react mathematically to the US dollar. Base metals all defied the currency and went with the strong global economic data, with copper, lead and tin all up 1-2%. The oils played along as well, with Brent up US$1.62 to US$109.32 and West Texas up US$2.74 to US$107.77/bbl.

Spot iron ore fell US20c to US$129.70/t.

The SPI Overnight jumped 41 points or 0.8%.

Will we finally see the ASX 200 break out of its recent slumber today? Or will be see a typical Friday opening surge and post boozy lunch drift-off?

ResMed ((RMD)) reported its quarterly profit result overnight, slightly beating expectations.

US jobs tonight.