Market Highlight 01.04.2026

China’s manufacturing activity recovered in March, but the war in the Middle East has increased supply risks, with businesses beginning to feel the pressure. According to data released by the National Bureau of Statistics, China’s manufacturing PMI rose to 50,4 in March from 49 in February, ending two consecutive months of contraction. Meanwhile, the non-manufacturing PMI, which covers both services and construction activity, also returned to expansion territory, rising to 50,1 from 49,5 in the previous month. The recovery in economic activity in March was driven by factory workers returning to work and business operations normalizing after the extended Lunar New Year holiday in February this year. At present, Chinese manufacturers are beginning to feel the impact of rising production costs as the conflict in the Middle East has pushed up prices for crude oil, chemicals, and other industrial inputs. Higher commodity prices, together with surging global freight rates, are placing mounting pressure on the manufacturing sector. Even so, with more ample fuel reserves, forecasts suggest that China’s position as the world’s factory will be further reinforced this year, similar to 2020, when the country expanded its global market share as the Covid-19 pandemic disrupted competing supply chains.  

The USD weakened on Tuesday (-0,63%) after President D. Trump said the war in Iran could come to an end within the next two to three weeks. For March as a whole, the USD Index rose 2,26%, and is up 1,47% from the beginning of 2026 to date. Domestically, interbank USD/VND traded steadily around 26.340 - 26.350 yesterday. The effective daily ceiling stood at 26.357, up VND 2 from the previous day.

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