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Market Report 31st March 2020

Market Report 31st March 2020 981 980 Realm
U.S. stocks closed strong on Monday and futures are holding those gains this morning.
  • European stocks recovered gradually and gained in strength in late afternoon trades to eventually end the session on a firm note.  
  • US stocks moved sharply higher over the course of the trading largely offsetting the pullback seen last Friday. With the upward move on the day, the major averages added to the substantial gains posted last week.
  • Asian stocks  ended mixed on fears that the global economy has clearly entered recession due to the coronavirus pandemic.

Global Macro

  • The annual inflation rate in Germany is expected to slow to 1.4% in March 2020 from a near six-month high of 1.7% in the previous month and in line with market expectations, a preliminary estimate showed. Services prices should increase at a softer 1.4% (vs 1.6% in February), with rents cost continuing to advance (1.5% vs 1.4%), while energy prices are seen falling 0.9% (vs 2.0% in February). On the contrary, food inflation is likely to pick up to 3.7% from 3.3%.
  • The Official NBS Non-Manufacturing PMI jumped to 52.3 in March 2020 from a record low of 29.6 in a month earlier. This marked the highest reading snce January, amid positive result from the prevention and control of COVID-19 and a noticeable improvement in demand.
  • Japan’s retail sales unexpectedly rose 0.6% month-over-month in February 2020, after a 1.5% gin in the previous month and compared with market consensus of a 0.9% fall. Sales growth slowed for both others (2.2% vs 2.3% in January) and machinery & equipment (3.4% vs 4.7%).
  • Industrial production in Japan increased 0.4% month-over-month in February 2020 after a 1% gain in the previous month and compared to a 0.1% increase expected by consensus, preliminary data showed. Output contracted for motor vehicles (-2.4% vs 5.6% in January), business oriented machinery (-4.5% vs -2.6%), and production machinery (-2.2% vs 3.5%). In contrast, production rebounded for electrical machinery (0.8% vs -3%). On an annual basis, industrial output shrank 4.7% in February, the fifth straight month of drop as international activity decelerates and the coronavirus outbreak affects supply chains.
  • The Official NBS Manufacturing PMI in China surged to 52.0 in March 2020 from a record low of 35.7 in the previous month and easily beating market expectations of 45. This was the fastest growth in factory activity since September 2017, as the prevention and control of the coronavirus outbreak improved while the resumption of production accelerated significantly.   

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