Jean-Claude Trichet, President of
the Euroland Central bank, has made the amazing claim that global growth might
be stronger in 2006 than in 2005. Apparently, Euroland, long the laggard in the
world economy, is growing “above trend.” Gadzooks! The pundits are saying the
ECB might even implement a 50 basis point rate hike before long. Mr Trichet
said that central banks needed to be “vigilant” about inflation – the stock
phrase from central banking 101. (Henry monitors the World Economy here.)

Locally, consumer confidence has
rebounded. The Melbourne Institute Consumer Confidence rating (released
yesterday) rose 2.6% to 107.4 in January to a level just below the Consumer
Confidence recorded in November 2005 (107.5). Consumer Confidence fell 2.7% in
December 2005 to 104.8.

This is mild good news, but not
unexpected. It confirms our view that Australians are returning to their ways
as the world’s champion consumers. The rebound in credit growth and the
horrendous trade deficit in November support this

Read Henry’s take on Australian
economic news so far in 2006 here.