In the December quarter, a strengthening Australian dollar saw import and export prices trend lower, keeping Australia's Terms of Trade for goods flat.
Potentially lower commodities prices will continue to contribute to lower export prices, indicating a future decline in Australia's Terms of Trade.
HIA private new homes sales declined slightly, falling 0.4% over December. The fall was mainly due to a weaker showing in Victoria.
However, consecutive months of high sales continue to indicate a positive upward trend in demand for new dwellings.
Markets chose to respond to positive US GDP and personal consumption data, disregarding the weaker home sales data as 'snow affected'.
European markets were mostly up with the Dax rising 0.4% and the French CAC40 up 0.6%. In the UK, the FTSE100 fell 0.1%. US markets were strong with the Dow up 0.7% and the Nasdaq rising 1.8%.
The lift in global risk appetite overnight did not translate into a flight from bonds. Treasury prices fell marginally leading to a two point increase in US 10 year government bond yields.
US 2 year bond yields were unchanged at 0.35%. In Australia yesterday, the shift from equities into bonds was pronounced as 10 year yields fell 11 basis points and 3 year yields were down 7 basis points to 2.82%.
The AUD rose against the majors overnight at the same time as a rise in the US dollar index. Markets had a renewed appetite for risk and were prepared to support the AUD against the USD even in the face of good US data (see below)
The price of oil rose strongly on the back of solid US GDP numbers and on reports of reduced shipments of oil out of OPEC countries.
The stronger US GDP numbers suggested to gold traders that the US monetary stimulus will continue to be wound back in future months thus reducing the potential for an outbreak of US inflation. Copper prices continued to move lower against the background of a potentially slower Chinese economy.
The HSBC-Markit manufacturing PMI data from China yesterday points to a slowdown in the manufacturing industry in January, falling from 50.5 to 49.5.
The reading is close to the flash estimate earlier in the month. While Chinese growth is expected to slow, caution should be used when interpreting any data around Chinese Lunar New Year.
The Eurozone business climate indicator was stalled at 0.19 in January, from 0.20 in December (the highest in over two years) and 0.18 in November.
However, the economic confidence index rose from 100.4 to 100.9, a two and a half year high.
Meanwhile German inflation was down a tick to 1.3% for the year to January according to a preliminary report; a small rise had been expected.
Also, German unemployment fell 28k in January, after a 19k fall in December, the steepest back to back monthly declines since Q3 2011. The unemployment rate was steady at 6.8% in January.
New Zealand building approvals rose 7.6% in December contrary to market expectations for a fall. Total building approvals rose 26% over 2013 suggesting the New Zealand property market remains buoyant.
December Japanese retail sales figures indicated a sluggish retail sector during the holiday period. However the trend in retail sales has improved in late 2013 from earlier in the year.
UK mortgage approvals rose to 71.6k in December, a new post 2008 high, and mortgage outstandings rose a further £1.7bn, completing the first string of five monthly rises above a billion this decade.
With mortgages no longer qualifying for Funding for Lending Scheme "subsidies" from the BoE from next week, the recent acceleration in lending (and house prices) might not be fully sustained in 2014.
US GDP grew 3.2% annualised in Q4, following Q3's 4.1% gain, the fastest half year of growth since Q4 11-Q1 12.
A significant contributor was a 2.5% rise in personal spending on services. Within the numbers, dwelling investment fell for the first time in around three years but business investment grew at an annual pace of 3.8%.
Government spending was a drag on growth, falling at an annual pace of 4.9% much of which can be attributed to the October shutdown.
Core personal consumption inflation was reported a 1.1% for the year.
US pending home sales plunged 8.7% in December, their seventh consecutive decline.
The decline was broad-based across all regions so weather cannot be blamed for all the weakness. Higher mortgage rates have likely played a part.