We're stepping up a gear: The Australian economy seems to have started moving up a gear, according to a strong business survey for March from the National Australia Bank.   "While 2010 appears to have started somewhat slower than late 2009, the pace of activity appears to have accelerated sharply in recent months," the NAB commented, with the bank estimating growth running at a very strong annual rate of 4.5% in the past six months.   It reconfirmed its interest rate upgrade of late last month, forecasting another rate rise by the Reserve Bank next month, and a cash rate of 5.25% by the end of this year, when the bank sees the unemployment rate hitting 4.5% (and 4% by the end of 2011) from the current 5.3%.   It sees dwelling investment rising 8% this year and by 12% in 2011 and there was no sign in the survey of any impact of the recent slump in building approvals and housing finance that will soon bring the recent surge in house prices to an end.

Just what China ordered: In late January China's banking and financial regulators told China's myriad banks to cut their lending, in fact some were ordered to stop lending completely for 10 days. In February, the banks were told to cut lending to real estate with a series of new restrictions. Lending started falling. In March further restrictions on property loans were ordered as official concerns at a 10.7% rise in house prices in the year to February emerged. Overnight saw a more dramatic result of the directives with new lending in March falling to 510.7 billion yuan ($US74.8 billion) from February's 700.1 billion yuan. Figures from the country's central bank showed that as a result, new yuan-denominated lending in the first quarter dropped 43% to 2.6 trillion yuan, or 1.98 trillion yuan lower than in the first quarter of 2009. The joys of living in a centrally run economy!

More good news for China: China's President Hu Jintao met President Barack Obama overnight in Washington to discuss a few niggles, such as the value of the yuan. He took with him the welcome news that growth in the country's foreign exchange reserves has slowed. They hit a new new high of $US2.4471 trillion by the end of March, up $US47.9 billion from the fourth quarter of 2009 when they jumped $US126.5 billion. But the smaller rise couldn't hide a 25.25% surge from the first quarter in 2009; that's a rise of more than $US440 billion in the 12 months. The trade surplus fell 76.7% in the latest quarter to just $14.49 billion, so the reserves were boosted by another $US30 billion or more in other income in the quarter, possibly so-called hot money slipping into China illegally.