European and American shares traded modestly higher overnight despite the US government's credit downgrade and lower industrial activity in China. Locally there is strong expectation of a rate cut by Australia's central bank, even though employment here is robust.  If the RBA does surprise today by not cutting rates, the initial sharemarket reaction is likely to involve selling. If we see a rate cut then the market is likely to jump 0.5% to 1%, lead by banks, infrastructure and real estate investment trusts.