Daily Commentary (Marshall Gittler)

• Last week the dollar strengthened versus most of the major developed-nation currencies.
• Today, the yen slid against the euro and the dollar ahead of Japan’s Deputy Governor Kikuo Iwata speech. During his speech he warned that if inflation remains below 1% for a long period of time, it will increase the risk of deflation.
• The preliminary China’s purchasing manufacturing Managers’ Index for March from HSBC and Markit Economics dropped to 48.1 from 48.5 in February and, missing market estimates of 48.7.Numbers below 50 signal contraction.
• During the Asian morning, Australia’s currency weakened against most of its 16 major peers after China’s factory data. However it erased the losses and gained even more within the following hours.  
• Gold prices eased further in Asia on Monday after the China HSBC Flash Purchasing Managers Index data. Brent oil and West Texas Intermediate fell after a gauge of factory production in China contracted for a third month.
• More March PMIs are due out during the European day. We have the preliminary figures for both the manufacturing and service sectors from France, Germany and Eurozone as a whole. France’s manufacturing PMI is forecast to be slightly down, while the service-sector PMI is expected to rise. Both Germany’s PMIs are estimated to be lower. Eurozone’s preliminary manufacturing PMI for March is expected to decline while the preliminary service sector figure is expected to remain unchanged.
• In the US, the preliminary Markit manufacturing PMI for March is estimated to decline to 56.5 from 57.1 in the previous month, while the Chicago Fed national activity index is forecast to have risen to 0.10 in February form -0.39 in January.
• We have three speakers scheduled on Monday. Federal Reserve Governor Jeremy Stein gives welcoming remarks at a Fed conference, while the ECB governing council member Erkki Liikanen speaks at a press briefing. Bank of Canada Deputy Governor Tim Lane will also speak.

In Hungarian