31stMarch 2024Sunday On Sunday, asignificant announcement is...

31^stMarch 2024

Sunday

On Sunday, asignificant announcement is expected from China with the unveiling of itsManufacturing Purchasing Managers' Index (PMI), an event poised to have aconsiderable impact on the market due to its insights into the health andtrajectory of the Chinese manufacturing sector. Accompanying this, China'sNon-Manufacturing PMI and Japan's Tankan Large Manufacturers Index for Q1 willalso be released, both anticipated to have a moderate effect on the markets.These indicators are crucial as they provide a comprehensive view of theeconomic activities within China and Japan, covering both the manufacturing andservices sectors, and are keenly awaited for their potential influence onglobal economic dynamics.

CNY – Manufacturing PMI

TheManufacturing Purchasing Managers' Index (PMI) is a crucial economic indicatorderived from a monthly survey of 3,000 purchasing managers in the manufacturingsector. Released on the last day of each month, the PMI provides insights intothe industry's health, with a score above 50 indicating expansion and below 50signaling contraction. Its significance is amplified when released before theCaixin Manufacturing PMI due to their close correlation. Given China'ssignificant role in the global economy, this data can greatly influencecurrency markets and investor sentiment. The PMI is valued for its immediacyand relevance, offering a glimpse into business conditions, includingemployment, production, orders, prices, deliveries, and inventories, thusserving as a leading indicator of economic health.

In February,China's factory activity contracted for the fifth consecutive month, with theofficial manufacturing purchasing managers index (PMI) at 49.1, indicatingcontinued weakness in the country's demand affecting manufacturers across Asia.Despite this, the Caixin PMI, which focuses on smaller firms in China, showedan improvement to 50.9. Across North Asia, countries like Taiwan and Japanexperienced declines in their PMIs due to reduced domestic and internationalcustomer spending, with Taiwan's PMI at 48.6 and Japan's at 47.2, bothindicating contraction in manufacturing. Southeast Asian nations also facedchallenges, with Thailand's PMI dropping to 45.3 and only Indonesia, thePhilippines, and Vietnam recording PMIs above 50. The region is grappling withrising inflationary pressures and tepid demand, making it difficult formanufacturers to pass on the increased costs of raw materials. This downturn inmanufacturing activity comes amid the World Trade Organization's warnings ofweaker global trade performance, influenced by economic headwinds and theresurgence of protectionism.

TL;DR

	Country/Region	PMI Score	Trend	Notes
1	China (Official)	49.1	Contracting	5th consecutive month of contraction.
2	China (Caixin)	50.9	Expanding	Focuses on smaller firms; shows improvement.
3	Taiwan	48.6	Contracting	Decline due to reduced spending domestically and internationally.
4	Japan	47.2	Contracting	Decrease in PMI linked to lower domestic and international spending.
5	Thailand	45.3	Contracting	Facing economic challenges.
6	Indonesia	>50	Expanding	One of the few Southeast Asian nations with PMI above 50.
7	Philippines	>50	Expanding	Recording PMIs above 50, indicating expansion.
8	Vietnam	>50	Expanding	PMI above 50, showing manufacturing growth.
9	Southeast Asia	-	Mixed	Rising inflation and tepid demand impacting the region.
10	Global Context	-	-	Weaker global trade performance due to economic headwinds and resurgence of protectionism.

The forecast forManufacturing PMI is expected to reach 50.1, indicating apositive shift from the previous reading of 49.1.

The upcoming Manufacturing PMI isscheduled for Sunday at 1:30 AM GMT.

The last time,the Chinese Manufacturing PMI wasannounced on the 1^st of March, 2024. You may find the marketreaction chart (USDCNH M5) below:

CNY - Non-Manufacturing PMI

TheNon-Manufacturing Purchasing Managers' Index (PMI) measures the level of adiffusion index based on surveys of purchasing managers in the servicesindustry. It is released monthly, typically on the last day of the month. Areading above 50.0 indicates industry expansion, while below 50.0 suggestscontraction. Chinese data can significantly influence currency markets due toChina's global economic impact and its effect on investor sentiment. The indexshifted from non-seasonally adjusted to seasonally adjusted data starting inApril 2012. Traders closely monitor this index because it serves as a leadingindicator of economic health. As businesses react swiftly to market conditions,the insights provided by purchasing managers regarding employment, production,new orders, prices, supplier deliveries, and inventories offer valuablereal-time information about the economy's status.

