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A ray of hope for the global economy from data showing a rebound in Chinese factory output, Turkish election goes down to the wire, and the U.S. jobs report will be watched for signs the bond rally is justified. Here’s what’s moving markets. 

China’s Factory Rebound

China’s first official economic gauge for March signaled a stabilization in the world’s second-largest economy, easing one of the biggest worries for the global outlook. The manufacturing purchasing managers index rose to 50.5 from 49.2 last month, the biggest increase since 2012 and exceeding all estimates by economists. That’s good news for global investors, as China’s weakening demand had weighed on sectors such as auto producers and commodity exporters worldwide. However, there is still a way to go -- tariffs and uncertainty about whether a deal with the U.S. will be signed are weighing on trade and there is no sign yet of a rebound in domestic consumption.

Turkey’s Election Fight 

Turkey’s ruling party was ahead in municipal elections and claimed a contested victory in Istanbul while looking likely to lose control of the capital, the culmination of a crucial vote that’s testing the popularity of President Recep Tayyip Erdogan. Early results showed the opposition taking control of Mediterranean coastal cities from Erdogan’s alliance and flipping the capital Ankara and surrounding areas. Even before the final figures were announced, Erdogan’s ally and former prime minister Binali Yildirim said he won the race in Istanbul, Turkey’s commercial hub, a claim rejected by the opposition.

Market Open

Asian stock futures rose after U.S. equities closed out their strongest quarter since 2009 on a high note. Ten-year Treasury yields ended Friday above 2.40 percent after plunging earlier in the week. The dollar ended last week mostly weaker, though up against the yen. Oil jumped while gold's advance was modest. The Turkish lira dropped as the market digested the implications of the elections. Traders will be on alert this week as U.S.-China trade talks resume when Vice Premier Liu He leads a delegation to Washington, days after negotiations in Beijing, and Britain’s Parliament tries again to adopt a Brexit withdrawal deal. The Reserve Bank of Australia has a monetary policy decision and the country also hands down its federal budget. The U.S. March employment report will be the focal point at the end of the week. 

A Telling Week for Bonds 

Treasury yields have sunk as if a U.S. recession is nearly here. The bundle of important economic reports coming this week could show those fears got overblown. The yield on benchmark 10-year notes dropped to a 15-month low of 2.34 percent last week, but there’s been little tangible U.S. data to justify that.  Bond investors get some real information this week, though. The biggest event is Friday, with the March jobs report. There will also be insights into how much Americans are spending at retail stores as well as several readings on how much factories are being asked to produce. A handful of Fed officials are scheduled to speak, albeit nobody from the group that gets to vote on central-bank policy this year.

Indian Rates Going Lower?

Indian markets have staged an eye-catching comeback in March after taking a drubbing in the first two months of the year. Foreign investors who shunned rupee bonds and stocks in the wake of border skirmishes with Pakistan have returned as tensions eased, with inflows eclipsing those for closely-watched emerging-market rival Indonesia. Buyers are also emboldened by speculation that the central bank will add to its surprise February rate cut this week and for Prime Minister Narendra Modi’s government to win a second term. The RBI will lower the benchmark repurchase rate by 25 basis points to 6 percent on April 4, according to the median estimate in a Bloomberg News survey. 

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

• BOJ should avoid deepening negative rates, bank lobby says. 
• Commodities best quarter since 2016 may be tough act to follow. 
• U.S. sale of F-16 jets to Taiwan has China on edge.
• Top Indonesian fund buys stocks to beat post-election rally. 
• Dying factory becomes symbol of China might. 
• Junta-backed government more likely in Thailand. 
• Mystery owner nets $30 million for wine stash. 

To contact the editor responsible for this story: Adam Haigh at ahaigh1@bloomberg.net

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