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UK PMI manufacturing finalized at 58.9 in Mar, signs of spring appeared

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    ActionForex.com
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    UK PMI Manufacturing was finalized at 58.9 in March, up from February’s 55.1. That’s the highest level in 121 months since February 2011. Business optimism rose to seven-year high. But supply-chain disruption and inflationary pressures built.

    Rob Dobson, Director at IHS Markit: “Signs of Spring have appeared in the UK manufacturing sector, with the PMI hitting its highest level in a decade… Weak export sales and supply-chain issues are likely to remain constraints on growth moving forward, however… Demand outstripping supply to such a wide extent is meanwhile driving up prices… The longer these inflationary and supply-chain worries persist, the greater the potential to curb the strength of the upturn as the economy unlocks in the coming weeks and months.”

    Full release here.

    Eurozone PMI manufacturing finalized at 62.5 in Mar, improvement broad based across the region

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      ActionForex.com
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      Eurozone PMI Manufacturing was finalized at 62.5 in March, up from February’s 57.9. Manufacturing economy “performed extremely strongly”, with “operating conditions improving to the greatest degree in nearly 24 years of data collection.”

      Looking at some member states, Germany PMI manufacturing rose to 66.6, a record high. The Netherlands rose to 64.7, record high. Australia rose to 63.4, 39-month high. Italy rose to 59.8, 252-month high. France rose to 59.3, 246-month high. Ireland rose to 57.1, 8-month high. Spain rose to 56.9, 171-month high. Even Greece rose to 51.8, 13-month high.

      Chris Williamson, Chief Business Economist at IHS Markit said: “Although centred on Germany… the improving trend is broad based across the region as factories benefit from rising domestic demand and resurgent export growth…. Driving the upturn has been a marked improvement in business confidence in recent months, with expectations of growth in the year ahead running at record highs in February and March.”

      Full release here.

      Australia exports dropped -1% mom in Feb, imports rose 5%

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        ActionForex.com
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        Australia goods and services exports dropped -1% mom to AUD 38.93B in February. Goods and services imports rose 5% mom to AUD 31.40B. Trade surplus came in at AUD 7.53B, down form January’s AUD 9.62B, below expectation of AUD 9.40B.

        Retail sales dropped -0.8% mom in February, revised up from preliminary reading of -1.1% mom.

        Australia AiG manufacturing rose to 59.9 in Mar, highest since 2018

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          ActionForex.com
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          Australia AiG Performance of Manufacturing Index rose to 59.9 in March, up from 58.8. That’s the highest level since March 2018, and indicates a sixth consecutive month of strong recovery. Looking at some details, production dropped -8.6 to 57.2. Employment rose 8.2 to 66.0. New orders rose 3.6 to 63.5. Exports dropped -2.8 to 51.3. Input prices dropped -2.8 to 71.3. Selling prices rose 8.5 to 59.7.

          Ai Group Chief Executive Innes Willox said: “The strong recovery in Australian manufacturing gathered further pace in March with growth across the full range of sectors. Production and sales continued to expand despite pulling back from very rapid rates of growth in February. Employment growth surged with manufacturers’ confidence boosted by buoyant levels of new orders. The machinery & equipment sector benefitted from higher demand from across the industrial, mining and agricultural sectors while the metal products and building equipment sectors supplied into healthy levels of residential construction and infrastructure activity.

          “Some growing pains are evident with deliveries of inputs not keeping up with sales of finished products and with reports of skill shortages becoming more widespread. The challenge over the next couple of months will be to maintain momentum as fiscal support is wound back further and while COVID-19 remains a threat.”

          Full release here.

          China Caixin PMI manufacturing dropped to 50.6, growing inflationary pressure

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            ActionForex.com
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            China Caixin Manufacturing PMI dropped to 50.6 in March, down from 50.9, missed expectation of 51.0. Markit noted that production increased again amid further uptick in sales. Export orders rose for the first time in three months. Inflationary pressures also picked up.

