Morning Bid: China's positive PMIs set bullish tone

Asian markets are primed for a positive start to the new quarter following more evidence of the U.S."soft landing" on Friday and figures on Sunday that showed manufacturing and service sector activity in China last month accelerated in tandem.Trading volume on Monday will be lighter than usual with much of Europe still closed for the Easter holiday, but U.S. stock and bond markets are open again.

The exchange rates of Asia's two largest economies will once again be under the spotlight - Japan's yen remains in"intervention" territory, and while China's yuan is also under pressure against the dollar but is at a 30-year high against the yen. This suggests the PBOC doesn't want any volatility or abrupt weakness. But Beijing's predicament is exacerbated by the yuan's exchange rate with the yen — it is at 30-year high against the Japanese currency, giving Tokyo a competitive advantage on the world trade stage.

The manufacturing PMI rose to 50.8 from 49.1 a month earlier and export orders also picked up. The official services PMI rose to its highest since June and the composite PMI its highest since April — numbers that could give Chinese and global markets a lift on Monday.Investors will also be looking to see whether Japan's first quarter tankan business conditions surveys shows evidence of economic momentum and recovery in domestic demand.

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