Manufacturing Numbers Have ETF Ripple Effect

April 1st at 10:00am by Tom Lydon

It’s the first day of the rest of the quarter, and so far it’s going well. The markets and exchange traded funds (ETFs) have surged ahead on good manufacturing data and weekly unemployment figures.

Ahead of tomorrow’s Labor Department report, a government report showed the claims for jobless benefits declined more than expected last week. Economists expect tomorrow’s report to show that jobs were added in March, which would be only the second month of jobs growth since the start of the recession.

Meanwhile, manufacturing surged to 59.6; any number above 50 is a sign of expansion. The growth is the fastest pace since July 2004. The increase is being attributed to improving demand in the United States and Asia and a need for businesses to begin the work of rebuilding depleted inventories. Industrial Select Sector SPDR (NYSEArca: XLI) is up nearly 1% this morning. The data is having

The U.S. dollar is surging to seven-month highs against the Japanese yen on the back of the manufacturing data. Japan is currently struggling with deflation and today marks the start of a new fiscal year in the country. Japanese companies may send money back overseas that had originally been repatriated to yens before the books close. CurrencyShares Japanese Yen (NYSEArca: FXY) is down 0.5% so far this morning.

It wasn’t just in the United States that the manufacturing sector expanded. China and the rest of Asia, in particular, saw their activity surge. The figures from China signal that Asia’s improving exports could continue their winning streak. BLDRS Asia 50 ADR Index (NASDAQ: ADRA) is up more than 1.5% this morning.

Europe also saw its manufacturing expand at the fastest pace in more than three years last month, also powered heavily by exports and a weak euro. In fact, that weakness helped drive record export growth in Germany, the Netherlands and Ireland. iShares MSCI EMU (NYSEArca: EZU) is up almost 2% today.