Global

· Global Manufacturing Growth Eased Slightly in March. Global manufacturing growth pulled back slightly in March as factories made only modest cuts to their prices, a business survey showed on Thursday. JPMorgan's Global Manufacturing Purchasing Managers' Index (PMI), produced with Markit, nudged down to 51.8 in March from February's four-month high of 51.9. March was the 28th month the index has been above the 50 level that separates growth from contraction. A subindex measuring output prices rose to just below that level, coming in at 49.7. "The March PMI surveys suggest that the global manufacturing sector continued to make steady progress, with rates of expansion in output and new orders staying close to the solid rates seen in recent months," said David Hensley, a director JPMorgan. (Reuters)

· Chinese New Year, U.S. Port Delay Boost February Air Freight. Global air freight volumes rose 11.7% year-on-year in February, driven by the Chinese New Year, the International Air Transport Association said on Wednesday. Freight volumes traditionally increase in the weeks leading up to the holiday, which last year occurred in January, while congestion at U.S. ports also boosted the results. Asia-Pacific carriers saw freight volumes rise 20.8%, while North American carriers reported an 8.7% rise. "There is also evidence that significant automotive exports from Japan to the US shifted from sea to air," IATA said in its monthly statement on freight volumes. IATA said the growth seen in February would not be repeated, confirming a forecast for freight volumes to rise by between 4% and 5% this year. (Reuters)

Asia

· Japan's Tankan Sentiment Survey Shows Few Gains. Sentiment among Japan's big manufacturers barely changed in the three months to January, the Bank of Japan's quarterly tankan survey showed Wednesday, despite expectations that the weak yen would improve their mood. The main index measuring sentiment among big manufacturers over present economic conditions came to +12 in the March survey, unchanged from the December poll. Economists had expected a reading of +14. The index is calculated by subtracting the percentage of respondents saying conditions are bad from those saying they are good. The mood among big car makers and electrical machinery manufacturers—the biggest beneficiaries of the weak yen—also remained unchanged from the previous quarter. The index for large non-manufacturers rose to +19 from +17. Large companies plan to cut capital investment by 1.2% in the fiscal year ending March 2016 compared with the previous year, according to the tankan. (MarketWatch)

· Weak demand hits China factory, services firms in March. Surveys of China's factory and services sectors showed stubborn weakness in the world's second-biggest economy in March. Three separate surveys showed Chinese companies shed jobs last month as they struggled with soft demand and deflationary pressures. The official Purchasing Managers' Index (PMI) released on Wednesday was not as dire, but indicated that activity was tepid at best. It edged up to 50.1 in March from February's 49.9, the National Bureau of Statistics said, stronger than a poll forecast of 49.7, but barely above the 50-point level that separates expansion from a contraction. In another sign that businesses were facing lackluster demand, a survey of China's services sector showed the official non-manufacturing PMI cooled slightly to 53.7 from February's 53.9, hugging a one-year low. Both the factory and services PMIs showed companies continued to reduce staff last month. (Reuters)

· India says will shake up trade tariffs to compete globally. India plans to pull its tariff regime closer in line with global norms to prepare for new regional trade pacts being negotiated by advanced economies, the government said on Wednesday. India has not been invited to join pacts such as the U.S.-led 12 country Trans-Pacific Partnership (TPP) and is "not in a position to join," partly because its tariffs are not competitive, a top official said at the unveiling of a new five year trade policy. "If the country is to stand up to these agreements, it's important that we start to address these issues," Trade Secretary Rajeev Kher said, adding that India's access to markets was likely to erode when such pacts take effect. Kher said India needed lower tariffs for intermediate goods to help it further integrate with global supply chains, and that these industries would have to come more competitive. (Reuters)

· Weak South Korea March Exports, Inflation. South Korean exports fell the most in two years in March and inflation hit its lowest since 1999, weakening economic momentum and putting the central bank under pressure to cut interest rates again. The central bank has said the South Korean economy would pick up in the March quarter after suffering its worst growth in almost six years in October through December, but a recent run of data provided little evidence of a sharp rebound. Exports to China and the EU fell 2.4% and 9.7%, respectively, while shipments to the U.S. rose 17.0%. Total exports in March fell 4.2% from a year earlier, the trade ministry data showed, the sharpest fall since February 2013 while imports dropped 15.3%. Both were worse than median forecasts in a poll of analysts. The declines took the trade balance to a record $8.4 billion surplus in March. (Reuters)

