Concerns for EU recession dragged markets lower.

The four largest economies in the Eurozone posted a decline in the manufacturing industry. Eurozone manufacturing PMI contracted to 47.7 points in March. It is worth noting that the drop in the French and German PMI to 46.7 from 50.2 and to 48.4 from 50.2 respectively, suggests that core countries are in a dire state.

The Eurozone finance ministers agreed to increase the size of the firewall designed to reduce the spread of the region's debt crisis. Germany did end up backing the fusion of the EFSF and the ESM. The news was positive for the euro until the release of economical data. 

In the UK a spike in the manufacturing index gave a lot of support to the Pound. Overall the UK has seemed to have embarked on the road to recovery in 2012 and rumors of a double dip have been withdrawn. Business confidence is also on the up and the Bank of England is expecting the 1st quarter GDP to be in the region of 0.3%.  A quarterly survey published today by the British Chamber of Commerce said a gauge of domestic orders at manufacturers rose to 6 in the three months through March from minus 13 in the previous quarter. For services, the domestic orders index increased to 7 from minus 9. On export orders, the measures for both industries jumped to the highest in a year. 

The U.S. once again may be emerging as a main engine for global growth and at an opportune time, as Europe slides into recession and China’s economy decelerates. ISM manufacturing increased from 52.4 to 53.4. An improving job market, rising stock prices and easier credit conditions are combining to lift U.S. consumer confidence and spending. 

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