This week began with disappointing Purchasing Managers’ Index numbers that changed the market sentiment, especially after last Friday’s slower-than-expected PCE Price Index.
In Europe, the final value of the manufacturing PMI for March in France at 47.3 missed the 47.7 estimates. The Eurozone and Germany rose to 47.3 (previously 47.1) and 44.7 (previously 44.4), but again less than estimates. Other members, such as Italy and Spain’s manufacturing PMI also weak but remained above the expansion level, respectively 51.1 (previously 52.0) and 51.3 (previously 50.7).
The manufacturing PMI released by the US Markit and ISM also performed worse than expected. The Market PMI was down slightly to 49.2 from 49.3 expectations, but higher than a month ago. The ISM final number recorded was 46.3, down from 47.7 in February and 47.5 expectations. The sub-data show that except for the output index, which rose slightly to 47.8 (previously 47.3), all other indexes fell, including the price payment index (49.2, previously 51.3), the employment index (46.9 (a record low since August 2020), previously 49.1), inventory index (47.5 (a new low since April 2021), previous 50.1) and new orders index (44.3, previous 47.0).
These data increase market concerns and sentiments about recession and raise the hopes of an earlier pause or end of the central banks’ rate hike cycle. US Treasury Yields fell with 10-year bond Yields to 3.42%. With lower yields, the USD index also fell under the 102 level. Gold rose with the Weaker US dollar, but fewer market risks increased the stock demands and put gold in a less interested position.