While this is good news, having both the US and China steaming ahead on all cylinders at the same time will eventually create headaches for the RBA. Here is UBS's summary of the data released in the US overnight:
* US: The nonmanufacturing ISM report surged to the highest level since 2005, and was well above expectations. The composite index rose to 59.4 (UBSe 57.5, cons: 57.1) in Jan from 57.1 in Dec.
* US: New jobless claims fell to 415k (cons & UBSe 420k) in the week of Jan 29 from 457k (454k) the prior week. Because of unusually bad weather, the claims data have been unusually choppy in January. We expect weather will also affect payrolls for January (UBS: 80k, mkt:
143k).
* US: Factory orders were also better than expected in Dec: +0.2% (cons:
-0.5%, UBSe: 0.0%) and Nov revised to +1.3% from +0.7%. Other key details were revised up.
* US: The monthly ICSC store sales index accelerated to 4.8% yy in Jan from 3.1% yy in Dec. That was much stronger than analyst estimates of below 2% y/y and much stronger than the weekly store sales figures, which faded a bit in Jan.
* US: Productivity and unit labor cost changes were favorable for business margins in Q4. Productivity rose 2.6% (UBSe 2.4%, cons 2.0%, after 2.3%). Unit labor cost fell 0.6% (UBSe -1.5%, cons +0.2%, after -0.1%). This gives some offset to the surge in commodity input prices facing many industries.
