Global manufacturing data is contracting

Factory activity in the eurozone contracted at the fastest pace in nearly six years.

The state of play: The bloc's aggregate PMI fell to 47.6 in March from 49.3, well below the 50 threshold that is the baseline for whether the sector is expanding or contracting. In Germany, Europe's largest economy, new orders fell to the lowest level in a decade. And, in France, both manufacturing and service sector PMIs are now in the red.

• Japan's manufacturing PMI also has fallen into contraction territory, following China's weakening readings that started falling below 50 late last year.

What's next: The market will likely be on pins and needles for the rest of this week awaiting readings on the U.S. economy. February's core PCE report will be released on Friday and other major U.S. data releases won't come until the week of April 1.  

• February retail sales, the ADP private sector jobs report and the March U.S. jobs report will be released next week. March's ISM manufacturing PMI report will come out the following Monday, followed by March CPI and PPI data the week of April 8.

The dramatic fall in bond yields can be traced back to the Fed's incredibly dovish March meeting, says Win Thin, global head of currency strategy at Brown Brothers Harriman, because investors "need to see confidence emanating from policymakers to feel confident as well."

• "Markets are left wondering 'what does the Fed know that we don't?' Thus, it all comes back to the data."

Go deeper: A new warning about the manufacturing labor shortage