Asia

China's Factory Activity Show Further Contraction. China's manufacturing sector showed further contraction in March, according to a new report which mainly tracks activity in smaller factories. The HSBC Purchasing Managers' Index (PMI) gave a reading of 48.1 for March, compared to 48.5 in February. A reading below 50 indicates contraction, while one above 50 shows expansion. The HSBC survey focuses on smaller companies in the private sector. (BBC)

Americas

Manufacturing In U.S. Expands At Second-Highest Rate Since January 2013. The Markit Economics preliminary index of U.S. manufacturing decreased to 55.5 in March from 57.1 a month earlier, the London-based group said today. A reading above 50 indicates expansion. This month’s reading was the second-highest since January 2013. The median forecast in a Bloomberg survey of 19 economists was 56.5, with estimates ranging from 54 to 58. The group’s new-orders index declined to 58 from 59.6 in February. Employment also continued to grow at a slower pace in March. (Bloomberg)

Canada Consumer Sentiment Falls On Quebec Separation Talk. Canadian consumer confidence continued to decline last week as an election campaign in the French-speaking province of Quebec raises the prospect of a referendum on independence. The Bloomberg Nanos Canadian Confidence Index fell to 58.0 in the week ending March 21 from a prior reading of 58.4. Sentiment in Quebec dropped 1.1 points to 56.0 amid the campaign and with employment and inflation data suggesting the economy in the country’s second-most populous province is struggling. (Bloomberg)

Brazil’s Credit Rating Cut To BBB- By S&P On Sluggish Growth. Brazil’s credit rating was cut by Standard & Poor’s, which said sluggish economic growth and an expansionary fiscal policy are fueling an increase in the country’s debt levels. S&P downgraded the government one level to BBB-, its lowest investment-grade rating, from BBB. The new ranking is in line with countries including Spain and the Philippines and one notch below Russia. Yields on the country’s $2.15 billion of bonds due 2023 have climbed 1.01 %age point in the past year to 4.26 %, according to data compiled by Bloomberg. (Bloomberg)

Europe

Euro Area Survey Indexes Stay Close To Three-Year High. Growth in euro-area manufacturing and services stayed close to the fastest since 2011 in March as France improved, providing further evidence that the region’s recovery is on track. Indexes for both industries based on surveys of purchasing managers were little changed from February, London based Markit Economics Ltd. said in a statement today. A composite gauge slipped to 53.2 from 53.3 in February, matching the median forecast in a Bloomberg News survey of 26 economists. The index has been above 50, indicating expansion, since July. (Bloomberg)

G-7 Threatens Russia With More Sanctions, Scraps Sochi Summit. The world’s leading industrial powers threatened further sanctions to deter the Kremlin from invading other parts of Ukraine and boycotted what was to be a Group of Eight summit hosted by President Vladimir Putin. Meeting for the first time since last week’s annexation of Crimea by Russia, Group of Seven leaders said they won’t attend the planned G-8 meeting which was to have to been held in Sochi, site of the Winter Olympics, and will instead hold their own summit in June in Brussels. “We remain ready to intensify actions including coordinated sectoral sanctions that will have an increasingly significant impact on the Russian economy, if Russia continues to escalate this situation,” the G-7 said in a statement e-mailed after a meeting in The Hague today. (Bloomberg)

Currencies

Dollar Up Vs. Yen, Gives Up Euro Gains. The U.S. dollar edged higher against the yen Monday as traders appeared to shrug off further signs of slowing Chinese growth and tensions over Russia’s annexation of the Crimea region. The dollar fetched 102.24 yen, up from ¥102.15 in North American trade late Friday. But the euro recovered from earlier losses against the dollar, rising to $1.3838 $1.3796 late Friday. The British pound rose to $1.6499 from $1.6486. The Australian dollar rose to 91.31 U.S. cents from 90.81 U.S. cents late Friday, despite the weak Chinese data. The ICE dollar index, which measures the U.S. unit against a basket of six major rivals, fell to 79.923 from 80.089 late Friday. (Market Watch)

Commodities

Brent Crude Falls On Weak China Data In Volatile Trading. Brent crude oil fell and U.S. crude edged slightly higher in chopping trading on Monday as lackluster manufacturing data from the world's largest oil consumer was balanced by supply concerns over the Ukraine crisis and turmoil in Libya. Brent crude for May fell 11 cents to settle at $106.71 a barrel. The oil benchmark fell for a fourth straight week last week. U.S. crude oil rose 14 cents to settle at $99.60 a barrel. (Reuters)

Gold Drops 2 Pct On Fund Selling, US Rate Hike Fears. Gold prices tumbled about 2 % on Monday, the biggest oneday drop in nearly two months, as hedge funds dumped the precious metal on fears that rising U.S. interest rates could spark a further retreat from last week's six-month high. Spot gold was down 1.9 % at $1,308.70 an ounce at 2:57 p.m. EDT (1857 GMT), its biggest daily fall since Jan. Silver fell 1.6 % at $19.93 an ounce, dragged down by gold's sharp losses. Palladium hit its highest since August 2011 at $799.50 an ounce. The autocatalyst metal later edged up 0.2% at $790.90 an ounce. Platinum was down 0.5% at $1,424.25 an ounce. (Reuters)