Asia
Global markets remain risk-averse this week and US indices have been setting the tone for weakness across the Asia-Pacific region. Japan was again the focus of the regional sell-off, with both the equal-weighted Nikkei 225 and market-capitalisation weighted Topix falling by around 1.5% on the day. The 300+ points fall in the Nikkei takes the index below the 22,000 points level it broke through in the autumn of 2017.
Japanese markets were the outstanding performers towards the end of last year and into 2018, but they have been hit by the change in global sentiment and a rise in the yen against the dollar – despite domestic companies continuing to perform strongly. Japan’s consumer confidence figures for February came in below forecasts, however. Overnight sees a raft of economic releases, including unemployment, household spending and the Tokyo consumer price index.
Chinese and Hong Kong shares showed more resilience, however, helped by a modest increase in manufacturing activity, as measured by the Caixin PMI – earlier in the week figures from the sector suggested that it is only just in expansionary territory.
Europe
Manufacturing figures across the eurozone were mixed: the headline PMI for the currency bloc was above forecasts at 58.6, helped by a strong performance once again from the export-driven German economy. The Italian equivalent PMI figure was below forecasts, as was the France manufacturing PMI.
In the UK, the FTSE 100 struggled to shake off recent weakness, especially as global advertising giant WPP (WPP) posted its worst results in a decade. The FTSE 100 slipped below 7,200, having started the year pushing towards 7,800 points.
WPP shares were off nearly 15% in midmorning trading.
North America
ISM manufacturing figures for February continue the global theme. The Personal Consumption Expenditures (PCE) data will also be available for January – giving an indication of how inflation changed at the start of the year. Weekly jobless claims to February 24 will also be in view.
US stocks start a new month today after a volatile February with the Dow Jones close to dropping back below the 25,000 points level. The new Federal Reserve chair Jerome Powell will address the Senate for the first time today and his remarks will be closely followed by traders.