Asia

Developing Asia To Withstand China Slowdown In 2015, ADB Says. Emerging Asia’s economic growth will probably accelerate in 2015 from this year, helped by increasing momentum in developed nations and withstanding a slowdown in China’s expansion, according to the Asian Development Bank. The region will probably grow 6.4 % next year from a 6.2 % pace this year, the Manila-based lender said in its Asian Development Outlook 2014 today. China’s economy is forecast to expand 7.4 % in 2015, slowing from 7.5 % this year, it said. “Developing Asia is growing steadily,” Joseph Zveglich, the bank’s assistant chief economist, said in an interview. “We’re expecting some pickup this year and next, helped by the recovery in major industrial economies particularly the U.S., with some balancing from moderating growth in China.” (Bloomberg)

Japan Raises Sales Tax For First Time In 17 Years. Japan has raised its consumption tax for the first time in 17 years in an attempt to rein in public debt. From Tuesday, sales tax will increase from 5% to 8%. It will rise again, to 10%, in October 2015. Prime Minister Shinzo Abe said he would continue to take "necessary action" to address livelihood issues and keep Japan's economy on track. The stepped tax increases are aimed at covering rising social welfare costs linked to Japan's ageing population. (BBC)

Japan Corporate Sentiment Gains Seen Short-Lived As Tax Rises. Sentiment among large Japanese manufacturers rose to the highest level since 2007, a gain that may be short-lived as today’s sales-tax increase weighs on consumption and confidence. The Tankan index was at 17 in March, climbing from 16 in December, a Bank of Japan report showed today, below the median estimate of 19 in a Bloomberg News survey of economists. The index is forecast to drop to 8 in June, worse than economists’ forecast of 13. (Bloomberg)

China Manufacturing Index Little Changed In March. Chinese manufacturing gauges pointed to weakness in the world’s second-biggest economy that could prompt the Communist Party leadership to roll out additional support measures. A Purchasing Managers’ Index fell to 48 in March, the lowest reading since July, from 48.5 in February, HSBC Holdings Plc and Markit Economics said today. A separate PMI from the government, with a larger sample size, was at 50.3 from 50.2 the previous month. (Bloomberg)

Rajan Leaves India Key Rate Unchanged As Inflation Eases. India’s central bank left its key interest rate unchanged as consumer-price inflation eased to a two-year low and the rupee strengthened, increasing scope to support growth ahead of national elections starting this month. Governor Raghuram Rajan kept the repurchase rate at 8 %, the Reserve Bank of India said in a statement today. Thirty-six of 39 analysts in a Bloomberg News survey predicted the move, while three saw a quarter-point raise. He has boosted the rate by 75 basis points since taking office in September. (Bloomberg)

USA

Rising Manufacturing Orders Signal Further Growth. The U.S. manufacturing expansion accelerated in March, driven by gains in production and orders, in the latest sign that the economy is shaking off its winter doldrums and building momentum into the second quarter. The Institute for Supply Management’s index increased to 53.7 from 53.2 a month earlier, the Tempe, Arizona-based group said today. Readings above 50 indicate expansion. The median forecast in a Bloomberg survey of economists was 54. (Bloomberg)

Europe

Euro-Zone PMI Pickups Offset By Cooling In Germany. The euro zone's manufacturing recovery became more balanced in March, but slowed as pickups across much of the currency area were offset by a cooling in Germany. In a warning sign for the European Central Bank, manufacturers reported the first cuts in the prices at which they sell their goods to customers since August 2013. They also reported a decline in the costs of goods and services they use to make their products for the second straight month. Data provider Markit said its purchasing managers index for manufacturing--which is based on a survey of 3,000 companies--fell to 53.0 from 53.2 in February. A reading above 50 indicates month-tomonth expansion in activity. (WSJ)

Europe’s Recovery Diverges As Italy Jobless At Record. Europe’s two-speed economy was underscored in data today showing strengthening in the German labor market just as Italy’s jobless rate reached a record. Overall euro-area unemployment was at 11.9 % in February, lower than the 12 % median forecast of 32 economists in a Bloomberg News survey. In Italy it rose to 13 %, while in Germany the locally defined jobless rate for March stayed at the lowest in at least two decades. In Germany, the number of people out of work dropped by a seasonally-adjusted 12,000 to 2.9 million in March, after falling a revised 15,000 the previous month. (Bloomberg)

UK Manufacturing Growth Cools In March. Growth in British manufacturing unexpectedly eased to its slowest pace in eight months in March and prices paid by factories tumbled, a survey showed on Tuesday. The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) fell in March to 55.3, its lowest since July last year and below all forecasts in a Reuters poll of economists. February's reading was sharply cut to 56.2 from an originally reported 56.9. It was the fourth month in a row that the index fell although it remained comfortably above the 50 mark that denotes growth. In another reminder of strength in the sector, the pace of hiring, which in February hit a 33-month high, faded only slightly through March. (Reuters)

Eurozone Approves Next Greece Bailout Payment. Eurozone ministers have signed off the next 8.3bn euro ($11.4bn) instalment of Greece's bailout. A first tranche of 6.3bn euros will be paid at the end of April, Eurogroup chairman Jeroen Dijsselbloem said at a meeting of finance ministers in Athens. Two more payments of 1bn euros will be made in June and July, he added. (BBC)

Currencies

Dollar Rises Above ¥103.50 To Highest Since Mid-Jan. The dollar rose to its highest level against the Japanese yen since mid-January on Tuesday as investors weighed decreasing monetary stimulus in the U.S. with an increase in the Japanese consumption tax that could pave the way for further easing in Japan. The dollar rose to ¥103.70 from ¥103.23 late Monday. The Australian dollar fell to 92.45 U.S. cents from 92.73 U.S. cents late Monday. The Reserve Bank of Australia held policy steady and RBA Gov. The pound fell to $1.6631 from $1.6666 late Monday. Data released Tuesday showed the U.K. The euro rose to $1.3794 from $1.3777 late Monday. The ICE dollar index, a measure of the dollar’s strength against six rivals, eased to 80.085 from 80.113 late Monday. (Market Watch)

Commodities

Brent Plunges To 5-Month Low On China, Europe Factory Data. Brent crude oil futures fell in a steady slide on Tuesday to settle at nearly a five month-low as poor manufacturing data from China and Europe weighed. U.S. oil futures also fell as analysts looked toward another build in stocks Wednesday. Brent crude settled $2.14 lower at $105.62 per barrel, its lowest settlement since Nov. 8. U.S. crude fell $1.84 to $99.74 per barrel. (Reuters)

Gold Falls To Seven-Week Low On Strong U.S. Factory Data. Gold fell to a seven-week low on Tuesday after firm U.S. manufacturing data lifted U.S. equities, but strong physical demand from Asia was expected to underpin prices. Spot gold was down 0.3 % at $1,279.76 an ounce by 4:43 p.m. EDT (2043 GMT), having earlier hit $1,277.29 an ounce, its lowest since Feb. 11. Silver was up 0.3 % at $19.77 an ounce. Platinum rose 1.2 % to $1,425.50 an ounce, while palladium was up 0.5 % at $776.10 an ounce. (Reuters)