It’s The End Of The Quarter, Do You Know Where Your Money Is?

Ok, so it’s Friday. And it’s the end of the month. And it’s quarter-end.

Let’s get some data out of the way first.

We got PMIs out of China overnight and that turned out pretty well. Here are the bullets:

CHINA MARCH MANUFACTURING PMI AT 51.8; EST. 51.7
CHINA NON-MANUFACTURING PMI AT 55.1 IN MARCH
CHINA MARCH MANUFACTURING PMI RISES TO HIGHEST SINCE APRIL 2012

And the more granular breakdown:

New orders increased to a nearly three-year high of 53.3 from 53
New export orders rose to 51, the highest in almost five years
Input prices fell a third month, falling to 59.3 after hitting a five-year high in December. That suggests producer prices may be peaking at an eight-year high
Among gauges for firms, the reading for large enterprises was strongest at 53.3 while medium-sized companies stood at 50.4 and small firms at 48.6

“Judging from the NBS PMIs, March activity growth appeared to be solid, and inflationary pressures in the manufacturing sector softened,” Goldman wrote after the data hit, adding the following caveat: “The NBS manufacturing PMI tends to increase in March when the Chinese New Year holiday is at a similar date as this year. We will wait for other indicators such as trade and IP to confirm the trend.” For now, the picture looks like this:

Meanwhile, still on the data front, we got inflation data for the eurozone. That’s important for obvious reasons and is especially interesting in the context of this week’s sudden dovish turn in ECB rhetoric. Here are the numbers:

Eurostat reports March flash CPI +1.5% y/y vs Feb. final +2% y/y.
Forecast range 1.5% to 2% from 52 economists
Eurozone March core CPI ex energy, food, alcohol and tobacco +0.7% y/y; Feb. +0.9% y/y; est. +0.8% y/y

“For the ECB, it’s clearly an argument for the doves,” Frederic Pretet, inflation and rates strategist at Scotiabank said. “Some policy makers will see the data as an argument to justify the ongoing stimulus and suggest that the debate on tapering is premature for the time being.” EURUSD headed lower following the print. Panning out a bit, here’s what the picture looks like going back to one “unnamed” official’s stealth dollar bailout on Wednesday:

Speaking of the dollar and weakness, this wasn’t a particularly good quarter for the greenback. While the Bloomberg Dollar index edged up to the highest level in more than a week on Friday as supporting month-end flows outweighed profit-taking interest after yesterday’s rally, this is still on track to be the worst quarter in a year for the index. By contrast, gold is heading for its best quarter in a year. Have a look at the juxtaposition (note: the dollar is down more against the broader Bloomberg index because emerging markets continued to do well):

Looking out across regional equities, Asian shares were lower as market struggled to reconcile Trumpspeak, conflicting economic signals out of Japan (decent CPI print versus lackluster household spending), and the upbeat data out of China. European shares are mostly red.