Better than expected data across Asia, US and Europe spark optimism in the short end

The Chinese GDP release surprised on the up side and sparked a sell off in interest rates yesterday afternoon as median forecasts of 8.7% were brushed aside in a Q4 increase of 2.0%, 8.9% YoY. A positive boost to global markets and further enhanced by the US Empire manufacturing Survey for January (up 13.5, median 11.0). Continuing the trend in Europe the German ZEW Survey showed a dramatic improvement in January couple with a positive Spanish and EFSF bills auction investors weighed into currencies, commodities and equities.