Daily Market Review - 04/03/2014

Crude Oil

Oil prices slid in Asia this morning as the U.S. and Russian policymakers look to find a diplomatic way out of the crisis over the annexation of the Ukraine. A few weeks into this crisis, both party’s would like to put it behind them.

U.S. Secretary of State John Kerry and his Russian counterpart, Foreign Minister Sergei Lavrov, met over the weekend to diffuse the crisis, which has bolstered oil on concerns the conflict will escalate and threaten supply from crude-rich Russia.

Market Overview

Asian shares continue their recovery on Tuesday hitting 4 month high on back of an improve Chinese PMI as well as positive comments from the US fed newly appointed Chair, Janet Yellen.

In a public appearance overnight, Newly appointed Fed Chair,Yellen, gave a strong defense to the Fed’s easy-money policies saying “recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics.”

She said “considerable” slack still exists in the job market and said further monetary stimulus could be effective.

She returned previous comments and said “I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers at the Fed,” Yellen said.

The markets reacted positively to Yellen comments with the Dow climbing 0.82%, the S&P 500 rose 0.79%, while the Nasdaq rose 1.04%.

Early Tuesday, it was reported that China’s official PMI increased to 50.3 in March from February’s 50.2, in line with economists’ forecasts. Above 50 indicates expansion, below 50 signifies contraction.

While the PMI figure alone is unlikely to ease mounted concerns over China’s slowdown, the market expectation that Beijing will adopt a new stimulus plan led to an improve sentiment that took the main Asian markets to trade at a 4 month high.

The positive sentiment didn’t affect the Japanese markets that reacted to their own data. its central name first quarter Tankan business survey that came out earlier showed sentiment among major manufacturers came in largely as expected at a gain of 17 in March, up from an increase of 16 in December, posting the fifth straight quarterly rise. At the close of the Session, the Nikkei 225 closed with a minor change.

Europe exchanges indicate on a positive opening on back of yesterday strong close in the US and ahead of its key members Manufacturing PMI.

The US is to report the latest numbers of its manufacturing activity, its ISM Manufacturing PMI, later on.

The key financial event for the week is expected on Friday only-The US unemployment report and Unemployment rate. The markets are expected to trade cautiously ahead of Friday’s numbers.

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