Asia

China Factory Activity In April Shrinks. Activity in China's manufacturing sector contracted for a fourth consecutive month in April, a private survey showed on Monday, adding to questions about whether the world's second-largest economy is still losing momentum. The final reading of the HSBC/Markit purchasing managers' index (PMI) for April came in at 48.1, lower than a preliminary reading of 48.3 but up slightly from an eight-month low of 48.0 in March. The HSBC/Markit PMI has been below the 50 level that separates growth from contraction since the start of 2014. (Reuters)

Weak Exports Weigh Down Indonesian Growth. Indonesian growth slowed more than expected in the first quarter, according to official data, as weak exports and tight monetary policy weighed on South-East Asia’s top economy. Growth in the archipelago nation has been easing over the past year as Chinese demand for key commodities slows, foreign investors are put off by policies perceived as nationalistic and interest rate hikes curb lending. Year-on-year growth slipped to 5.21% in the three months to the end of March, down from 5.72% on-year expansion in the fourth quarter of 2013, the official statistics agency said. Economists had forecast growth of 5.60%. (AFP)

USA

US Service Sector Grows At Fastest Pace In 8 Months. U.S. manufacturing growth accelerated for a third straight month in April, an industry report showed on Thursday, boosted by a pickup in employment growth. The Institute for Supply Management (ISM) said its index of national factory activity rose to 54.9 in April, up from 53.7 in March. It was the best reading since December. The report beat analyst expectations for a reading of 54.3, though the index remains below November's recent peak of 57, which was the highest since April 2011. Readings above 50 indicate expansion in the sector. (Reuters)

Europe

Euro-Zone Producer Prices Fell Again In March. Prices of goods leaving the euro zone's factory gates fell for the third straight month in March, an indication that the currency area won't soon escape a period of low inflation that may hinder its recovery. The European Union's statistics agency said Monday that producer prices fell 0.2% from February. Prices were 1.6% lower than in March 2013, a smaller drop than the 1.7% decline recorded in the previous month. (Market Watch)

EU Cuts Euro-Area Growth Outlook As Inflation Seen Slower. The European Commission predicted low inflation will remain a threat to euro-area expansion for at least the next two years as it trimmed its economic-growth forecast and warned of the impact of tensions with Russia. The 18-nation euro zone’s inflation rate will be 0.8 % this year and 1.2% in 2015, both lower than forecast in February and well below the European Central Bank’s target of just below 2%, the Brussels-based commission said today. Gross domestic product is projected to rise 1.7 % in 2015, compared with the commission’s previous forecast of 1.8 %. (Bloomberg)

EU Raises Its Growth Forecast For 2014. The European Commission has raised its growth forecast for the EU, saying that "the recovery has taken hold". The 26 nations of the EU are forecast to grow by 1.6% for 2014, a touch higher than the forecast of 1.5% made in late February. The growth forecast for the 18-nation eurozone remains at 1.2% for 2014. The Commission expects the jobs market to continue to improve, forecasting EU unemployment will fall to 10.1% this year. In March, the rate was 10.5%. (BBC)

EU Sees Biggest Spain Growth Since 2007 As Budget Gap Grows. The European Union forecast that Spain will post its fastest economic growth in eight years in 2015 as Prime Minister Mariano Rajoy allows his budget shortfall to rise in the run up to a general election. Spanish gross domestic product will grow 2.1% next year and the budget deficit will widen to 6.1 % of GDP unless Rajoy changes his current policy settings, the EU said today in its spring economic forecast. The EU’s outlook for the economy next year, raised from a previous estimate of 1.7 %, exceeds the Spanish government’s prediction for a 1.8 % expansion. Rajoy’s government also said it will meet its 4.2 % deficit target in 2015. (Bloomberg)

Hollande Economy Plan Falls Short On Growth, Commission Says. President Francois Hollande’s plan to revive the French economy still leaves the nation falling short of its goals on the deficit and growth, analysis by the European Commission shows. French gross domestic product will expand by 1.5 % next year, instead of the 1.7 % the French finance ministry is currently predicting, the commission said today as part of its latest round of economic forecasts. The commission sees France’s budget deficit come in at 3.4 % of GDP in 2015, missing a government forecast of 3 %. (Bloomberg)      

Currencies

Dollar Steady Vs. Majors. The dollar was little-changed against major rivals Monday as investors continued to comb through economic data and speeches from central-bank officials to get a better sense of when the Federal Reserve could begin to raise interest rates. The dollar inched down to ¥102.13 from ¥102.22 late Friday. The ICE dollar index, which measures the greenback against a basket of six currencies, was little changed at 79.505 from 79.510 late Friday. The euro was at $1.3876 versus $1.3872 late Friday. Eurozone producer prices fell 0.2% in March from February. The British pound was essentially unchanged at $1.6870 versus $1.6871 late Friday. The Australian dollar was at 92.75 U.S. cents versus 92.67 U.S. cents. (Market Watch)

Commodities

Brent Down Over $1 On China Worries. Brent crude oil fell by more than $1 a barrel on Monday, pressured by reports that China's manufacturing sector contracted and Libya's oil output was recovering. Brent crude for June delivery settled 87 cents lower at $107.72 a barrel. The European benchmark fell as much as $1.54 earlier in the session. U.S. crude settled 28 cents lower at $99.28 a barrel. (Reuters)

Gold Reaches 3-Week High On Rising Ukraine Tensions. Gold prices rose to a three-week high on Monday, extending the previous session's gains as simmering tensions in Ukraine and a break above a key $1,300 an ounce technical level fuelled buying. Spot gold was up 0.8 % at $1,309.84 an ounce by 4:14 p.m. EDT (2014 GMT), having earlier risen to $1,315.80 earlier, its highest since April 15. Among other precious metals, silver was up 0.7 % at $19.59 an ounce. Platinum rose 0.9 % to $1,444.50 an ounce and palladium climbed 0.9 % to $814.77 an ounce. (Reuters)