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Here Is To A Better Second Quarter

Marc Chandler profile picture
Marc Chandler


  • The global capital markets have begun the new month and quarter on a good note.
  • The final German manufacturing PMI was unchanged from the flash reading of 66.6, but the other large EMU countries' reports were better than expected.
  • Ahead of tomorrow's holiday, during which the US will report monthly jobs data, there is a slew of economic reports.


The global capital markets have begun the new month and quarter on a good note. Equity markets are encouraged by yesterday's gains in the US. Most markets in the Asia Pacific region rallied, led by Hong Kong, even though earnings reports saw trading halted in around 50 companies. Europe's Down Jones Stoxx 600 is edging closer to last year's record high, and US futures are trading with a clear upside bias, led by the Nasdaq. Benchmark bond yields are a little softer, with the US 10-year yields around 1.71%. The dollar is mostly firmer, but the euro held the $1.1700 support. The greenback has remained below JPY111, which it approached yesterday. The Turkish lira, South African rand, and central/eastern European currencies are leading emerging market currencies higher. The JP Morgan Emerging Market Currency Index is posting back-to-back gains for the first time in three weeks. Gold is extending yesterday's recovery but has met resistance at $1720. As the market awaits the outcome of the OPEC+ meeting, May WTI is straddling the $60-level.

Asia Pacific

Japan's Tankan survey results were a bit better than expected. Sentiment among all businesses improved more than expected. This was particularly true of large manufacturers, where reading rose above zero for the first time since Q3 19. Small businesses are less pessimistic than they were. Capex plans were stronger, a 3% increase expected rather than a 1.4% decline. Separately, the March manufacturing PMI rose to 52.2 from 52.0 of the preliminary estimate and 51.4 in February. Taken together, investors and policymakers may be more a little more confident of a stronger Q2 after the virus-related state of emergency, earthquake, and fire at the chip factor depress growth in Q1. The BOJ announced it would reduce its JGB buying across the curve in April. It is not seen as tapering - a step towards removing some accommodation and making it more sustainable for longer.

This article was written by

Marc Chandler profile picture
Marc Chandler has been covering the global capital markets in one fashion or another for 25 years, working at economic consulting firms and global investment banks. A prolific writer and speaker he appears regularly on CNBC and has spoken for the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. In 2009 Chandler was named a Business Visionary by Forbes. Marc's commentary can be found at his blog (www.marctomarket.com) and twitter www.twitter.com/marcmakingsense

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