The flow of economic data has improved markedly last month, setting the scene for a period of quiet on the interest rate-cutting front.
Westpac's data pulse for Australia, which tracks the share of economic data released across the past eight weeks that has improved, rose from 40 at the end of January to almost 54 at the end of February.
"While the index itself remains in well-rehearsed ranges, the fact we have bounced from the lower levels prevailing at the end of January does suggest something of an improvement," said Robert Rennie, Westpac's chief currency strategist. Jumps in consumer and business confidence contributed significantly to the rise.
"Both consumer sentiment and business confidence have arguably been helped by lower rates in Australia, the improved outlook in Europe and the fact the United States' fiscal cliff came and went without creating the kind of turmoil some might have expected," Mr Rennie said. "To what extent this improved confidence translates into stronger data outcomes for January and February will be important though."
Westpac's global data pulse -- which weights 22 countries by their gross domestic product -- edged up too, largely as a result of improvement in emerging market countries.
China's pulse rose from 62 to almost 70, as did India's, while Russia's pulse ended February at 54, up from 47 in January.
"Developed countries' pulse fell very modestly mainly as a result of Europe while the US was more or less unchanged at 50," Mr Rennie said.
