Two key deals remain unresolved as deadline passes
Two important deals remained inconclusive as their March deadlines passed. These deals, if had settled, would have had positive sentiments in global markets and thereby economic growth. These are regarding the US – China trade deal and Brexit.
On US-China, everyone has been waiting for a resolution, and the US government has indicated that a deal will be more difficult to achieve by the end April. China stated that May is more likely for a trade deal to happen as both sides were negotiating the final points. Meanwhile, the implementation of a VAT cut in China, effective from 1 April, has already started to trickle into spot markets. A major acrylonitrile producers cut its weekly price citing the cut in VAT rate for manufacturing from 16% to 13%.
The Eurozone manufacturing sector saw a significant contraction in nearly six years in March, while industrial output in the UK hit a 13-month high, amid record stockpiling levels, according to IHS Markit. The Purchasing Managers Index (PMI) for Eurozone manufacturing finished at 47.5, dropping from 47.6 in the flash analysis earlier in the month. This is the second-consecutive month that the PMI has fallen below 50.0 mark. In contrast, the UK’s PMI climbed to 55.1 in March from 52.1 the previous month, pushed higher by Brexit preparations, higher energy costs, raw material shortages and inflationary pressures.
Meanwhile a group of five economic research slashed their 2019 GDP growth forecast for Germany to 0.8%, from 1.9% in their earlier forecast.
