Asian Markets Are Rallying
Hong Kong's Hang Seng is up 1.0%, while the Shanghai Composite is up 0.7%. Japan's Nikkei 225 and Korea's KOSPI are both slightly higher, while the U.S. dollar is up slightly against the Japanese yen.
China's official manufacturing Purchasing Managers Index unexpectedly advanced to 50.3 in March from February's 50.2 reading. Economists predicted the index would fall to 50.1. The HSBC China manufacturing PMI, on the other hand, fell to 48 from 48.5.
"Today's PMI data would come as a relief for policymakers, as it suggests that the economy is not slowing as quickly as the PMIs indicated earlier," say economists at Barclays. "Last week, Premier Li said that the government has policies ready to counter any volatility this year, as well as the capability to maintain growth in a reasonable range. To us, this suggests that the government is going to take more action to stabilise growth, a view we expressed following the release of much weaker-than-expected China data a couple of weeks ago."
Also out Tuesday were monthly Korean trade data. Exports advanced 5.2% from a year earlier - above expectations for a 4.2% rise - while imports rose 3.6%, slightly above expectations for a 3.5% gain.
Meanwhile, HSBC's Korea manufacturing PMI rose to 50.4 in March from 49.8 in February.
"Korea's stronger manufacturing conditions in March show that its economy remains on track for a gradual recovery," said Ronald Man, an economist at HSBC, in the PMI release. "Economic growth is expected to be maintained in 1Q 2014, albeit a slower pace when compared with the previous quarter. One promising sign for the trade-dependent economy is stronger export orders from China, which is Korea's largest export market."
Korea is known as the "economic canary in the coal mine" given its close ties with the Chinese economy.