There was cheer in the Asian markets as stocks rallied due to positive signs in the Chinese economy. Also, there was more progress made in the trade talks between China and the U.S. The Chinese also posted positive factory gauges which enables the stocks to rally.
In the markets:
Stocks:
The Asia-Pacific shares broadest index NSCI increased by 1% on Monday while the Shanghai Composite was at 1.7% rise. Japan’s Nikkei rose by 2% while the KOSPI saw a gain of 1%. The Australian stocks increased by 0.8% as the Chinese factory gauge showed positive signs. The S&P 500 also posted its best gains for a quarter in more than a decade as there was great optimism due to trade talks ending with some constructive measures expected between the top two economies of the world as they resolve trade issues between them. Soichiro Monji who is a senior strategist said ‘Hopes that the US and China would reach an agreement on trade as early as this month are enabling stocks to begin the first quarter on a positive note’.
Currencies:
The dollar remained unchanged at 97.260 against the major currencies. The pound was at $1.3022 with a fall of 0.1% due to the MP’s rejecting the third deal proposed by PM Theresa May. The euro was at $1.2227, and the Australian dollar increased to $0.7124 with a rise of 0.4% as China showed positive factory output data.
Treasury yields:
The yield for the 10-year treasury bonds increased to 2.44% after it reached its 1.3 year low of 2.34%. The decrease in the yields has raised concerns of an economic slowdown, and the markets are concerned.
Commodities:
The prices of crude oil increased with the WTI futures increasing to $60.45 for a barrel rise by 0.5%. This rise was the biggest quarterly increase in 10 years as there was cut in production and supply by OPEC and also due to sanctions by the United States against Venezuela and Iran.
China’s PMI shows a rise in March:
The Purchasing Managers’ Index released by China showed that the factory output grew in March. As per Bank Of America economists, it is due to the stimulus provided by Beijing. It said that ‘our view is the impact of policy easing is gradually kicking in, pushing up sequential growth indicators such as PMI.’
If the same progress continues, the manufacturing sector in China could recover and also the chances of China slipping to a sharp downturn will also reduce.
