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Pre-Market: US Manufacturing Output Expected to Rise; FBI Opens Investigation Into High-Frequency Trading


New Zealand and Hong Kong join others in investigating alleged Forex fixing.

Stock futures pointed toward a higher open on Tuesday.

Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.26% to 16,451. Futures on the S&P 500 (INDEXSP:.INX) were up 0.26% to 1,869.50. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.25% to 3,595.25.

Investors await key economic data out today, including the US Purchasing Managers Index at 9:45 a.m. and the ISM Manufacturing Index at 10:00 a.m. Construction spending is expected at 10:00 a.m. as well, and Markit's global manufacturing PMI follows at 11:00 a.m. Before the market open, the ICSC-Goldman same-store sales for the past week surged by 3.6%. The US Gallup Economic Confidence Index remained flat. Redbook Chain Store Sales numbers arrive at 8:55 a.m.

Global economic data tops the list of headlines today. Chinese manufacturing sunk to an eight-month low, as the Markit/HSBC PMI fell to 48.0 in March from 50.3 in February. The sharper-than-expected decline fortifies expectations for an upcoming Chinese stimulus package. In Japan, the Bank of Japan's Tankan index, which measures manufacturing sentiment, missed estimates but moved higher in March. The move is expected to be short-lived, as the country's first sales tax hike since 1997 arrives today. Despite signs of a weaker economy in China, Asian stocks clocked their longest gain in a month and a half, led by casino and information technology stocks.

In Europe, manufacturing growth slowed and the unemployment rate remained stable. The eurozone PMI fell from February's 53.2 to 53.0 in March, however manufacturers reported a rise in output, thanks in part to price-cutting in order to incentivize business. The manufacturing PMI in the UK declined as well, dropping from 56.2 in February to 55.30 in March. While yesterday's drop in eurozone inflation rustled fears about the region's economy, some see a healthy outlook. Eurozone manufacturing remains near a three-year high, and German unemployment is down. European stocks moved higher, following confidence in Asian markets and looking ahead to an expected rise in US manufacturing output.

Following Switzerland's announcement yesterday, Hong Kong and New Zealand have each announced that they will join countries across the world currently investigating alleged Forex rate rigging. Meanwhile, a class-action lawsuit led by a dozen investors in the US and the Caribbean has been filed against 12 banks for conspiring to fix global foreign-exchange rates. The banks being sued include Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS), among others.

The FBI has opened an investigation into whether high-frequency trading firms abuse high-speed information by acting ahead of institutional investors. High-frequency, or speed trading, has been under the investigation of multiple authorities for several years now. The news comes as Michael Lewis releases his new book Flash Boys, which accuses high-frequency trading firms of rigging the markets. Arthur Levitt, former chairman of the US Securities and Exchange Commission, argues that not all high-frequency trading is predatory.

Twitter: @brokawbrokaw 
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