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Morgan Stanley cuts China’s 2022 economic growth forecast, US jobs data due

US dollars and Bitcoin

The S&P/ASX 200 closed flat on Friday, but gained 1.2% for the week. US equity futures are higher ahead of the release of non-farm payrolls data in the US tonight.

Consensus is for 490,000 new jobs added in March and a further contraction of the unemployment rate to 3.7%. The American economy added 678,000 jobs in February, the most in seven months and way above market forecasts of 400,000. 

By the end of March, US stocks experienced the first losing quarter since the pandemic bear market, and Treasuries saw the worst losses in at least five decades. 

Markets across Asia are mixed.

Morgan Stanley cut China’s 2022 economic growth forecast sharply, while Citigroup has warned of risks to the second-quarter outlook as the nation sticks to a strict Covid Zero approach to combat infections, according to Bloomberg. 

Economists at Morgan Stanley led by Robin Xing downgraded their full-year forecast to 4.6% from 5.1% on Friday. China’s “strict adherence” to its no-tolerance policy is expected to stay in the coming months “despite the more transmissible omicron,” they said.

The ASX 200 closed the month of March up 5.7%, but has dropped 1.3% year to date.

The Energy sector was the biggest gainer, up 9.6% for the month, as oil prices rose with Russia’s war against Ukraine causing geopolitical tension and supply concerns. Woodside rose 12% in March and Santos was up 6.6%.

The Materials sector was up 8.2% for the month with BHP gaining 11% and Fortescue Metals Group rising more than 16%.

Banks were higher, CBA gaining 11.6% for the month and NAB up 10% as the Financials sector rose 8.3%.

Information Technology went in and out of favour, but the sector gained 13% by the end of the month, with Block up almost 6% and WiseTech Global rising 12%.

The Australian dollar strengthened to trade above US75c against the US dollar in March.

Michele Bullock has been named Reserve Bank of Australia deputy governor, promoted after Guy Debelle left last month to join Andrew Forrest’s Fortescue Future Industries.

Tencent’s WeChat has suspended some accounts associated with so-called non-fungible tokens (NFTs) and clarified the rules around these digital collectibles, according to CNBC. In China, there is no regulation around NFTs yet. Users can buy these digital collectibles from a marketplace but secondary trading is heavily restricted. Official accounts verified by Tencent can display digital collectibles but cannot offer secondary sales.

AUD/USD US74.47c

WTI currently US$100.92 a barrel

Brent crude oil US$107.40 a barrel

Spot gold US$1936.31 an ounce

Bitcoin US$44,640

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