Snow, Dollar, Stocks and Bonds Falling on Easter Monday

April 2, 2018

A rare April snow storm is hitting the U.S. Northeast.

Market volume even without the snow would have been thin because of numerous Easter Monday closures, for instance in Australia, New Zealand, Spain, Switzerland, Great Britain, Germany, Spain, Norway and Hong Kong. South Africa is observing Family Day.

As a new calendar quarter kicks off, the dollar has fallen 0.6% against the Swiss franc, 0.2% versus the loonie and sterling, and 0.1% relative to the euro. Alternatively, the dollar is up 0.1% versus the yen, Aussie dollar, yuan and kiwi.

Equities fell 0.4% in South Korea, 0.5% in Taiwan, 0.3% in Japan, and 0.2% in China. U.S. futures are down, led by tech stocks. Trump tweeted negatively about Amazon over the weekend.

The ten-year Treasury yield is up three basis points. Gold and oil have firmed 0.8% and 0.1%, respectively.

The Bank of Japan’s quarterly corporate Tankan survey revealed better-than-forecast business sentiment now but projected somewhat lower readings in the next survey due in June. The diffusion indices for big manufacturers and big non-manufacturers printed respectively at +25 (down from 26) and +24 (down from 25). The diffusion index measuring sentiment among all 10,020 survey participants printed at +17 versus +16 in the December 2017 survey. Large firms plan to raise capital spending in fiscal 2018, which runs from this month through next March, by 2.3%. They anticipate a 1.0% rise in sales and a 1.5% dip in earnings.

Among purchasing manager surveys for the month of March released today,

  • Japan’s factory PMI fell 1.0 points to a 5-month low of 53.1. Growth in production and new business was slower than in February.
  • The government-compiled Chinese manufacturing PMI rose 1.2 points to a 3-month high of 51.5. Employment contracted at the quickest pace in 8 months, but business sentiment hit a multi-year high.
  • The government-compiled Chinese non-manufacturing PMI rebounded from February’s 4-month low to a 2-month high of 54.6, and the composite PMI for both manufacturing and non-manufacturing increased by 1.1 points to 54.0.
  • Caixin’s manufacturing PMI for China fell by 0.6 points in March to a 4-month low of 51.0, but business sentiment improved to a 1-year high.
  • Indonesia’s factory PMI slipped 0.7 points to a 2-month low of 50.7. Readings below 50 would imply a deterioration.
  • Malaysia’s Manufacturing PMI was below 50 for the third time in four months, dropping 0.4 points to a 5-month low of 49.5.
  • The Filipino manufacturing PMI improved 0.7 points to a 2-month high of 51.5. Record highs were recorded in the price subindices.
  • Taiwan’s manufacturing PMI fell 0.7 points to a 5-month low 55.3.
  • Thailand’s manufacturing PMI printed below 50 at a 16-month low of 49.1. Output, orders and business sentiment all had sub-50 readings.
  • Vietnam’s manufacturing PMI dropped from a 10-month high of 53.5 in February to a 4-month low of 51.6 in March.
  • Russia’s manufacturing PMI recovered 0.4 points to a 2-month high in March of 50.6.
  • The Turkish PMI in manufacturing plunged 3.8 points to an 11-month low in March of 51.8.
  • The Greek manufacturing PMI fell 1.1 points to 55.0 in March, but the report was accompanied by record high scores in sentiment and jobs growth.

The South Korean trade surplus of $6.9 billion last month was higher than those of $3.2 billion in February and $6.1 billion in March 2017.

Indonesia CPI inflation accelerated 0.2 percentage points to 3.4% in March. Core inflation edged up to 2.7%.

Japanese motor vehicle sales recorded the same 4.9% year-on-year drop in March as in February. Such had been 5.7% less than a year earlier in January.

U.S. construction spending data get released today.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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