            Wang Zhe, Senior Economist at Caixin Insight Group said: “Overall, the manufacturing sector continued to recover in March, but the momentum of both supply and demand weakened. Overseas demand largely improved. The sector remained under employment pressure. Manufacturing enterprises were still confident that the economy will continue to recover and that the pandemic will be brought under control, with the gauge for future output expectations exceeding the long-term average.

            “We should pay attention to inflation in future as the gauges for input and output prices have been rising for several months. The growing inflationary pressure limits the room for future policies and is not a good thing for sustaining an economic recovery in the postepidemic period.”

            Full release here.

            Japan Tankan large manufacturing index rose to 5 in Q1, highest since Q3 2019

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              Japan Tankan Large Manufacturing Index rose to 5 in Q1, up from -10, above expectation of 0. That’s also the highest level since Q3 2019. Non-Manufacturing Index rose to -1, up from -5, above expectation of -5. Large Manufacturing Outlook rose to 4, up from -8, matched expectations. Non-Manufacturing Outlook rose to -1, up from -6, above expectation of -2. All industry Capex rose 3.0%, above expectation of 1.4%.

              Also released, PMI Manufacturing was finalized at 52.7 in March, up from February’s 51.4. Usamah Bhatti, Economist at IHS Markit, said: “The Japanese manufacturing sector continued to gather some positive momentum at the end of the first quarter of 2021… Beyond the immediate future, Japanese manufacturers were confident that output would continue to rise over the coming 12 months… Currently, IHS Markit estimates that industrial production in Japan will grow 7.7% in 2021, yet this does not fully recover the output lost in 2020.”

              US oil inventory dropped -0.9m barrels, WTI struggles to extend rebound

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                ActionForex.com
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                US commercial crude oil inventories dropped -0.9m barrels in the week ending March 26, versus expectation of -1.3m. At 501.8m barrels, oil inventories are about 6% above the five year average for this time of year. Gasoline inventories dropped -1.7m barrels. Distillate rose 2.5m barrels. Propane/propylene dropped -2.0m barrels. Commercial petroleum inventories dropped -1.3m barrels.

                WTI crude oil is still struggling in established range above 57.31. While it’s drawing some support from 55 day EMA, it’s struggling to extend the rebound form 57.31. Focus is now on 62.22 resistance. Firm break there will indicate completion of the correction from 67.83, and bring retest of this high.

                Nevertheless, sustained break of the 55 day EMA will indicate that WTI is in a medium term correction. Deeper fall should be seen to 38.2% retracement of 33.50 to 67.83 at 54.71 at least, before the correction completes..

                Canada GDP grew 0.7% mom in Jan, expecting 0.5% mom growth in Feb

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                  ActionForex.com
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                  Canada GDP grew 0.7% mom in January, above expectation of 0.5% mom. That’s the ninth consecutive monthly increase. Yet, total economic activity remained about -3% below February 2020 level, before the pandemic. Good-producing industries were up 1.5% mom while services-producing industries were up 0.4% mom. 20 industrial sectors were nearly evenly split between expansions and contractions.

                  Preliminary information suggests an approximate 0.5% increase in real GDP for February. Retail trade, construction, and real estate and rental and leasing all contributed to the growth, while manufacturing offset some of the increase.

                  Full release here.

                  US ADP jobs grew 517k, strongest since last Sep

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                    ActionForex.com
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                    US ADP employment grew 517k in March, below expectation of 550k. By company size, small businesses added 174k jobs, medium businesses added 188k, large businesses added 155k. By sector, goods-producing jobs grew 80k, service-providing grew 437k.

                    “We saw marked improvement in March’s labor market data, reporting the strongest gain since September 2020,” said Nela Richardson, chief economist, ADP. “Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry. This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available. We are continuing to keep a close watch on the hardest hit sectors but the groundwork is being laid for a further boost in the monthly pace of hiring in the months ahead.”

                    Full release here.

                    ECB Lagarde: We have exceptional circumstances to deal with at the moment

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                      ActionForex.com
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                      ECB President Christine Lagarde said in a Bloomberg TV interview, “we have exceptional circumstances to deal with at the moment and we have exceptional tools to use at the moment, and a battery of those. We will use them as and when needed in order to deliver on our mandate and deliver on our pledge to the economy.”

