The global bulls returned last night as a surprise expansion in US manufacturing last month eased concerns about the economy and offset a gloomier outlook in Asia and Europe.

In London the FTSE 100 rallied 78 points (+1.4%) to settle at 5820, whilst the French CAC (+2.4%) and German DAX (+1.5%) also enjoyed stellar gains.

Stateside, the Dow Jones put on 78 points (+0.6%) to settle at 13515, whilst the S&P gained 0.3% and the NASDAQ shed 0.1%.

US manufacturing expanded in September for the first time since May as new orders and employment picked up, an Institute for Supply Management report showed.

The ISM’s index rose to 51.5 from 49.6 in August, topping expectations for a reading of 49.7, according to a Reuters poll, and breaking above the 50 mark that separates expansion from contraction.

The US data followed surveys in the eurozone that showed manufacturing slackened in the three months to September while Asia’s factories are continuing to struggle in the face of tepid demand from the United States and Europe.

Gold futures jumped to a 10-month high after Federal Reserve Bank of Chicago President Charles Evans said that the US central bank can do more to boost the economy, fuelling concern that inflation will accelerate.

Oil advanced to a one-week high as US manufacturing unexpectedly expanded and Spanish banks' capital deficit dropped in September from June.

Crude oil for November delivery rose 29 cents to $92.48 a barrel on the New York Mercantile Exchange, the highest settlement since 21 September.

Today's session will bring us the latest RBA rate decision. At this time the likelihood of a 25 basis point rate cut stands at 60%.

Morning Market Analysis: Bulls Bouncing Back is a post from: Australian Stock Report Market Pulse Blog