In February, thenon-manufacturing Purchasing Managers' Index (PMI) for China rose to 51.4percent, marking a notable increase of 0.7 percentage points compared to theprevious month. This surpassed market expectations of 50.8, showcasing the 14thconsecutive month of expansion in services activity and the strongest pacesince September of the previous year. Despite a softer decline in foreign sales(47.3 versus 45.2 in January) and unchanged employment rates (47.0 versus47.0), new orders experienced a further deterioration (46.8 versus 47.6),dampening hopes for increased domestic demand during the Spring Festivalcelebration. Additionally, the delivery time index decreased from January'sthree-month high (50.3 versus 52.0). Input costs saw a rise after declining forfour consecutive months (50.6 versus 49.6), while selling prices decreased forthe fifth month in a row (48.5 versus 48.9). Finally, sentiment softened forthe second consecutive month (57.7 versus 59.7).

TL;DR

	Metric	February Score	Change from January	Notes
1	Non-manufacturing PMI	51.4	+0.7	14th consecutive month of expansion; strongest since last September.
2	Market Expectations	-	-	Surpassed expectations of 50.8.
3	Foreign Sales	47.3	+2.1	Softer decline compared to January.
4	Employment	47.0	No change	Remained unchanged from January.
5	New Orders	46.8	-0.8	Further deterioration, affecting hopes for increased domestic demand.
6	Delivery Time Index	50.3	-1.7	Decreased from January's three-month high.
7	Input Costs	50.6	+1.0	Increased after declining for four consecutive months.
8	Selling Prices	48.5	-0.4	Decreased for the fifth consecutive month.
9	Sentiment	57.7	-2.0	Softened for the second consecutive month.

The forecast forNon-Manufacturing PMI stands at 51.3, showing a slight decreasefrom the previous outcome of 51.4.

The upcoming Non-Manufacturing PMIis scheduled for Sunday at 1:30 AM GMT.

JPY - Tankan Manufacturing Index

The TankanManufacturing Index, released quarterly, is a crucial diffusion index based ona survey of approximately 1,200 large manufacturers in Japan, where valuesabove 0.0 signify improving conditions. Esteemed for its comprehensive samplesize and the credibility of its source, which updated its calculation methodologyin April 2004, this index is regarded as the premier indicator of themanufacturing sector's health in the Japanese economy. Traders value this indexhighly as it serves as a leading indicator of economic vitality, reflectingbusinesses' rapid responses to market conditions and providing early insightsinto potential shifts in economic activities like spending, hiring, andinvestment.

In Q4 2023, theBank of Japan's Tankan index for large manufacturers surged to 12, marking thehighest level since Q1 2022 and surpassing the market expectations of 10,indicating a robust uptick in business confidence across various sectors.Notably, firms in the pulp & paper, ceramics, iron & steel, and motorvehicles sectors showed significant improvement in sentiment, with some sectorslike non-ferrous metals and processed metals rebounding from negative topositive territory. However, the mood was stable in the petroleum & coalproducts sector and showed a slight decline in chemicals, business-orientedmachinery, and shipbuilding & heavy machinery, with a notable downturn inlumber & wood products. Alongside the positive sentiment, large firms aresetting ambitious plans, projecting a 13.5% increase in capital expenditure forthe current fiscal year ending in March 2024, which is higher than theforecasted 12.4% and reflects a continuation of strong investment trends fromthe previous year.

