Asia Pacific Leads

European and US markets took their cues overnight from Asia Pacific trading, largely echoing the 2% gains seen across the region yesterday. Improving sentiment saw industrial commodities bounce, and a further 14% rally in Glencore shares means they are close to flat for the week. Questions around whether the buying represents end of quarter window dressing or new optimism will likely be swept aside today by the release of crucial data in China.

The quarter ending yesterday saw many share markets record falls of around 8-10%, in many cases for the second quarter in a row. The last minute rallies improved the numbers, but investors remain divided on whether the current weakness is a correction or an unfolding crisis.

The manufacturing and services PMI’s due today speak directly to the fears of a slowing in global growth that has roiled markets recently. Expectations are that the official reads will land close to the break-even point of 50, but the private read on manufacturing will confirm the flash reading that shows contraction in manufacturing. Any number below 47 would likely spark further selling of shares and commodities.