After last Friday's GDP figures, this week's economic news for the US will focus minds on one question: having regained momentum in recent months is the economy now starting to lose it?

It was not just the modest growth in final sales to domestic buyers (i.e., GDP less net trade less inventories) that disappointed. It was also the prospect that the inventory accumulation that contributed much to fourth quarter GDP growth might have been largely unintended. Then again, the drop in government spending did not help. As the chart shows, US GDP has overtaken its previous cyclical peak. However, final sales have yet to match their previous cycle high and the non-farm private sector payrolls have some way to go to make up the lost ground.

It all makes this Friday's Non-Farm Payrolls, the first big number for 2012, of more interest than usual. Along with various purchasing managers' surveys out this week, including the two ISM surveys from the US, the markets should get a good indication of whether the US economy's momentum is stalling or not.

For Europe the week is action packed beginning with bond auctions, notably the 8 billion euros of 5 and 10-year debt for Italy later today. Italy's banks participated big time at the ECB's recent Long-Term Refinancing Operation and so should be ... well ... big buyers.

David Fuller's view Stock markets and some of the commodities which have tracked them, including gold, are overbought in the short term. Consequently, we are likely to see some reactions and consolidations following January's very good gains - the best start to a year in over a decade for many markets. Fullermoney maintains that the medium-term trend for stock markets remains upwards, as we have said since October. We think this is a cyclical bull market.

(See also yesterday's chart review.)