Written Commentary
Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist
Manufacturing PMIs and Japan Q1 Tankan dominate data schedule at start of new quarter; US Auto Sales and Construction Spending also due; OPEC+ meeting, some Fed speakers as markets digest Biden “American Jobs Plan” and wind down for Easter holiday break
Manufacturing PMIs: strength seen across the board, echoed in Japan Tankan survey, but China dip mars picture
US Auto Sales seen recovering from February weather related setback
EVENTS PREVIEW
The final trading day for much of the world ahead of the Easter holiday break also sees the start of a new quarter, with many all too familiar uncertainties about the economic outlook still cast a long shadow along, while the reality of central bank financial repression continues to force investor hands towards chasing risk in the hunt for better returns than the abject ones on ‘risk free’ assets. The data schedule is primarily about Manufacturing PMIs, digesting Japan’s Q1 Tankan and South Korea’s Trade data, with US Auto Sales and Construction Spending also on the agenda. The OPEC+ meeting on April Production levels, which is expected to rollover current production levels for one if not two months (including the voluntary Saudi output cut) is accompanied by some Fed speak, as part I of Biden’s infrastructure spending and tax plans are digested and debated. The real test on the latter is whether the unity shown by the Democrats in passing the $1.9 Trillion Covid relief package proves durable, above all given a good deal of divergence between centre and left wing groupings on what should be targeted.
Manufacturing PMIs will be of interest to see if the robust strength in G7 Manufacturing readings is echoed more broadly around the world, with the readings from Asia proving mixed, with strength in Japan (also evident in the better than expected Q1 Tankan) and South Korea offset by a dip in China’s Caixin reading to 50.6 from 50.9, in contrast to the pick-up in the official NBS reading (51.9 vs. Feb 51.2). US Auto Sales are expected to rebound to a 16.40 Mln SAAR pace (Feb 15.67 Mln), as February’s weather effects on a broad swathe of monthly indicators are unwound, and in turning pointing to a rebound in Retail Sales.
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