Global manufacturing PMIs stayed above 50 in March for an eighth straight month, though growth slowed from February\u2019s 44\u2011month high. Resilience in Asia offset ongoing contractions in Emerging Europe, including T\u00fcrkiye, Russia and Poland. <\/p>\n
India\u2019s PMI fell to its weakest level in nearly 3.5 years, but still ranked second strongest among 27 countries. This kept India among the better performers despite the cooler reading. <\/p>\n
Input price inflation and reported supply-chain delays rose after the Iran conflict began on 28 February. Employment and stockpiling were broadly stable, while business confidence pointed to expectations of only modest war-related disruption to production.<\/p>\n
Given that global manufacturing is still expanding, the immediate concern is the surge in input prices and supply delays stemming from the Iran conflict. We have seen Brent crude oil prices climb over 15% in the past month to surpass $105 a barrel, directly reflecting these new geopolitical risks. Derivative traders should consider long positions in commodity futures, particularly oil and industrial metals, to capitalize on sustained inflationary pressure.<\/p>\n
There appears to be a disconnect between rising supply-chain risks and the high level of business confidence. Looking back, we saw similar initial optimism in early 2022 before the full impact of the Ukraine conflict was priced into markets. With the VIX volatility index currently below 20, buying call options on the VIX or major indices offers a cost-effective way to protect against the market’s potential complacency.<\/p>\n
The data shows a clear divergence, with resilience in Asia offsetting contractions in Emerging Europe. This trend is visible in market performance, where India\u2019s Nifty 50 has continued its climb while indices in Poland and T\u00fcrkiye have lagged since the conflict began. A relative value trade, such as going long on Asian equity index futures while shorting those from Emerging Europe, could prove effective in the coming weeks.<\/p>\n
Sticky inflation from this supply shock may force central banks to hold interest rates higher for longer than the market currently expects. Right now, Fed funds futures are still pricing in a potential rate cut by the end of the year. This suggests an opportunity to use interest rate swaps or sell short-dated bond futures to bet against these dovish expectations.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" March global manufacturing PMIs remained above 50; growth eased, Asia resilient, inflation and delays rose.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-46301","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t