TL;DR

	Sector	Sentiment Change	Notes
1	Overall Large Manufacturers	Increase	Tankan index surged to 12, highest since Q1 2022.
2	Pulp & Paper	Significant Improvement	Part of sectors with notable sentiment improvement.
3	Ceramics	Significant Improvement	Included in sectors with enhanced business confidence.
4	Iron & Steel	Significant Improvement	Demonstrated significant improvement in sentiment.
5	Motor Vehicles	Significant Improvement	Showed notable uplift in sentiment.
6	Non-Ferrous Metals	From Negative to Positive	Rebounded to positive sentiment territory.
7	Processed Metals	From Negative to Positive	Transitioned from negative to positive sentiment.
8	Petroleum & Coal Products	Stable	Sentiment remained unchanged, indicating stability.
9	Chemicals	Slight Decline	Experienced a minor downturn in sentiment.
10	Business-Oriented Machinery	Slight Decline	Showed a small decrease in business confidence.
11	Shipbuilding & Heavy Machinery	Slight Decline	Sentiment dipped slightly.
12	Lumber & Wood Products	Notable Downturn	Faced a significant decline in sentiment.

The forecast predicts a figure of 10,compared to the previous result of 12.

The next Tankan Manufacturing Indexis set to be released on Sunday at 11:50 PM GMT.

1^stApril 2024

Monday

On April 1st,a crucial day for international financial markets, the focus will be on thehigh-impact release of the US ISM Manufacturing PMI, a key indicator of thehealth of the United States' manufacturing sector and a potential influencer ofglobal economic policies and market sentiments. Alongside this, medium-impactannouncements will be observed, including China's Caixin Manufacturing PMI,offering insights into its manufacturing industry, and the ISM ManufacturingPrices from the US, signaling potential inflationary pressures. Also, theS&P Global Manufacturing PMI from Canada and Judo Bank Manufacturing PMIFinal from Australia will be under scrutiny by investors and policymakers fortheir implications on the economic outlook and policy decisions in therespective countries, especially in the nuanced post-pandemic economiclandscape.

CNY - Caixin Manufacturing PMI

The CaixinManufacturing Purchasing Managers' Index (PMI) is a crucial indicator ofeconomic health within the manufacturing sector, derived from monthly surveysof around 500 purchasing managers. These surveys gauge various aspects ofbusiness conditions such as employment, production, new orders, prices,supplier deliveries, and inventories. A PMI score above 50 signals industryexpansion, while a score below 50 indicates contraction. Between February 2011and September 2015, there were two versions of the report: Flash and Final,with the 'Previous' figure during this period referring to the 'Actual' figurefrom the Flash release, leading to seemingly disjointed historical data.Traders pay close attention to this index as it provides early insights intothe sector's economic health, reflecting the responsive nature of businesses tochanging market conditions through the lens of their purchasing managers.

In February2024, the Caixin China General Manufacturing PMI reported a marginalimprovement to 50.9 from 50.8 in January, marking the fourth consecutive monthof growth in the manufacturing sector. This slight uptick was driven byaccelerated growth in production, domestic, and overseas demand, with newexport orders reaching a 12-month high. Despite these positive trends, themanufacturing employment index declined for the sixth consecutive month,indicating ongoing job market contraction as firms continued to prioritize costreduction and efficiency. Input cost inflation eased to a seven-month low, andin response to intense market competition, manufacturers reduced their sellingprices for the second month in a row. Although supplier logistics faced minordelays due to adverse weather conditions, optimism in the sector rose, withfuture output expectations reaching their highest level since April 2023. Thedata reflects a sustained but cautious recovery in China's manufacturingsector, with ongoing challenges such as deflationary pressures and insufficientdemand.

TL;DR

• Caixin China General Manufacturing PMI slightly rose to 50.9 in February 2024, marking the fourth consecutive month of sector growth.
• The increase was fueled by faster production and demand growth, both domestically and internationally, with new export orders hitting a 12-month peak.
• Manufacturing employment fell for the sixth straight month, highlighting ongoing job market shrinkage amid cost-cutting measures.
• Input cost inflation decreased to a seven-month low, and manufacturers lowered selling prices due to intense competition.
• Minor supplier delivery delays occurred due to adverse weather, yet sector optimism reached its highest since April 2023, signaling cautious recovery.

The upcoming Caixin Manufacturing PMIis set to be released on Monday at 1:45 AM GMT.

The anticipated CaixinManufacturing PMI is projected at 51, showing a slight increase fromthe previous figure of 50.9.

