On Tuesday, the European Commission revised downwards its GDP growth forecast for the Euro zone to 1.6% from the previous year's 1.7% result and the 1.7% growth outlook reported in February, whereas the European Union's GDP growth forecast was lowered to 1.8%, following the last year's 2% growth and February's 1.9% projection.
Data on UK's PMI surprised investors on Tuesday by entering negative territory with 49.2 points, plunging from 50.1 points in March. Investor Expectations were missed by 2 points as result to falling output and rising uncertainty over global and domestic economic conditions, which are believed to contribute to a further downturn during the second quarter.
The Chinese Caixin manufacturing PMI showed a 0.3 point drop from the month before at 49.4 points, continuing the recessive trend that has pushed the measure in negative territory for the 14th consecutive month. The indicator was 0.4 points short of investors' expectations and it is thought that the economy is still in need for a solid recovery foundation.
Asian stocks surged with Australia leading the trend on Tuesday, following a rate cut by the RBA. While Japanese markets closed for Constitution day, the Shanghai Composite index spiked by 1.4% to show 2 979.75 points at 5:00 GMT, while the Hang Seng index fell 1.1% and traded at 20 828.69 points at 5:00 GMT.
The Australian Dollar dropped 1.3% after the RBA announced cutting rates to a record low 1.75%. The Aussie hovered around the $0.7700 mark before the announcement, and plunged to $0.7563 right after the news came out at 4:30 GMT. The RBA explains the rate cut with fears of a stronger Australian Dollar that can potentially harm economic adjustment.
Building approvals in Australia exceeded expectations, as the data release on Tuesday showed a 3.7% jump, topping the 3.1% gain in February. This is an unexpected positive development, as investors had forecast a 3% drop, however, the measure still did not reach last year's levels, remaining 6.5% lower.
In the United States, Markit's Purchasing Managers' Index for the manufacturing sector dropped to a score of 50.8 in the fourth month of the year, following March's 51.5 reading and falling behind analysts' forecast of 51.0 points. That's the worst result since September 2009.
According to Markit's official data released on Monday, the Eurozone's Manufacturing PMI grew more-than-expected in the fourth month of the year. The Eurozone's PMI was revised upward to 51.7 from the originally reported 51.5 points, following the previous month's 51.6 reading.
The German PMI showed expansion in the industrial sector as it surged to 51.8 points, displaying a positive trend from the previous month when the measure showed 50.7 points. Although the indicator was 0.1 points short to meet investors' expectations, the sector shows a consistent upward trend, surpassing the 50 point mark for the 16th consecutive month.
The Italian PMI reached this year's high at 53.9 points in comparison to the expectation of 53 points, continuing to top the 50 point mark and show an ongoing positive trend in the sector. The indicator experienced one-year lows in the first months of 2016, after encountering the highest level of 55.6 points over a one-year period in December.
The data release on the Spanish PMI showed a positive trend in the manufacturing sector as the measure grew by 0.1 points since the month before and showed 53.5 points which exceed expectations of 53 points. A number higher than 50 shows expansion, and operating conditions in the industrial sector of Spain have been advancing for 29 months in a
Bullion traded 0.4% higher on Monday, reaching $1,295.10 as a reaction to the Chinese manufacturing data release and the lowering chances of a rate hike. Gold is believed to be targeting the $1,300 mark which is the highest since January 2015, after expanding its gains for the second consecutive week.
Asian markets closed low on Monday with Japanese stocks leading the way, as the Yen gained strength following lack of monetary policy expansion by the BoJ. While Labour Day kept the Chinese and Hong Kong markets closed, the Nikkei index finished with a 3.1% slip at 16,147.38 points and the Topix was down 3.0% to show 1,299.96 points at a