Market review- fundamental perspective- 02 April 2018

Muted Easter Trading With Bulk Of Europe Closed
Notes/Observations
Soybeans sow seeds of discontent in US and China’s trade war
Japan Q1 Tankan Survey showed that non-manufacturing business mood soured for first time in two years (Non-Manufacturing Index: 23 v 24e) Muted Easter trading with bulk of Europe closed (HK, Australia and New Zealand were also closed)
Asia:
China imposing new tariffs on 128 US products amounting to $3B including meat and fruit in response to US tariffs on steel and aluminum, effective Apr 1st (Note: A bigger dispute looms over Trump’s approval of possible higher duties on nearly $50 billion of Chinese goods). Commerce Ministry reiterated trade talks with US needed to happen in order to prevent greater damage to relationship.
China Mar Caixin PMI Manufacturing: 51.0 v 51.7e (lowest reading since Nov). Japan Mar Final PMI Manufacturing: 53.1 v 53.2 prelim. Japan Q1 Tankan Survey: Large Manufacturing Index: 24 v 25e; Large Manufacturing Outlook: 20 v 22e. Large Non-Manufacturing Index: 23 v 24e (1st decline in six quarters)
US and South Korea start scaled down annual military drills after month-long delay, no response from North Korea. Japan Feb Jobless Rate beat expectations but still registered its 1st rise in 9 months (2.5% v 2.6%e)> Jan reading was 2.4%
Europe:
9 members of Tory party said to back amendments to the legislation needed for Britain to leave the EU – including a parliamentary vote on staying in a customs union. Germany Fin Min Scholz said to seek provision to cushion the burden on the federal budget with the aspect of sharply rising interest rates. If the average rate of interest on federal debt only rose by one percentage point, it would also have to raise more than ten billion euros in debt service.

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