Asia markets rise as oil rises after surprise OPEC+ cuts; investors digest factory data

26 minutes ago

South Korea sees steepest decline in factory activity in six months: S&P Global

South Korea’s March PMI fell to 47.6 compared with 48.5 in February, the steepest decline in six months.

A PMI number above 50 indicates expansion, while a number below 50 indicates contraction.

According to a private survey by S&P Global, the March data indicated an eleventh consecutive monthly decline in output at Seoul̵[ads1]7;s manufacturers.

South Korea also recorded a decline in industrial production for February, mainly led by semiconductor companies.

The surveyed members largely attributed the decline to subdued domestic and external demand, while S&P Global also noted that continued economic weakness and poor customer confidence had put downward pressure on sales.

— Lim Hui Jie

An hour ago

China’s Caixin manufacturing PMI misses estimates

China’s Caixin/Markit Manufacturing Purchasing Managers’ Index for March was 50, missing estimates of 51.7 from economists polled by Reuters.

The reading for March fell from 51.6 sets in February, which was above the 50 level that separates growth from contraction.

China’s official PMI for March was 51.9, higher than expectations of 51.5 in a Reuters poll.

– Jihye Lee

An hour ago

Australia’s building approvals rose 4% in February

Australia’s building approvals rose 4% month-on-month in February, government data showed on Monday.

Approved dwellings in the private sector rose 11.3% in February, while dwellings in the private sector excluding houses fell 9.5%. The value of total buildings rose 19.7% and the value of commercial buildings rose 39.8%.

Year-on-year, building approvals fell 31.1%.

– Jihye Lee

An hour ago

ASEAN factory activity is picking up again even as the growth rate slows

The ASEAN region recorded its 18th consecutive month of growth in its manufacturing sector, according to a private survey by S&P Global.

The region’s manufacturing purchasing managers’ index was 51, a slight drop from February’s figure of 51.5.

S&P Global noted that this was due to further improvement in operating conditions in four of the seven ASEAN components, with Myanmar leading growth for the first time in 32 months. The country’s PMI reached a record high of 55.5 in March.

Thailand and the Philippines rounded out the top three in the region with March PMI figures of 53.1 and 52.5 respectively. Vietnam came in worst with a PMI of 47.7 in March.

— Lim Hui Jie

An hour ago

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An hour ago

Factory activity in Japan shows a softer decline in five months

Japan’s manufacturing purchasing managers’ index rose to 49.2% for March, higher than February’s figure of 47.7%, according to a private survey by au Jibun bank.

Despite still being in contraction territory for a fifth consecutive month, the bank said this was “a softer deterioration in the overall health of the Japanese manufacturing sector. The negative reading was only mild, and the softest in the current five-month sequence.”

A PMI reading above 50% indicates expansion, while a reading below 50 indicates contraction in the sector.

The survey said a contributing factor to the PMI reading below 50 was a further decline in manufacturing levels.”The decline was only modest and reportedly a result of weak customer demand.”

— Lim Hui Jie

2 hours ago

Oil futures open higher after OPEC announces surprise cuts

Oil futures rose as much as 8% at the open after OPEC+ members announced they would cut a total of more than 1 million barrels per day to extend to the end of 2023.

Brent crude futures were last up 5.98% at $84.67 a barrel, and US West Texas Intermediate crude futures (WTI) rose 6.04% at $80.24 a barrel.

This comes after oil prices rallied last week and saw a week-to-date gain of more than 9%.

The latest announcement is “an unwelcome start to the new week for risk markets and policymakers still dealing with sticky inflation and the fallout from the recent banking crisis,” IG’s Tony Sycamore said in a Monday note.

The National Australia Bank added that the unexpected announcement was likely to add pressure to European economies, where core inflation rose slightly last month.

Fri Mar 31, 2023 3:05 PM EDT

The Fed’s Williams says the banking crisis will play a role in the assessment of the next rate hike

New York Federal Reserve President John Williams said on Friday that the central bank is steadfast in its commitment to bring down inflation, but is watching what is happening in the financial world.

In a speech in Connecticut, Williams said inflation “remains a major concern” and noted that the Fed must “use its monetary policy tools to bring inflation down.”

However, he noted some of the recent turmoil in the banking system and indicated that he will monitor the situation closely.

“I will be particularly focused on assessing developments in credit conditions and their effects on the outlook for growth, employment and inflation,” he said.

-Jeff Cox

Fri Mar 31, 2023 9:46 AM EDT

Gold on pace for best month since 2020

Gold is about to post a monthly gain not seen in more than two years.

With only Friday’s session left in the March trading month, gold is on pace to finish 9% higher. That would be the best monthly performance since July 2020, when the metal rose 10.3%

If a Friday selloff pushes the monthly advance below 7.8%, March will instead be the metal’s best month since May 2021.

Gold prices were stable early Friday.

—Alex Harring, Gina Francolla

Fri Mar 31, 2023 8:38 AM EDT

Bullish inflation reading

Futures got a boost after an inflation gauge followed by the Federal Reserve came in easier than expected. The price index for personal consumption expenditures excluding food and energy rose 0.3 percent for the month, the Commerce Department reported Friday. That was below the Dow Jones estimate of 0.4% and lower than the increase in January.

-John Melloy, Jeff Cox

Fri Mar 31, 2023 7:24 AM EDT

Bank loans from the Fed’s emergency programs decreased

Emergency loans at the Federal Reserve’s discount window fell last week, raising some hope that the banking crisis may be returning.

Prime lending totaled $88.2 billion while banks took out $64.4 billion through the Fed’s new Bank Term Funding Program, according to Fed data released Thursday covering the period 22-29. March.

The total of $152.6 billion was slightly down from $164 billion the previous week. The Fed introduced the BTFP and relaxed the discount window rules after the implosion of Silicon Valley Bank and Signature Bank in early March.

Banks generally do not like the use of the discount window, as it signals that they are under stress and cannot raise capital in the private market.

-Jeff Cox

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