Early Morning Call: Halifax house price index unexpectedly rises in March

Equity market overview

Equity markets fell overnight in Asia, led by tech stocks, and following the lead of European and US markets.

In Australia, trade surplus widened to A$13.87 billion in February, from a downwardly revised A$11.27bn the previous month. This was the largest trade surplus since June 2022, as exports fell 3% and imports declined by 9%.

In China, the Caixin services PMI increased to 57.8 in March from 55.0 in February. This was the fastest pace of expansion since November 2020. Details of the survey show that new orders rose at their fastest pace in 28 months, with new export orders growing at their quickest rate since the series began in September 2014.

This Thursday, European equity markets were hesitant at the open, showing marginal gains as some upbeat economic indicators were released. The Halifax house price index unexpectedly rose in March, up 0.8% compared to the previous month, when economists expected a 0.3% fall. Year-on-year (YoY), the index rose by 1.6%.

In Germany, industrial production rose more than expected in March, by 2% month-on-month (MoM). Economists anticipated a 0.1% rise.

In the US, weekly jobless claims are poised to be released at 1.30pm. Economists expect 200 000 new claimants for last week, after 198,000 the previous one.

Tomorrow, non-farm payrolls (NFPs) for the month of March point to 240,000 job creations, after 311,000 in February. Unemployment is expected to remain at 3.6%, and average hourly earnings to rise by 4.3% YoY.

Corporate indicators

On the corporate front, Levi Strauss is scheduled to post its earnings for the first quarter (Q1) before market open. The market expects earnings of 32 cents per share, which would be a 28% drop compared to the same quarter a year ago. Revenue is seen rising by 1.3% year-on-year, to $1.62bn.

Since the start of the year, Levi Strauss stock has risen nearly 17%, although it is still down 11% over the past 12 months.

Also expected today before the bell is Constellation Brands. Analysts anticipate earnings of $1.84 per share on revenue of just over $2bn.

Commodities

Oil prices were little changed this morning. Yesterday, EIA's latest inventories showed that US stockpiles fell more than expected last week, by 3.7 million barrels, as demand is rising. Crude exports climbed to 5.2 million barrels per day (bpd), their second highest level on record. The refinery utilisation rate remained near its highest level this year, slipping only 0.7 percentage point to 89.6%.

Gasoline stocks fell by 4.1 million barrels, while distillate stockpiles declined by 3.6 million barrels.

And as many markets will be closed on Good Friday, we'll know exceptionally tonight at 6pm what the Baker Hughes oil rig count was for this week. Last Friday, the Baker Hughes oil and gas rig count saw a drop of three rigs to 755 in the last week of March. This latest data means that US energy firms have seen the first quarterly drop in rigs since 2020, although, despite this drop, Baker Hughes says the total count was still up 82 rigs, or 12%, over this time last year.