05 April 2022
3 mins clock icon

India manufacturing slowed in March

By Edward Bell

  • Manufacturing activity in India slowed in March according to the S&P Global PMI. The headline index fell to 54 from 54.9 in February but nevertheless represents still health levels of growth. New orders moved lower compared with February and were at their lowest level since September last year. India’s economy will be highly exposed to the effects of higher input costs, particularly in the manufacturing sector, as the war in Ukraine contributes to higher commodity prices and disorderly supply chains.
  • Turkey’s CPI inflation came in narrowly below consensus projections for March, at 61.1% y/y compared to 61.5%, but this was up from 54.4% in February and marked the 10th consecutive month of accelerating price growth, taking the headline print to a 20-year high. Turkey is struggling with the same upwards pressure from global food and energy prices as the rest of the world, but also faces its own particular challenges related to the sharp currency depreciation of the past year, and core inflation also picked up (from 44.1% to 48.4%). PPI inflation rose to 115%, a 27-year high for the measure, suggesting that price pressures on consumers will remain challenging in the coming months as firms look to pass some of these costs on. With the one-week repo on hold at 14.0% since December, this latest inflation print pushes real interest rates in Turkey deep into negative territory.
  • The central bank of the UAE estimated non-oil GDP growth of 7.8% y/y in Q4 2021, bringing the headline GDP estimate to 2.3% for last year, on par with our own estimate of growth of 2.5%. For this year the central bank is expecting growth of 4.2% compared with our projection of 5.7% given our anticipation of faster oil GDP growth. On inflation, the central bank expects price growth of 2.7% on average this year but noted upside risks due to the “war in Ukraine” and disruption to supply chains, particularly for food.

Today’s Economic Data and Events

  • 18:00 US ISM Services index March: forecast 58.4

Fixed Income

  • US Treasuries started the week on a mixed footing as markets responded to signs of new sanctions being placed on Russia. On the front end, Treasuries rallied with 2yr UST yields falling by 3bps to 2.4221% while longer bonds fell marginally; the 10yr UST yield added 1bps to settle at 2.3951%.
  • Bond markets in Europe rallied strongly as the prospect of new EU sanctions are in focus. Bund yields fell 5bps on the 10yr while gilt yields also dropped, off by 6bps to 1.544%.
  • Indian bonds closed relatively unchanged after an initial slump at the start of trading. Yields on the 10yr Indian bond settled just under 6.9%. South African bonds rallied with yields down around 4bps to 9.906%.


  • The risk of new EU sanctions on Russia did little to help the single currency overnight with EURUSD falling steadily from mid-day levels at around 1.1050 to close at 1.0972, down 0.6%. Markets generally moved toward the dollar with USDJPY rising by 0.2% to 122.79 while GBPUSD was essentially unchanged.
  • USDCAD moved with oil in support of the loonie. The pair closed down 0.3% at 1.2485 as oil prices have started to move higher again. AUDUSD also pushed upward, settling at 0.7543, a gain of 0.6%.


  • Equity markets started the week on the front foot, and European indices gained despite the threat of new sanctions on Russia. The composite STOXX 600 added 0.8% yesterday as the DAX added 0.5% and the CAC 0.7%. The FTSE 100 rose by a more muted 0.3%, supported by housebuilders.
  • In the US, Twitter was a standout gainer yesterday, helping drive the major indices upwards. The Dow Jones and the S&P 500 climbed by 0.3% and 0.8% respectively, but the NASDAQ was the primary climber yesterday, adding 1.9%.
  • Locally, the DFM dropped -0.5% but the Tadawul (0.6%) and the ADX (1.3%) both closed higher.


  • The risk that the EU may follow through and sanction Russian energy exports directly helped to push oil higher overnight. Brent futures settled up at USD 107.53/b, a gain of 3% with more on the way this morning. WTI added a bit more than 4% to push comfortably above USD 100/b, closing at USD 103.28/b and extending gains in early trade today.
  • In physical markets, Saudi Aramco raised its official selling prices to all destinations with Arab Light to key Asian markets at a premium of USD 9.35/b for May deliveries. Other NOCs in the region are likely to follow suit with substantial hikes to their selling prices in the coming days.

Click here to download charts and tables

Written By

Edward Bell Head of Market Economics

There was an error during your feedback!

Your feedback is valuable to us and will help us improve.

More from Edward Bell

Related Articles

Subscribe to our newsletter and stay updated on the markets

There was an error during your newsletter subscription!

Please try again to stay updated with all the latest financial news and valuable insights.

Thank you for newsletter subscription!

To stay updated with all the latest financial news and valuable insights.