Markets over-reacted with a "risk off" day Friday: due to a 'surprise' move by India to hike interest rates. The repo rate was lifted by 25bp to 5%.

Official communiqu from India's central bank: "These measures should anchor inflationary expectations and contain inflation going forward.

As liquidity in the banking system will remain adequate, credit expansion for sustaining the recovery will not be affected."

Bottom line: lifting the cash rate is part of a strategy to manage an economic upturn, not choke it off.

Australia faces a second tier data week: an update on skilled vacancies (for March) is always worth a glance, while motor vehicle registrations are likely to sag again after the substantial pull-forward of activity in the latter months of 2009.

We expect the Financial Stability Report on Thursday to reveal that yet again that Australian banks are in great shape.

While 'old' news, New Zealand Dec qtr GDP is likely to be robust: we look for at least 1%/qtr GDP growth for the final months of 2009.

Housing and consumption activity were strong, and inventories to add to growth via less shedding. While net exports are likely to detract from growth, healthy trade surpluses are on the cards for early 2010.