CAD - S&P GlobalManufacturing PMI

TheManufacturing Purchasing Managers Index (PMI), issued monthly by S&PGlobal, serves as a crucial barometer for Canada's manufacturing sector,relying on surveys from senior executives in the private sector to gaugebusiness activity. These responses, indicating month-over-month changes, helppredict shifts in key economic indicators like GDP, industrial output,employment, and inflation. The PMI operates on a scale from 0 to 100, where areading above 50 signifies expansion in the manufacturing sector, potentiallybolstering the Canadian Dollar (CAD), while a score below 50 suggestscontraction, which could negatively affect the CAD's value.

In February2024, the S&P Global Canada Manufacturing PMI inched closer tostabilization, registering at 49.7, up from 48.3, signaling the smallestdecline in factory activity over ten months. This modest uplift was attributedto a less pronounced reduction in new orders, despite ongoing concerns aboutweak client demand leading to a slight decrease in output and continuedreliance on inventory due to insufficient orders. Elevated input costs furtherexacerbated the situation, leading to higher input inflation and extendedsupply chain lead times. However, in a positive turn, the manufacturing sectorsaw job growth for the first time in four months. Companies remain optimistic,anticipating that a better economic environment in the near future will boostsales.

TL;DR

	Metric	February 2024 Value	Change from Previous Month	Notes
1	S&P Global Canada PMI	49.7	+1.4	Smallest decline in factory activity in ten months.
2	New Orders	-	Less pronounced reduction	Despite weak client demand, the decline in new orders eased.
3	Output	-	Slight decrease	Output dropped slightly due to weak demand.
4	Inventory Usage	-	Continued reliance	Firms relied on inventory due to insufficient orders.
5	Input Costs	-	Increase	Elevated input costs led to higher input inflation.
6	Supply Chain Lead Times	-	Extended	Input cost rise resulted in longer supply chain lead times.
7	Employment	-	Growth	First job growth in the sector in four months.
8	Business Optimism	-	-	Companies optimistic about a better economic environment.

The forecast forthe S&P Global Manufacturing PMI suggests an improvement to 50.3,up from the previous figure of 49.7.

The next release of the S&P GlobalManufacturing PMI is set for Monday at 1:30 PM GMT.

USD - ISM Manufacturing PMI

The ISMManufacturing PMI is a crucial economic indicator derived from a monthly surveyof approximately 300 purchasing managers in the manufacturing industry.Released on the first business day following the end of the month, it measuresthe level of a diffusion index based on these managers' perspectives on variousbusiness conditions such as employment, production, new orders, prices,supplier deliveries, and inventories. A reading above 50.0 signals industryexpansion, while below 50.0 suggests contraction. Traders and analysts closelymonitor this index as it serves as a leading indicator of economic health,reflecting the quick adjustments businesses make in response to changing marketconditions, and offering insights into the companies' views on the economythrough the lens of those who are possibly the most informed on currentbusiness trends - the purchasing managers.

In February2024, the US manufacturing sector continued its contraction for the 16thconsecutive month, as indicated by the Manufacturing ISM Report On Business.The Manufacturing PMI dipped to 47.8, marking a decline in economic activitywithin the sector. This contraction is attributed to a slowdown in new ordersand production, alongside a decrease in employment levels. Despite thesechallenges, there were some positive developments, such as a slight increase insupplier deliveries and a growth in exports and imports, indicating someresilience in the sector. Notably, industries such as Fabricated MetalProducts, Chemical Products, and Transportation Equipment showed growth,highlighting pockets of strength amidst the overall contraction. The reportunderscores the nuanced dynamics within the manufacturing landscape, with signsof potential recovery in demand and a cautious optimism for the future, despitethe prevailing headwinds.

TL;DR

	Metric	February 2024 Value	Trend	Notes
1	Manufacturing PMI	47.8	Contracting	16th consecutive month of contraction in the manufacturing sector.
2	New Orders	-	Decrease	Slowdown contributing to overall sector contraction.
3	Production	-	Decrease	Reduction in production levels.
4	Employment	-	Decrease	Decline in employment levels within the sector.
5	Supplier Deliveries	-	Increase	Slight improvement, indicating some sector resilience.
6	Exports & Imports	-	Growth	Indicating pockets of strength despite overall contraction.
7	Growing Industries	-	-	Fabricated Metal Products, Chemical Products, and Transportation Equipment show growth.
8	Overall Outlook	-	Cautiously Optimistic	Signs of potential recovery with cautious optimism for the future.

