PMI numbers, China, Japan, Australia, manufacturing PMI

The Reserve Bank of Australia is likely to raise rates again at its March meeting before pausing for the rest of the year, AMP said in a note.

“We think the RBA is closer to pausing the cycle of rate hikes than the market expects,” AMP senior economist Diana Mousina said in a note.

“We expect only one more rate hike from the Reserve Bank at the March board meeting and a pause for the remainder of the year (with the risk of rate cuts later in 2023),” she said, citing the “disappointing” economic environment. data from the past months,

Mousina pointed to negative job growth between November and December, a less-than-expected wage increase in the last quarter of last year, and how monthly consumer prices show signs of slowing in early 2023.

She added that a weaker employment print in February will increase the risk of a pause at the RBA meeting in March. Australia will report its unemployment rate for February on March 16, following a 0.2 percentage point increase in unemployment in February.

The Australian dollar weakened 0.31% against the US dollar on Wednesday, trading at 0.6573.

— Lim Hui Jie

China’s official manufacturing purchasing managers’ index rose to 52.6 in February, above the 50 points that separate growth from contraction, data from the National Bureau of Statistics showed.

That’s up from January’s reading of 50.1 and above expectations of 50.5, according to economists polled by Reuters.

The non-manufacturing PMI rose to 56.3 – also above 54.4 in January, the highest level since June 2022.

– Jihy Lee

Factory activity in Japan slowed at its fastest pace in two and a half years in February, a private investigation by au Jibun Bank found.

The purchasing managers index for the manufacturing industry fell from 48.9 in January to 47.7. This was also the fourth consecutive month that Japanese manufacturing activity remained in contraction territory.

A PMI reading above 50 indicates expansion, while a reading below 50 signals a contraction in growth.

On Tuesday, Japan’s industrial production fell 4.6% from a month ago in January, the biggest drop the economy has seen in eight months.

— Lim Hui Jie

The Australian economy grew by 2.7% for the whole of 2022, in line with economists’ expectations, but lower than the 5.9% figure set for 2021.

On a quarterly basis, gross domestic product grew 0.5%, according to data from the country’s statistical office. Australia now has five consecutive quarterly GDP increases, but growth slowed for the last two quarters.

The Australian dollar strengthened 0.36% against the US dollar, while the S&P/ASX 200 fell 0.22%.

ChatGPT’s success has captured the public’s imagination and investors’ attention. But HSBC says the chatbot could be the tip of the artificial intelligence iceberg.

So what’s next for AI? Wall Street analysts reveal its potential and name several stocks to play in the emerging space.

Pro subscribers can read more here.

— Zavier Ong

South Korea’s trade deficit fell to $5.3 billion in February after a deficit of $12.65 billion in January, preliminary data showed.

The latest reading is a smaller deficit than expected to see a deficit of $6.06 billion, according to economists polled by Reuters.

Exports fell 7.5%, less than expected with an 8.7% drop – while imports rose 3.6%.

– Jihy Lee

March is usually a positive month for the stock market, but this year could bring more of the same turbulence that upset investors in February.

Stocks will exit February with heavy losses, with the S&P 500 down 2.3% for the month through Monday. The index is still up 3.7% for the year so far.

“February is the second worst month of the year, with an average decline of 0.21%, which is the second worst month after September,” said Sam Stovall, chief strategist at CFRA. “March posts a 1.1% gain on average, up 64% of the time.” March is the fifth-best month for the S&P 500, according to CFRA data dating back to 1945.

For more information, read the full story on CNBC Pro.

— Patti Domm, Tanaya Machel

The yield on the 10-year US Treasury hit a high of 3.983% on Tuesday, the highest level since Nov. 10, when the note returned a whopping 4.117%. It was last about 3 basis points higher at 3.955.

Government bond yields contributed to their sharp gains in February as traders spent longer than expected weighing the prospects of tighter monetary policy.

—Gina Francolla, Tanaya Machel

According to UBS Financial Services, interest rate hikes by the US Federal Reserve have weighed on stock markets.

“We assess the economy is at a late stage in the cycle, with the Fed continuing to hike rates and growth likely to slow. Tighter policies are creating downside risks for markets,” Brian Rose, senior economist at UBS, wrote Monday. in a note to customers.

The company expects the S&P 500 to end the year close to current levels, with better upside potential in cyclical markets outside the US, particularly emerging markets and Germany.

“We prioritize value over growth,” Rose wrote.

According to Rose, financial conditions have not tightened in line with the Fed’s rate hikes. The Fed raised rates by 25 basis points on February 1 and suggested further rate hikes in the coming months.

—Pia Singh