Global shares were trading mixed Wednesday as Germany reported its factory orders surged in February, posting their third successive increase in another promising sign for Europe’s biggest economy.
The German Economy Ministry said orders were up 4.8% compared with January, the biggest rise since mid-2021. That followed gains of 1.9% in December and 0.5% in January, and was supported primarily by stronger demand from Germany itself and other countries in the 20-nation eurozone.
Germany’s DAX dipped 0.3% to 15,552.12. France's CAC 40 shed 0.2% to 7,327.12, while Britain's FTSE 100 added 0.3% to 7,655.37. The future for the Dow Jones Industrial Average was down 0.2%. The contract for the S&P 500 edged 0.1% lower.
New Zealand's benchmark fell 0.3% on Wednesday after the central bank surprised economists by imposing an aggressive half-point rate rise to bring its policy interest rate to 5.25%. It was the Reserve Bank of New Zealand’s 11th straight rate hike as it tries to cool inflation, which is running at 7.2%, far above the bank’s target level of around 2%.
“When it comes to two key drags on New Zealand’s economy - slowing global demand and housing - the assessment was also far from alarming, as the statement mentioned tourism as an offsetting factor for declining export revenues and the fall in property prices being consistent with tighter monetary conditions,” said Francesco Pesole, a strategist at ING.
Central banks have diverged somewhat in adjusting interest rates to reflect the latest trends in their economies. On Tuesday, Australia's central bank kept its rate at 3.6%, citing a need for time to assess where the economy is headed as inflation moderates.
Elsewhere in Asia, Japan’s benchmark Nikkei 225 lost 1.7% to 27,813.26. Australia’s S&P/ASX 200 inched up less than 0.1% to 7,237.20. South Korea’s Kospi added 0.6% to 2,495.21. Trading was closed in Hong Kong and Shanghai for the Qingming Festival, a holiday.
Investors are still split on whether the U.S. economy is headed for a recession and how badly corporate profits might drop. The biggest question remains what the Federal Reserve will do next with interest rates after hiking them furiously over the last year to get high inflation under control.
Reports on job openings and factory orders released Tuesday were weaker than expected and may have heightened recession fears. But they may also give the Fed reason to hold rates steady at its next meeting, for the first time in more than a year, offering a possible upside for markets.
One report showed employers advertised 9.9 million job openings in February, a sharper fall-off than economists expected. The Fed has been paying close attention to the numbers because the job market has remained so strong despite higher rates. The hope is that a softening in the number of openings could take some pressure off inflation without having to throw many people out of work.
A separate report showed that factory orders weakened in February more than economists expected.
A potentially more impactful report will arrive with Friday's update on how many jobs were created across the country last month.
In energy trading, benchmark U.S. crude lost 24 cents to $80.47 a barrel in electronic trading on the New York Mercantile Exchange. It rose 29 cents to $80.71 per barrel on Tuesday. Brent crude, the international standard, declined 13 cents to $84.79 per barrel in London.
The U.S. dollar slipped to 131.66 Japanese yen from 131.71 yen. The euro cost $1.0949, down from $1.0951.