The upcoming ISM Manufacturing PMIis set to be announced on Monday at 2:00 PM GMT.

The forecast for ISM Manufacturing PMI isexpected to rise slightly to 48.5, up from the previous figure of 47.8.

The last time, US ISM Manufacturing PMIwas announced on the 1^st of March, 2024. You may find the marketreaction chart (XAUUSD M5) below:

USD – ISM Manufacturing Prices

The ISMManufacturing Prices index is a key component of the broader PurchasingManagers’ Index (PMI), specifically focusing on the price level for goods andservices within the manufacturing sector. It is based on a survey of around 300purchasing managers, who are asked to provide their insights on the relativelevel of prices paid. Released monthly on the first business day after themonth ends, this diffusion index serves as a significant gauge of inflationwithin the manufacturing industry. A reading above 50.0 indicates that pricesare rising, while a figure below 50.0 suggests falling prices. Traders andeconomic analysts pay close attention to this index as it acts as a leadingindicator of consumer inflation, reflecting the tendency for businesses to passon higher costs to consumers, thereby influencing overall economic conditionsand monetary policy decisions.

In February2024, the Manufacturing ISM Report On Business indicated that the Prices Index,which measures the cost dynamics within the manufacturing sector, registered at52.5, experiencing a slight decline of 0.4 percentage points from January’s52.9. Despite the overall contraction in the manufacturing sector, with theManufacturing PMI standing at 47.8, the Prices Index remaining above 50suggests that prices are still increasing, albeit at a slower pace. Thismoderation in price increases reflects the ongoing adjustments within themanufacturing sector, amidst broader economic activities that continue to expandand varied performance across different manufacturing industries.

TL;DR

• Prices Index at 52.5, down 0.4 points from January, indicating slower price increases.
• Manufacturing PMI at 47.8, showing ongoing sector contraction.
• Despite contraction, some manufacturing industries perform variably, reflecting broader economic activity.

The next ISM Manufacturing Prices isscheduled for release on Monday at 2:00 PM GMT.

The forecast for ISM ManufacturingPrices suggests a slight increase to 52.8 from the previous outcomeof 52.5.

AUD - Judo Bank Manufacturing PMI

The Judo BankAustralia Manufacturing PMI, compiled by S&P Global, is derived frommonthly surveys sent to approximately 400 manufacturing purchasing managers,with the headline Purchasing Managers' Index (PMI) being a composite measurereflecting the weighted average of five key indices: New Orders (30%), Output(25%), Employment (20%), Suppliers' Delivery Times (15%, inverted to aligndirectionally with other indices), and Stocks of Purchases (10%). The PMI scaleranges from 0 to 100, where readings above 50 signify expansion and those below50 denote contraction in the manufacturing sector compared to the precedingmonth.

The Judo BankFlash Australia Manufacturing PMI dropped to 46.8 in March from 47.8 inFebruary, marking the most significant contraction in the manufacturing sectorsince May 2020, flash estimates reveal. This decline was primarily fueled by asubstantial decrease in new orders, which consequently led to a markedreduction in production levels. Facing dwindling demand, manufacturers haveresponded by reducing their workforce, scaling back on purchases, and trimminginventory levels. Additionally, price pressures have softened, evidenced bylower inflation rates for both input costs and output prices. Furthermore, theoverall business outlook has dimmed, reaching its lowest level of optimismsince November 2023, amid growing concerns over high interest rates andchallenging economic conditions impacting demand.

TL;DR

• Judo Bank Flash Australia Manufacturing PMI fell to 46.8 in March from February's 47.8, the largest contraction since May 2020.
• Sharp decrease in new orders led to significant production cuts.
• Manufacturers reduced workforce, cut purchases, and trimmed inventories due to falling demand.
• Price pressures eased, with lower inflation for input costs and output prices.
• Business optimism hit its lowest since November 2023, with concerns over high interest rates and tough economic conditions.

The projected JudoBank Manufacturing PMI stands at 46.8, reflecting a decline from theprevious figure of 47.8.

The upcoming Judo Bank Manufacturing PMIis set to be published on Monday at 10:00 PM GMT.