                      “Given the exceptional situation that we are facing we are using maximum flexibility” with the EUR 1.85T PEPP purchases program, she added. The March 2022 deadline of the program was not “set in stone”, and policy makers will give “sufficient early notice to avoid the anxiety, the tantrum, or any of those movements” that have happened in the past.

                      Overall, Lagarde said, “we have an economic situation overall which in this part of the world, Europe, is really marked by uncertainty. What monetary policy has to do and what the ECB has to do is to provide as much certainty as possible.”

                      Eurozone CPI jumped to 1.3% yoy in Mar, but core CPI slowed to 0.9% yoy

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                        ActionForex.com
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                        Eurozone CPI jumped to 1.3% yoy in March, up from 0.9% yoy, above expectation of 0.9% yoy. However, CPI core dropped to 0.9% yoy, down from 1.1% yoy, missed expectation of 1.1% yoy.

                        Energy is expected to have the highest annual rate in March (4.3%, compared with -1.7% in February), followed by services (1.3%, compared with 1.2% in February), food, alcohol & tobacco (1.1%, compared with 1.3% in February) and non-energy industrial goods (0.3%, compared with 1.0% in February).

                        Full release here.

                        UK Q4 GDP finalized at 1.3% qoq, contracted -9.8% in a 2020 as a whole

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                          ActionForex.com
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                          UK GDP growth was finalized 1.3% qoq in Q4, revised up from 1.0% qoq. The level of GDP was still -7.3% below it’s Q4, 2019 level, prior to the impact of the coronavirus pandemic. Over the year as a whole, GDP contracted -9.8% in 2020, slightly revised from first estimate of -9.9% decline. That is the largest annual fall in UK GDP on record.

                          Full release here.

                          France CPI jumped to 1.1% yoy in Mar, consumer spending flat in Feb

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                            ActionForex.com
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                            France CPI accelerated to 1.1% yoy in March, up from February’s 0.6% yoy. This increase in inflation should result from the acceleration in the service prices and from a marked rebound of those of the energy.

                            Consumer spending was flat in February, below expectation of 1.3% mom rise. The increase in manufactured goods purchases (+3.4%) was offset by a drop in energy expenditure (-3.1%) and food consumption (-2.2%).

                            New Zealand ANZ business confidence dropped to -4.1, demand overshoot wanes

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                              ActionForex.com
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                              New Zealand ANZ Business Confidence dropped to -4.1 in March, comparing to preliminary reading at 0, and down from February’s 7. Own Activity Outlook dropped to 16.6 (prelim. at 17.4), down from 21.3. Export intentions dropped to 4.5, down from 5.1. Investment intentions dropped to 11.9, down from 15.6. Employment intentions rose to 14.4, up from 10.6. Pricing intentions rose to 47.3, up from 46.2.

                              ANZ said: “The March snap lockdowns make Business Outlook data a little harder to interpret. However, it is consistent with our view that as the demand overshoot wanes and the tourists are missed more and more, the economy will go largely sideways this year. The quicker cooling we now expect in the housing market plays into this theme as well. The vaccine rollout and the subsequent border re-opening will be game-changers, though it won’t be click-of-a-switch stuff. But there’s a path to the new normal, whatever precisely that looks like, and we’re on it. We’ll be keeping an eye on construction for possible bumps in the road.”

                              Full release here.

                              Japan industrial production dropped -2.1% mom in Feb, more contraction expected in Mar

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                                ActionForex.com
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                                Japan industrial production dropped -2.1% mom in February, worse than expectation of -1.3% mom. In addition to pandemic restrictions, production was disrupted by the 7.3-earthquake off the coast of eastern Japan on February 13.

                                Manufacturers surveyed by the Ministry of Economy, Trade and Industry expected output to drop another -1.9% mom in March, followed by 9.3% mom rebound in April. But the actual figure could be worse as the impact of the March 19 fire at a Renesas Electronics chip-making plant was not reflected in the forecasts yet.

