The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
China’s March factory activity shrinks for the fourth month
Information is not investment advice
In China, in March, factory activity tumbled for a fourth straight month, in a sign that the Chinese economy is still losing steam. It contributed to fears about faltering global surge.
A dismal outcome, coming on the heels of the steepest dive in industrial gain for 7 years, would underline the necessity of greater stimulus as the Chinese government struggles to fix the national economy and resolve a bruising trade conflict with America.
The official Purchasing Managers' Index hit 49.5, soaring a bit from February's outcome of 49.2, although still below the 50 mark, which separates contraction from expansion on a monthly basis.
In March, seasonal factors probably drove the uptick in the factory indicator because factories increased activity after last month’s long Lunar New Year holidays. Besides this, some steel mills have also began to ramp up output as winter smog restrictions are over.
While weakness in the headline result is generally anticipated, policymakers and traders will probably focus on whether there’s any improvement in domestic orders responding to a series of surge boosting measures for the last time.
Export orders will probably stay weak because China's trade-oriented neighbors, including South Korea, Taiwan, and Japan have all faced decelerating demand.
Tit-for-tat levies slapped by China and America remain in place as they keep negotiating their trade issues. However, with the everlasting trade conflict, which has disrupted the flow of billions of dollars of goods between the two leading economies, no one knows for sure whether an agreement acceptable to the partners can be made or not.
On Wednesday, US statesmen told that China and America have achieved progress in all negotiated areas.
The market sentiment switched to risk-off after the Fed’s Powell statement. The USD edged higher, while risker assets started falling after reaching quite high levels. Let’s have a closer look.
The overall market sentiment is mixed as investors await the Federal Reserve’s statement today at the evening.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
The US NFP will be published on August 7 at 15:30 MT time.
The RBA will make a rate statement on August 4 at 7:30 MT time.