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Asia morning update

The start of the week marks the first trading day of the month and quarter, also kicking start an action-packed week with various items to keep watch of.

US trader
Source: Bloomberg

US non-farm payrolls, the meeting between the leaders of US and China, and US central bank March meeting minutes are some of the few items lined up ahead.

Global equities followed through the course of a month-end trade, broadly declining in the session. US stocks pared some gains on Friday, though still retaining returns of what would be a relatively stellar quarter. The financial sector on the comprehensive S&P 500 index had once again taken the hit, down 0.72%.

Notably, the energy sector slipped 0.37% in the session despite an apparent uptick in crude oil prices. WTI futures had climbed up further after hitting the $50 per barrel (bbl) mark on Thursday, ending the week above $50.50/bbl. Never mind that US rig counts remain on the 11th consecutive week of rise or that the CFTC commitment of traders report continue to show the decline in bullish positions, the expectation of an extension to the current OPEC agreement continue to enliven prices.

This morning also saw Japan’s Q1 Tankan, or short-term economic survey of enterprises, giving us a large manufacturer index figure of 12. This had been an improvement from the Q4 2016 figure of 10, but remain short of expectation at 14. Meanwhile large manufacturing outlook came in at 11, a 3 point increase from the last quarter, but once again falling short of the market consensus of 13. Large non-manufacturing and small manufacturing and non-manufacturing index had all managed to exceed expectations. The point here remains that Japanese enterprises are generally optimistic in their outlook, though USD/JPY had reacted according to expectations, taking a dip to $111.25 levels when last checked at 8.00am (Singapore time). 

Limited moves have been seen in the markets at the start of the week, though opening calls for Asian markets appear to be promising positive to neutral returns for Asian markets. Notably, China and Taiwan markets are closed for a market holiday on Monday. Over the weekend, China’s March Caixin manufacturing PMI had missed expectations at 51.2, creating some concern that the pickup in the manufacturing sector may be reversing. These remain early days to call it so, with the headline number still comfortably in expansion territory.

For the day ahead, Thailand’s and Indonesia’s March inflation rates will be due while both US and UK will also see the release of March PMI figures. Federal Reserve Bank members William Dudley and Patrick Harker will be on tap. The local Singapore market would find March PMI figures an interest with the mixed trend in China’s figures.

Friday: S&P 500 -0.23%; DJIA -0.31%; DAX +0.46%; FTSE -0.63%

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