· Indonesia Inflation Rate Edges up in March. Indonesia's annual inflation rate accelerated slightly in March, a development that limits the central bank's room to cut interest rates again. The statistics bureau said on Wednesday that March's headline rate was 6.38%, compared with 6.29% a month earlier. The main reason for the increase was higher fuel prices. A poll expected a March rate of 6.40%. Bank Indonesia expects the annual inflation rate to stay around 6.3% until November, then drop to about 4% due to changes in the base for comparison. (Reuters)

USA

· U.S. Private Payrolls, Factory Data Point to Weak Q1 Growth. U.S. private employers added the smallest number of workers in more than a year in March and factory activity hit a near two-year low, fresh signs that economic growth slowed significantly in the first quarter. Private payrolls increased by 189,000 last month, the smallest gain since January 2014, the ADP National Employment Report showed on Wednesday. That was well below economists' expectations for an increase of 225,000. Job gains slowed almost across all sectors, with manufacturing payrolls declining for the first time since January 2014. The ADP report, which is jointly developed with Moody's Analytics, was released ahead of the government's more comprehensive employment report on Friday. While the ADP report has a poor track record of predicting nonfarm payrolls, it raises the risk that Friday's number could be softer than economists are forecasting. A survey predicted payrolls increased 245,000 last month after rising 295,000 in February. In a separate report, the Institute for Supply Management (ISM) said its national factory activity index fell to 51.5 last month, the lowest reading since May 2013, from 52.9 in February. A reading above 50 indicates expansion in the manufacturing sector. New orders and factory employment hit 22-month lows. Order books shrank and export orders contracted further. But there is reason for cautious optimism. Auto sales rebounded to an annualized rate of 17.15 million vehicles in March from a rate of 16.2 million vehicles in February. That, together with a surge in consumer confidence last month, suggests a pick-up in spending. (Reuters)

Europe

· Eurozone Manufacturing Picks Up as Weak Euro Boosts Exports (Final PMI). Manufacturing activity across the euro zone accelerated faster than previously thought last month, adding to signs the bloc's economy is recovering. Markit's final March manufacturing Purchasing Managers' Index (PMI) was at a 10-month high of 52.2, beating a flash reading of 51.9. It was the 21st month it has been above the 50 mark that separates growth from contraction. "The final PMI reading signalled slightly stronger growth of the manufacturing economy than the preliminary reading, adding further to signs that the euro zone economy is reviving after last year's slowdown," said Chris Williamson, Markit's chief economist. "March saw the sharpest increase in new export orders since April 2014. Companies reported that the weaker euro was the main factor driving new export orders higher." (Reuters)

· UK Factory PMI Rises to Eight-Month High in March. Britain's manufacturing sector grew at the fastest rate in eight months in March, bolstered by strong domestic demand and a pick-up in export orders, a survey showed on Wednesday. Financial data company Markit said its monthly manufacturing purchasing managers' index (PMI) rose to 54.4 in March from 54.0 the month before, the highest level since July 2014 and just ahead of economists' consensus forecast for a rise to 54.3. Markit said the figures suggested that output in Britain's manufacturing sector grew by 0.6% in the first three months of 2015 compared with the previous quarter, up strongly from 0.2% in the last three months of last year. (Reuters)

· Central and Eastern Europe Manufacturing Powers Ahead. Manufacturing activity in central Europe expanded strongly in March thanks to the region's close ties to the reviving euro zone - as well as to it avoiding excessive currency gains by keeping monetary policy loose. In the export-reliant Czech Republic, the Purchasing Managers' Index for manufacturing rose to 56.1 from February's 55.6, boosted by new orders and employment, data compiled by Markit Economics showed. Hungary's PMI, compiled using a different methodology, rose to 55.6 in March from 55.0 in February, benefiting from a pickup in new orders and production volumes, the Association of Logistics, Purchasing and Inventory Management said. Part of the acceleration in Hungarian manufacturing in March was due to Japan's Suzuki starting production of its Vitara model at its Hungarian plant last month. In Poland, the region's biggest economy, the manufacturing PMI eased slightly to 54.1 last month, but employment increased at one of the fastest levels since 1998, data compiled by Markit and HSBC showed. (Reuters)

