Published: Wed, April 03, 2019
Markets | By Otis Pena

China manufacturing index turns positive

China manufacturing index turns positive

A fresh wave of global risk-on trade, supported by upbeat Chinese data, was seen weighing on the precious metal's relative safe-haven status. Zinc declined close to 0.6%, copper, lead and aluminium slid 0.3% and tin dipped 0.06%. U.S. West Texas Intermediate (WTI) futures rose 32 cents, or 0.5 percent, to $60.46 barrel. On the contrary, economists polled by Reuters had anticipated that spending would fall 0.2%.

A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction. March's reading was "broadly in line with" the flash figure of 52.5.

Additionally, an increase in construction spending further states that the U.S. economy is still growing. Though the rate of increase was fractional, Caixin said the broad trend appeared to have steadied in the first quarter.

Separate data from the Commerce Department on Monday showed that United States retail sales dropped 0.2% in February, missing the forecasts of an increase of 0.3% in February as households lowered purchases of furniture, clothing, food and electronics and appliances, as well as building materials and gardening equipment.

Sterling took its latest knock after British lawmakers rejected Prime Minister May's Brexit deal for a third time on Friday, sounding its probable death knell and leaving the country's withdrawal from the European Union deeper in turmoil.

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After the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) survey released on Monday (1 April), it was announced that the sector has risen to 50.8 up from 49.9 the previous month.

"Overall, with a more relaxed financing environment, government efforts to bail out the private sector and positive progress in Sino-U.S. trade talks, the situation across the manufacturing sector recovered in March", said Zhengsheng Zhong, director of macroeconomic analysis at investment research firm CEBM Group.

The composite PMI, which covers both manufacturing and services activity, rose up 1.6 percentage points to 54 in March, showing a faster expansion in companies' business operation. Output also grew for the second straight month.

"Data from the National Bureau of Statistics showed unemployment in urban areas for February was the highest since early 2017, causing concerns about the job market".

"The Caixin China General Manufacturing PMI came in at 50.8 in March, up from 49.9 in the previous month, indicating a notable improvement in the manufacturing industry".

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