Rob Rennie, Research Analyst at Westpac, suggests that of the 7 pieces of US data released last week captured by our US surprise index, 5 (or 71%) beat forecasts which is one of the best outcomes we have seen back to July last year. Key Quotes “Clearly the better than expected retail sales and upward revision to the previous outcome was a part of this pickup. Indeed, post Friday's US retail sales, the Atlanta Fed GDPNow index forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 rose to 2.7%, up from 2.5 percent on February 9. The forecast for first-quarter real consumption growth increased from 3.0 percent to 3.2 percent. That suggests a stronger quarter for growth and consumption in the US something the Fed will be pleased to see. Now, clearly the Atlanta Fed throws a lot more science at the process than the various economic data surprise and pulse indices we run each week - see WBCI on Bloomberg for details. However, the chart below plots the Westpac US data surprise index against the Atlanta Fed GDPNow forecast. It clearly suggests that the recent uptick in the Atlanta Fed is consistent with our measure of data surprise in the US economy. Now US and global markets spent the last week gripped by a mixture of fear, confusion and panic. So it's not clear that the above message of improving data momentum in the US economy really got through. However, if Friday's improved price action does allow traders to take a break to assess that data momentum in the US, they should like what they see. So we stick with our stronger US$ view. I expect to see a stronger US dollar in coming weeks as markets step back from the extreme volatility seen last week. With likely softer commodity prices (iron ore and crude as supply again becomes an issue), AUD should remain capped by 0.72/ 0.7250.” For more information, read our latest forex news.