· EU Cannot Maintain Protection against Chinese Imports, its Own Lawyers Say. European fears of being forced to lower tariff defenses against cheap Chinese imports have grown following a confidential warning from the EU's own lawyers. In a draft letter seen by Reuters, the head of the European Commission's Legal Service, Luis Romero Requena, warned the head of the trade directorate that the EU would not have a good case to disregard the effects of the World Trade Organization viewing China as a more market-based economy, a status that will make it harder for other powers to justify current high tariffs. A spokesman for EU Trade Commissioner Cecilia Malmstrom declined comment on the letter but stressed that legal opinions would only form one part of a broader reflection currently under way on the implications of expiring WTO limitations on China's right to claim equal treatment with its free-market competitors. (Reuters)

· World Bank Sees Protracted Recession in Russia. Russia faces a protracted recession as the impact of Western sanctions lingers and oil prices stay low, the World Bank said in a report published on Wednesday. In its baseline scenario, the bank expected Russia's GDP to contract by 3.8% in 2015 and a further 0.3% in 2016, describing medium-term growth prospects as dim. The bank's latest forecasts are more pessimistic than those made in December and assume that the oil price will recover only marginally over the next two years, averaging $53 per barrel in 2015 and $57 per barrel in 2016. (Reuters)

Currencies

· Disappointing Data Reins in Dollar Bulls. The dollar nursed modest losses early on Thursday, having suffered a setback on fresh signs that the U.S. economy slowed significantly in the first quarter. Treasury yields fell with the benchmark 10- year yield sliding back below 1.9%. That in turn undermined the greenback, which lost ground against a basket of major currencies. It fell as far as 119.42 yen, from levels above 120.00, before steadying at 119.66 early in Asia. The euro climbed to $1.0800, from one-week lows of $1.0713. It last stood at $1.0771. Dollar bulls are now pinning their hopes on non-farm payrolls due on Friday. In contrast, figures out of Europe were much more encouraging with manufacturing activity across the euro zone accelerating and adding to signs the bloc's economy is recovering. The loonie last stood at C$1.2615 per USD, continuing to recover from a low of C$1.2784 per USD after oil jumped as much as 5% on Wednesday. The Aussie on the other hand languished at $0.7600, having come within a whisker of a six-year trough of $0.7561 as iron ore prices hit fresh lows. (Reuters)

Commodities

· Oil Jumps after U.S. Output Drop as Iran Talks Drag. Oil jumped as much as 5% on Wednesday, snapping a threesession losing streak, as U.S. crude output fell for the first time in two months and the government announced a smallerthan- feared rise in weekly stockpiles. The market's focus on Iran nuclear talks, which had depressed prices since Friday, also shifted as the dollar eased. A weaker dollar makes commodities denominated in the greenback, such as oil, more attractive to holders of other currencies. Crude production in the United States dropped 0.4% to 9.4 million barrels per day in the week to March 27, the first weekly decline since the end of January, data from the Energy Information Administration showed. Domestic inventories rose 4.8 million barrels last week to 471.4 million barrels, hitting record highs for a 12th straight week, the EIA said. U.S. crude futures CLc1 settled up $2.49, or 5.2%, at $50.09 a barrel. Futures of North Sea Brent LCOc1, the London-traded and more widely used benchmark for oil, settled up $1.99, or 3.6%, at $57.10. (Reuters) · Gold Jumps after Downbeat March. Gold rallied 2% on Wednesday as the dollar retreated after a downbeat U.S. jobs report raised expectations that the Federal Reserve could be more cautious in tightening monetary policy. Spot gold rose 2.2% to a session high of $1,208.90 an ounce, and was trading up 1.8% at $1,204.90 at 1812 GMT. Silver rose 1.9% to $16.93 an ounce, while platinum was up 2% at $1,161.60 an ounce and palladium climbed 1.9% to $746.50 an ounce. Silver saw the biggest gain among the precious metals in the last quarter, rising 6%, while palladium fell 7.6%. Platinum fell just over 5%. (Reuters)