                                China PMI manufacturing rose to 51.9, PMI non-manufacturing rose to 56.3

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                                  ActionForex.com
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                                  China official PMI Manufacturing rose to 51.9 in March, up from 50.6, above expectation of 51.0. That’s also the highest level in 2021. 17 of the 21 industries saw expansion in the month. New order index rose 2.1 pts to 53.6. New export orders rose 2.4 pts to 51.1. PMI Non-Manufacturing jumped to 56.3, up from 51.4, above expectation of 52.6. PMI Composite rose to 55.3, up from 51.6.

                                  “After the Lunar New Year, the recovery of production accelerated, and the manufacturing industry rebounded significantly in March,” said Zhao Qinghe, a senior statistician at the NBS. “As the results of pandemic controls being consolidated, consumer demand continues to be released, and the service industry accelerated its recovery.”

                                  Fed officials optimistic on strong recovery ahead

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                                    ActionForex.com
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                                    Some Fed official expressed their optimism over the economic recovery ahead. Atlanta Fed President Raphael Bostic said, “we could see a burst of activity and performance coming into the summer which could lead us to see even more robust recovery.” He’s upbeat about the economy, as “a million jobs a month could become the standard through the summer.”

                                    Richmond Fed President Thomas Barkin said he’s “bullish” on the economy this year. “People just have a lot of money in their pockets,” he said. The money will be spent as people are comfortable to go out again. that would help fuel growth into 2022 and 2023 too.

                                    New York Fed President John Williams said he’s “optimism about the overall economy”, as “we’re making great strides on the vaccination program”. Also, “we have a lot of positives going forward.”

                                    Fed Vice Chair Randal Quarles said he’s “one of the biggest optimist” on the economy. Yet, “we shouldn’t jump the gun. Let’s wait until we see those outcomes,” he added. “And clearly the performance of the macro economy, and the performance of monetary policy, not just over the last decade but really even 15, 20 years, would argue that that leads to superior outcomes.”

                                    US consumer confidence rose to 109.7, highest in a year

                                      By
                                      ActionForex.com
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                                      US Conference Board Consumer Confidence jumped to 109.7 in March, up from 90.4, well above expectation of 96.0. That’s the highest level since the onset of the pandemic in March 2020. Present Situation Index rose form 89.6 to 110.0. Expectations index rose from 90.9 to 109.6.

                                      Lynn Franco, Senior Director of Economic Indicators at The Conference Board: “Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items. However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.”

                                      Full release here.

                                      Eurozone economic sentiment jumped to 101, back above long-term average

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                                        ActionForex.com
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                                        Eurozone Economic Sentiment Indicator (ESI) jumped to 101 in March, up from 93.4, above expectation of 96. It’s now slightly above its long-term average since the pandemic began. Employment Expectations Indicator jumped 6.8 pts to 97.7. Looking at some more details, industrial confidence rose form -3.1 to 2.0, turned positive. Services confidence rose form -17.0 to -9.3. Consumer confidence rose from -14.8 to -10.8. Retail trade confidence rose from -1.1 to -12.2. Construction confidence rose from -7.5 to -2.7.

                                        EU ESI rose 6.9 pts to 100.0, back at long-term average. Amongst the largest EU economies, Germany stood out with the largest monthly improvement of its ESI on record (+7.9) and is currently the only of the ‘big-6’ countries where sentiment returned to above its long-term average. The monthly increases in sentiment in the other big countries were nevertheless very significant, too: Spain (+6.2), France (+5.4), Italy (+4.9), the Netherlands (+4.4), Poland (+3.3).

                                        Full release here.

                                        Swiss KOF rose to 117.8, highest since 2020, rapid recovery ahead

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                                          ActionForex.com
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                                          Swiss KOF Economic Barometer rose to 117.8 in March, up from 102.7, well above expectation of 104.3. The index is now “as high as it was last in summer 2010”, signal a “rapid economic recovery for the coming months”.

                                          KOF said the improvement is “largely due to the indicators from the Swiss manufacturing industry”. The other groups of indicators, both for domestic and foreign demand, all signal a positive development, albeit significantly weaker.

                                          Full release here.

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