Asia markets rise as oil surges after surprise OPEC+ cut; investors digest factory data

Lim Hui Jie

Asia-Pacific markets largely rose on Monday as investors further digested key manufacturing data in the region.

Brent crude futures and U.S. West Texas Intermediate crude futures (WTI) surged as much as 8% after OPEC+ members agreed to cut more than 1 million barrels per day to extend through the end of 2023.

Australia’s S&P/ASX 200 rose 0.66%, while in Japan, the Nikkei 225 opened 0.5% higher and the Topix rose 0.57%. South Korea’s Kospi was down 0.1% while the Kosdaq moved 0.36% higher.

On the other hand, the Hang Seng index looks to trade lower, with Hang Seng futures standing at 20,353 compared to the index’s last close of 20,400.

Private surveys on manufacturing from China, India, and South Korea are expected to be published, while Singapore and the Philippines will release their official manufacturing statistics for March.

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE
.N225	Nikkei 225 Index	*NIKKEI	28208.91	167.43	0.6
.HSI	Hang Seng Index	*HSI	20400.11	0	0
.AXJO	S&P/ASX 200	*ASX 200	7238.2	60.4	0.84
.SSEC	Shanghai	*SHANGHAI	3272.86	0	0
.KS11	KOSPI Index	*KOSPI	2481.28	4.42	0.18
.FTFCNBCA	CNBC 100 ASIA IDX	*CNBC 100	8296.12	11.89	0.14

U.S. stocks on Friday rose Friday after the Federal Reserve’s preferred inflation gauge showed a cooler-than-expected increase in prices.

The core personal consumption expenditures index, which excludes energy and food costs, rose 0.3% in February, less than the 0.4% expected. All three major US indexes closed higher, with the Nasdaq Composite leading gains at 1.74% up.

— CNBC’s Brian Evans and Hakyung Kim contributed to this report

Oil futures surge at open after OPEC announces surprise cut

Oil futures surged as much as 8% at the open after OPEC+ members announced to cut a total of more than 1 million barrels per day to extend through the end of 2023.

Brent crude futures last rose 5.98% to $84.67 a barrel and U.S. West Texas Intermediate crude futures (WTI) jumped 6.04% to $80.24 a barrel.

This comes after oil prices rebounded last week and saw a week-to-date gain of more than 9%.

The latest announcement is an “an unwelcome start to the new week for risk markets and policymakers still dealing with sticky inflation and the fallout of the recent banking crisis,” IG’s Tony Sycamore said in a Monday note.

National Australia Bank added that the unexpected announcement will likely add pressure to European economies, where core inflation rose slightly last month.

Fed’s Williams says banking crisis will play a role in assessing next rate move

New York Federal Reserve President John Williams said Friday that the central bank is steadfast in its commitment to bring down inflation but is watching what is happening in the world of finance.

In a speech delivered in Connecticut, Williams said inflation “remains a top concern” and noted that the Fed must “use its monetary policy tools to bring inflation down.”

However, he noted some of the tumult recently in the banking system and indicated he will be watching the situation closely.

“I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment, and inflation,” he said.

—Jeff Cox

Gold on pace for best month since 2020

Gold is on pace to post a monthly price gain that hasn’t been seen in more than two years.

With just Friday’s session left in the March trading month, gold is on pace to finish 9% higher. That would be its best monthly performance since July 2020, when the metal rallied 10.3%

If a Friday selloff pushes its monthly advance below 7.8%, March would instead become the metal’s best month since May 2021.

Gold prices were steady early Friday.

— Alex Harring, Gina Francolla

Bullish inflation reading

Futures got a boost after an inflation gauge followed by the Federal Reserve came in lighter than expected. The personal consumption expenditures price index excluding food and energy increased 0.3% for the month, the Commerce Department reported Friday. That was below the 0.4% Dow Jones estimate and lower than the January increase.

-John Melloy, Jeff Cox

Bank borrowing from Fed emergency programs declined

Emergency borrowing at the Federal Reserve’s discount window fall last week, raising some hope that the banking crisis could be receding.

Primary credit lending totaled $88.2 billion while banks took out $64.4 billion through the Fed’s new Bank Term Funding Program, according to Fed data released Thursday that covered the period from March 22-29.

That total of $152.6 billion was down slightly from $164 billion the week before. The Fed instituted the BTFP and relaxed rules on the discount window following the implosion of Silicon Valley Bank and Signature Bank in early March.

Banks generally don’t like the use the discount window as it signals that they are under stress and can’t raise capital in the private marketplace.

—Jeff Cox

Source : cnbc