US stock markets pulled back on Monday amid investor worries that first quarter earnings may be lower than previously expected as dollar strength hurts overseas earnings of US corporations. The Dow Jones Industrial Average finished down 1.1%, retracing nearly 0.3% for the quarter and snapping a three-quarter winning streak. The S&P 500 lost 0.9%, but managed to record a quarterly gain of 0.4%, extending its winning streak to nine quarters. The The ICE US dollar index, a measure of the US currency unit against a basket of six major rivals, advanced about 0.5% to 98.435. Tuesday economic reports indicated consumer confidence increased to 101.3 in March from 98.8 in February. The increase reflects improved labor market conditions as initial claims levels returned to their sub-300,000 trend over the past couple of weeks. The increase in Chicago PMI to 46.3 in March from 45.8 in February was below expectations, indicating contraction in business activity for a second consecutive month. US house prices rose slightly in January, with the S&P/Case-Shiller 20-city composite inching to 4.56% from 4.44%. Today at 12:00 CET Mortgage Applications will be released in US. At 13:15 CET March ADP Non-Farm Employment Change will be released. The tentative outlook is positive for the dollar. At 14:45 CET final Manufacturing PMI for March will be released. The tentative outlook is neutral. At 15:00 CET March ISM Manufacturing PMI will be released. The tentative outlook is negative.
European shares closed lower on Tuesday as investors booked gains after the best quarter in years spurred by the launch of the European Central Bank’s bond buying program. The DAX has surged 22 percent in the last three months, posting its strongest first-quarter performance since its creation in 1988. With weaker euro boosting competitiveness of euro-zone exports in overseas markets and the tide of liquidity lifting equity markets, shares in the euro-zone have climbed 18 percent overall. Euro inched lower against dollar. Investors booked profits on automaker stocks, with BMW falling 1.3 percent, and Renault slipping 1.5 percent. The Stoxx Europe 600 index dropped 0.6%, Germany's DAX 30 index and France's CAC 40 ended down 1 percent. No important economic data are expected today in euro-zone.
Nikkei fell today as investors took profits after weaker than expected tankan business survey results. Tankan survey indicated big manufacturers are planning to cut capital spending in coming months on concerns about weak domestic and global demand. The worsened business sentiment, slowdown in economy and prices increase the likelihood that the Bank of Japan will take additional measures to stimulate the economy at its April 30 rate review.
Oil prices fell on Tuesday as talks over Iran’s nuclear program continued. Investors fear that lifting sanctions would allow Iran to increase exports as the country is currently producing about 2.8 million barrels per day (bpd), but is allowed to export about 1 million bpd.
Gold prices extended losses for third consecutive day on Tuesday and recorded a second straight monthly loss as dollar grew stronger.
Corn prices fell 4.6 percent on Tuesday as US Department of Agriculture report revealed that US corn supplies at 7.745 billion bushels as of March 1 are bigger than expected and farmers are set to plant more area than forecast. Wheat prices fell also as the plantings were estimated to fall less than previously forecast.