China’s services sector activity grows at fastest rate in six months: Caixin survey
China’s service sector activity expanded at the fastest rate in six months, as its services purchasing managers index for February rose to 55, sharply higher than the 52.9 recorded in January.
In its report, Caixin said this was also faster than the series average of 53.7. The 50-point mark separates expansion and contraction in activity on a monthly basis.
The upturn, Caixin reported, was supported by the strongest rise in new business since April 2021 as the relaxation of Covid-19 restrictions helped to lift customer numbers and demand.
New export order growth also accelerated, hitting the highest in almost four years.
— Lim Hui Jie
Japan services sector grows at fastest pace in eight months for February
Japan’s services sector in February expanded at its fastest rate since June 2022, a private survey from au Jibun bank showed.
The country’s services purchasing managers index came in at 54, higher than the 52.3 in January. A reading above 50 signals expansion, while a reading below 50 indicates contraction for the sector.
In its report, the bank noted that Japanese service providers indicated that business activity rose sharply midway through the first quarter of 2023.
Activity increased at the fastest pace in eight months, “amid a notably stronger rise in new business inflows,” the report said.
— Lim Hui Jie
Singapore sees slowing momentum in business conditions
The headline S&P Global Singapore purchasing manager’s index fell to 49.6 in February, below the 50-point mark that separates growth and contraction.
February’s print saw a decline from January’s reading of 51.2, signaling “renewed deterioration in private sector conditions,” S&P said in a release.
It added that purchasing activity shrank in February due to moderation in demand conditions.
“Business sentiment worsened, while caution with respect to hiring and purchasing brought the overall PMI into contraction territory,” said Jingyi Pan, economics associate director at S&P Market Intelligence.
“While the latest developments supported the easing of supply issues and lowering of price pressures for businesses, the lack of improvements in the demand picture does not spell good news for the Singapore private sector in the months to come,” said Pan.
— Jihye Lee
Inflation in Japan’s capital city slowed in February
Tokyo’s consumer price index rose by 3.3% in February, in line with economists expectations polled by Reuters, and a lower print than January’s 4.3% government data showed.
Overall, CPI for the capital city reached 3.4%, a cooler print from the 4.4% seen last month, while prices excluding food and energy for Tokyo rose by 1.8%, also a slower pace than 1.7% from January.
The Japanese yen slightly weakened to 136.7 against the U.S. dollar.
— Jihye Lee
CNBC Pro: Jumping on the China bandwagon? Analyst reveals whether A-shares or H-shares are a better bet
China’s reopening from the pandemic has been a big theme in 2023. But the recent pullback in Chinese stocks is an opportunity for investors to snap up opportunities, according to Bernstein analyst Rupal Agarwal.
While A-shares and H-shares are both avenues for investors to gain exposure to the China reopening theme, Agarwal said she believes one is the better option.
Japan’s jobless rate falls to lowest level since February 2020
Japan’s unemployment rate for January came in at 2.4%, 0.1% lower compared to December and slightly below economists’ expectations of 2.5%
This is the lowest unemployment rate since February 2020, according to Refinitiv data.
Japan’s jobs to applicants ratio also stood at 1.35, down from 1.36% in December.
— Lim Hui Jie
10-year Treasury yield poised to move higher, says Credit Suisse
Now that the 10-year Treasury yield has broken above the 4% psychological barrier, it should continue to move higher, according to Credit Suisse.
“This should open up a deeper rise within what we now expect to be an even broader range. Next supports are seen at 4.11%, then the 4.325% October high,” analyst David Sneddon wrote in a note Thursday.
The yield on the benchmark 10-year was last up nearly 8 basis points to 4.073%.
10-year Treasury yield year-to-date
Fed’s Bostic says he’s ‘firmly’ in favor of sticking with quarter-point hikes
Atlanta Federal Reserve President Raphael Bostic said he thinks the central bank can stick with quarter-point interest rate hikes.
“I am still very much of a mindset that slow and steady is going to be the appropriate course of action,” Bostic told media members. He added that he favors rate hikes of 0.25 percentage point, a step down the Fed took at its meeting a month ago.
“Right now I’m still in very firmly in the quarter point move pacing,” he added.
Some other Fed officials have said they are open to hiking by half a point when they meet later this month. Market pricing currently points to that move, though the probability for a half-point increase has risen in recent days.
CNBC Pro: A.I. is all the rage. This investor shares a less obvious way — and one stock — to play the trend
Artificial intelligence has taken Wall Street by storm since since ChatGPT was launched and went viral — causing a surge in interest among investors in what stocks could benefit from the trend.
But there’s another way to get into the AI buzz that’s happening right now, according to tech investor Mark Hawtin, who names one stock to play it.
The 200-day was at about 3,940 Thursday, and the index fell below that level but recovered Wednesday. The S&P 500 was trading near that level Thursday morning.
The 200-day is literally the average of the last 200 closing prices, and it is viewed as a momentum indicator for a stock or index. Stock chart analysts would view it as a negative signal if the index were to close below that level and stay below it.
Implied probability of U.S. debt default at highest since 2013, MSCI says
Credit-default swap (CDS) trading on U.S. Treasury bonds has picked up since January, with implied default probabilities increasing “to levels not seen since the 2013 debt-ceiling debate,” MSCI researchers Andras Rokob and Andy Sparks wrote in a blog post Thursday.
CDS spreads have widened out in 2023, echoing similar moves in both 2011 and 2013, during two other episodes that saw battles between Congress and the White House over raising the U.S. debt ceiling, the researchers wrote.
“Assuming a 95% recovery, the CDS market’s one-year implied default probability was 11.3%, as of Feb. 24, up significantly from the 3.3% probability prevailing at the beginning of the year,” MSCI said. “The consequences of a potential default by the U.S. government extend beyond the immediate impact on holders of Treasurys,” Rokob and Sparks warned. “Major market dislocation and a sharp slowdown in economic activity could both be realistic possibilities.”
— Scott Schnipper;CNBC’s Jeff Cox contributed to this report