Futures Higher On Strong Chinese Services Data
U.S. equity futures rallied in early pre-market trade following
stronger than expected data on China's services sector. The
official Non-Manufacturing PMI in China rose to 55.6 in March from
54.5 in February and the HSBC China Non-Manufacturing PMI rose to
54.3 in March from 52.1 in February. All in all, better data out of
China is creating a slight risk-on environment in equities.
In other news around the markets:
The Bank of Japan began its first policy meeting under its new
leadership and Governor Kuroda is expected to launch new rounds of
easing. Policy choices include abolishing the bank note rule,
combining the asset purchase programs, and purchasing longer-dated
JGB's in its programs. Eurozone inflation slowed to 1.7 percent in
March from 1.8 percent in February and was in line with
expectations. The cooling inflation does give the European Central
Bank room to ease tomorrow should it want to do so. Reserve Bank of
Australia chief Clenn Stevens was appointed to an additional
three-year term at the bank following his successful time in his
previous term. S&P 500 futures rose 2.7 points to 1,567.10. The
EUR/USD was slightly higher at 1.2831. Spanish 10-year government
bond yields fell to 4.9 percent from 4.94 percent. Italian 10-year
government bond yields fell to 4.59 percent from 4.62 percent. Gold
fell 0.53 percent to $1,570.30 per ounce.
Asian shares were mixed overnight as Japanese shares popped on
hopes of additional easing coming from the BoJ meeting. The
Japanese Nikkei Index rose 2.99 percent and the Shanghai Composite
Index fell 0.11 percent while the Hang Send Index fell 0.14
percent. Also, the Korean Kospi fell 0.15 percent and Australian
shares declined 0.56 percent.
European shares were mostly lower in early trade following the
inflation data which showed a continued slowdown in the economy.
The Spanish Ibex Index declined 0.38 percent and the Italian FTSE
MIB Index fell 0.54 percent. Meanwhile, the German DAX declined
0.13 percent and the French CAC slipped 0.38 percent while U.K.
shares fell 0.31 percent.
Commodities were significantly lower across the board overnight
after Credit Suisse issued a note slashing its price forecasts for
nearly all commodities on supply factors. WTI Crude futures slipped
0.39 percent to $96.90 per barrel and Brent Crude futures declined
0.43 percent to $110.29 per barrel. Copper futures slid 0.44
percent to $336.05 per pound. Gold was lower and silver futures
dropped 0.73 percent to $27.10 per ounce.
Currency markets were rather quiet overnight once again as the
yen resumed its sell-off and the Australian dollar continued to
strengthen. The EUR/USD was slightly higher at 1.2831 and the
dollar rose against the yen to 93.62. Overall, the Dollar Index
slipped 0.02 percent on weakness against the euro, the pound, the
Canadian dollar, and the Swiss franc. The Australian dollar was
also notably strong in overnight trade, rising 0.25 percent against
the greenback to 1.0476 and 0.43 percent to 98.0580 against the
Stocks moving in the pre-market included:
Cliffs Natural Resources (NYSE:
) shares rose 1.21 percent pre-market after analysts at J.P. Morgan
released a note on the company indicating that shares could double
in the next year. They rate the stock outperform. General Mills
) shares fell 0.84 percent pre-market in the wake of its downgrade
at Morgan Stanley on Monday. IBM (NYSE:
) shares slipped 0.63 percent pre-market after the company won a
new contract to build cloud computing systems for the Thai
government owned telecom company CAT. Caterpillar (NYSE:
) shares fell 0.59 percent on fears that sales in China will slow
as the manufacturing sector stagnates and also on fears that
commodity prices are set to drop.
Notable companies expected to report earnings Wednesday
ConAgra Foods (NYSE:
) is expected to report third quarter EPS of $0.57 vs. $0.51 a year
ago. Monsanto (NYSE:
) is expected to report second quarter EPS of $2.58 vs. $2.28 a
On the economics calendar Wednesday, the ADP Employment Report
is due out and should give a good preview of Friday's Non-Farm
Payroll Report and the ISM Non-Manufacturing Index is also
expected. In addition, MBA Purchase Applications are expected and
speeches from Fed members John Williams and James Bullard are
expected as well. Overnight, the Bank of Japan decision is expected
as well as Eurozone and British services PMI's and the BoE and ECB
Interest Rate Decisions should all move markets.
Good luck and good trading.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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