Oil prices tick up amid doubt on Iran war ceasefire; Chinese factory gate costs increase for first time in four years

Rolling coverage of the latest economic and financial news Asian stock markets rose overnight, with Japan’s Nikkei index and China’s CSI300 index both up by about 1.8%. The South Korean Kospi rose 1.5%, and Hong Kong’s Hang Seng nudged up 0.5%. Mohit Kumar , of the broker Jefferies , notes that markets “want to rally”. We do acknowledge that the ceasefire is fragile and risks of a short term escalation to gain an upper hand in negotiations remain. But the view that is that any dips would be a buying opportunity. We are still keeping the risk profile low given the potential for near term volatility. There are reports that Iran is charging fees to tankers going through the Hormuz Strait — They better not be and, if they are, they better stop now! Iran is doing a very poor job, dishonorable some would say, of allowing Oil to go through the Strait of Hormuz. That is not the agreement we have! I spoke with Bibi and he’s going to low-key it. I just think we have to be sort of a little more low-key. Industries that are more tied to energy as an input, or with intermediate inputs that have a high energy content, are witnessing higher factory gate prices despite soft domestic demand and the ongoing slump in the property sector. Earlier industrial profit data point in the same direction, with energy-intensive and metal industries seeing moderate improvements in margins, suggesting modest pass-through to end users. According to the NBS, oil and gas extraction PPI rose 15.8% m/m in March, while petroleum and coal processing PPI increased by 5.8%. Chemical products PPI rose 3.6%, while non-ferrous metal processing eased to 1.0% from 3.6% in February. 1.30pm BST: US CPI inflation rate and real earnings data for March 3pm BST: US factory orders 3pm BST: University of Michigan’s US consumer sentiment index Continue reading...

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