Economic wrap: eye on Asia - Westpac

Analysts at Westpac offered an economic wrap.

Key Quotes:

"The US Employment Cost Index gained 0.5% in Q4 (vs 0.6% expected) – a slight setback but still ratcheting higher from the recession low, possibly reflecting vehicle sector volatility. Corelogic house prices for 20 cities rose 5.27% yoy (vs 5.03% expected), all cities posting gains. Consumer confidence (Conference Board) slipped from 113.3 to 111.8 (112.8 expected) but continues to fluctuate around decade highs. Chicago PMI fell from 53.9 to 50.3 (vs 55.0 expected) – the lowest since May.

Economic Event Risks Today

NZ: labour market data for Q4 (including employment, unemployment, participation, wages) should be strong, resulting in a fall in the unemployment rate from 4.9% to 4.8% - an eight-year low. Broad-based economic strength explains the improvement.

Australia: Corelogic house prices for Jan are due, though caution needs to be taken given the very limited sales volumes that month. AiG PMI is supported by housing and the AUD.

Official PMIs are due in China, followed by Markit manufacturing measures for Japan, Euro Area, UK and US.

US: The FOMC is unlikely to make waves with inflation under control and many questions surrounding Trump's policies. ADP private payrolls should report a solid job gain in Jan. ISM is likely to remain positive; however, construction spending is likely to remain weak."