Market Watch: China Growth Surge, Japan Confidence Slips

Asian markets show mixed sentiment: China surge – based on positive economic data, while Japan slips amid waning business confidence.

Global Markets

• Asian Stock Markets: Nikkei up 1.31%, Shanghai Composite down 1.07%, Hang Seng up 1.02%, ASX up 0.99%
• Commodities: Gold at $2282.5 (1.95%), Silver at $25.37 (1.62%), Brent Oil at $87.03 (0.25%), WTI Oil at $83.45 (0.34%)
• Rates: U.S. 10-year yield at 4.19, U.K. 10-year yield at 3.856, Germany 10-year yield at 2.297

News & Data

• (USD) Core PCE Price Index m/m: 0.3% vs 0.3% expected

Market Watch: China Growth Surge, Japan Confidence Slips

Markets Update

Monday saw diverging fortunes in Asian markets, with China’s stocks soaring while Japan experienced a modest decline.

China’s Surge: Investors in China were buoyed by positive economic indicators, with manufacturing activity expanding in March. The Purchasing Managers Index (PMI) reaching 50.8 exceeded expectations, signaling growth in the sector. The Caixin Global manufacturing survey further corroborated this growth, reporting China’s factory activity at its fastest pace in 13 months, with the private PMI hitting 51.1. Consequently, China’s CSI 300 index surged by approximately 1.6%.

Japan’s Slip: In contrast, Japan witnessed a slight setback as business confidence dipped. The first-quarter Tankan survey revealed a drop in optimism among large manufacturers, although non-manufacturers saw an increase in optimism, surpassing expectations. The Tankan survey, a vital measure of business sentiment monitored by the Bank of Japan, influences monetary policy decisions. As a result, Japan’s Nikkei 225 fell by 1.3%, trading below the 40,000 mark, and the broader Topix index declined by 1.9%.

In other Asian markets, South Korea’s Kospi index experienced a modest uptick of 0.27%, while the small-cap Kosdaq index gained 0.97%. Meanwhile, Australian and Hong Kong markets remained closed for Easter Monday.

In the U.S., February’s inflation figures met expectations on Good Friday. The Personal Consumption Expenditures (PCE) price index, excluding food and energy, rose by 2.8% over the 12 months and by 0.3% from the previous month. The headline PCE reading, including volatile food and energy costs, showed a 0.3% increase for the month and a 2.5% increase over the 12 months, aligning with estimates.

Upcoming Events

• 2:00 PM GMT – USD ISM Manufacturing PMI
• 2:00 PM GMT – USD ISM Manufacturing Prices
• 2:00 PM GMT – USD Construction Spending m/m

The markets remain attentive to upcoming data releases and geopolitical developments as they navigate the varying sentiments across global economies.

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