US stocks jumped more than one percent yesterday on strong US economic data.
UK stocks surged almost 3 percent yesterday on weak UK economic data.
Apparently, investors will be happy with higher stock prices as long as central banks cut interest rates.
China, though, looks set to tighten monetary policy further. From China View:
China concluded its three-day 2007 Central Economic Work Conference on Wednesday with a pledge to shift its monetary policy from "prudent," an approach it has followed for the last ten years, to "tight."...
China will maintain a "prudent" fiscal policy for the coming year.
Various monetary instruments should be used to regulate liquidity and to strictly control the size of loans and frequency of credit extension, so as to better regulate domestic demand and balance international payments, said the conference.
There seems to have been no explicit mention -- in this or another report -- of a currency revaluation or faster appreciation, though.
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