This is inevitably what happens when you keep interest rates near zero for very long periods of time, and start printing money by the bucket-load (assuming you don't have totally negative population growth like Japan). So much for the-world-is-going-into-recession line of thinking. From the good guys at UBS overnight:
OVERNIGHT DATA - Chinese GDP stronger than expected at 8.9% y/y. US Empire State rising. German sentiment jumps.
* US: The Empire State manufacturing index rose to 13.5 in Jan (cons 11.0, UBSe 12.0) from 8.2 in Dec (was 9.5) - suggesting continued re-acceleration. Employment and new orders rose sharply, and shipments edged up from an already high level. (The ISM-equivalent measure rose to 55.1 from 52.5.)
* CH: Q4 GDP grew stronger than expected at 8.9% y/y (mkt: 8.7%) - about 8.5% q/q annualised (similar to Q3) - albeit the slowest since Q209, and moderating from 9.1% y/y in Q3. 2011 overall grew by 9.2%.
* CH: In December, the slowdown in export growth was modest (13.4% y/y), retail sales were strong (18.1% y/y, partly due to the early Chinese New Year and holiday demand), while weak property sector investment - as sales declined 6.7% y/y, and housing starts dropped 19% y/y - led to a further slowdown in total fixed asset investment (18.3% y/y). However, IP rebounded (12.8% y/y).
* UK: CPI rose 0.4% m/m as expected in December (after 0.2%), slowing to 4.2% y/y (after 4.8%). RPI was also up 0.4%, moderating to 4.8% (after 5.2%). Inflation has now slowed for three months in a row from a peak of 5.2% for CPI and 5.6% for RPI.
* EU: CPI picked up by 0.3% m/m in December (mkt: 0.4%), after 0.1% - although the y/y pace moderated to 2.7% (mkt: 2.8%) after 3.0%.
* GE: ZEW sentiment was much better than expected in January, jumping sharply to -21.6 (consensus -50) after -53.8. Current conditions also edged up from 26.8 to 28.4.
