Market sentiment was boosted by strong manufacturing data in March. Wall Street gained with the DJIA and the S&P 500 gaining +0.40% and +0.75% respectively. In the commodity sector, the front-month contract for WTI crude oil jumped to as high as 105.49 before settling at 105.23, up +2.15%, while the equivalent Brent crude contract surged to a 4-day high of 125.63 before ending the day at 125.43, up +2.08%.

The US ISM manufacturing index surprisingly climbed +1 point higher to 53.4 in March. The components were also strong with production gaining +3.0 points to 58.3 and employment adding +2.9 points to 56.1. Moreover, prices paid stayed above 60 (despite a dip to 61 from 61.5), consistent with headline CPI of +2.9% in February. Earlier in the day, China's official PMI climbed to 53.1 in March from 51 the previous month. The better than expected (market expectations: 50.8) reading also signaled the country's manufacturing sector continued to expand. While the case of hard landing is getting remote, monetary easing by the government is still needed. A similar measure complied by HSBC showed a fall to 48.3 in March, from 49.6 in February. The HSBC index has been weaker than official PMI over past several months as the former is more heavily weighted toward smaller firms. The HSBC index also showed a decline in export orders.

Encouraging PMI data overshadowed weakness in the Eurozone economy. Unemployment rate in the 17-nation region added +0.1% to 10.8% in February. This 10th consecutive increase has sent the jobless rate to the highest level in 15 years. In Spain, the jobless rate soared to 23.6%. The situation is expected to deteriorate further as most countries in the Eurozone have to accelerate tightening measures to reduce deficits.

The RBA is expected to leave the cash rate unchanged at 4.25% today. There is less than 50% chance of rate cut this month. Although intermeeting economic indicators suggested a weakening in Australia's growth, the RBA has history of surprisingly the market. Moreover, the apparently contradicting comments from the central bank and the Treasury suggested that policymakers would stand aside for another month. That said, further easing later this year remains likely.