| Good Morning. Chinese manufacturing posts biggest improvement in more than a decade, Goldman Sachs struggles to reset the narrative and FBI Director Wray says Covid-19 most likely originated from a lab incident in Wuhan. Here's what people are talking about. China's economy is showing signs of a stronger rebound after Covid restrictions were abandoned, with manufacturing posting its biggest improvement in more than a decade, services activity climbing and the housing market stabilizing. The PMI figures add to other signs of a rebound in the economy and put policymakers in a good position ahead of next week's National People's Congress, where a new growth target will be disclosed. FBI Director Christopher Wray said his department previously concluded that the Covid-19 virus most likely originated from a "potential lab incident" in Wuhan, China, contradicting scientific claims that it emerged naturally like other previous outbreaks. The Federal Bureau of Investigation tweeted an excerpt from Wray's interview with Fox News on Tuesday night. His remarks follow reports that an Energy Department classified assessment determined that the virus was the result of a lab leak, although that conclusion was given a "low confidence" rating.  | Goldman Sachs set out to reset the narrative and breathe new life into its stock. Investors aren't buying it just yet. One after another at the bank's investor day on Tuesday, Goldman's top brass offered a glossy portrait of the firm's strengths and underscored it can consistently belt out predictable profits in years ahead. But a dearth of ambitious new targets and messaging whiplash over what's to happen with the troubled consumer business underwhelmed the market. The stock slid 3.8%. Ukrainian officials are signaling that the besieged eastern city of Bakhmut may soon be impossible to defend as Russian troops level the area. "The enemy is gradually destroying everything that can be used to protect our positions, for reinforcement and defense," Volodymyr Zelenskiy said in a video address Monday evening. The top commander in charge of Ukraine's ground forces, Oleksandr Syrskyi, said the Kremlin has deployed some of the best-trained assault units from the Wagner mercenary group to break through Ukrainian lines and encircle Bakhmut. European stocks are set for a flat start as investors weigh Chinese economic data. Tesla's leaders will discuss long-term plans at an investor day. ECB Governing Council member Francois Villeroy de Galhau speaks at the French National Assembly's finance committee. Italy will reportedly oppose a plan to start phasing out combustion engine cars at a meeting of EU ambassadors. Expected data include Italy GDP and Germany CPI inflation. Beiersdorf and EDP are scheduled to release earnings results. This is what's caught our eye over the past 24 hours Spot gold has been on the retreat since the start of February, driven lower by an expectation that central banks will hike interest rates more. Yet purchases by the same sector might be the last line of defense to stop a price collapse. Bullion prices have fallen 7% since early February, when the start of the Lunar New Year brought a dearth of physical demand. At ~$1,825/oz (after a pop on Tuesday), it's just above the level where central banks — China and others — provided a floor for much of last year as they bought 1,136 tons of metal. Normally, the investment sector is a key driver of price. Yet between November and January, price and ETF holdings went in opposite directions. This was mainly the result of physical demand from China for physical gifting as the Lunar New Year followed reopening. And for much of last year, the trend in prices was much more upbeat than either flows or factors like real yields and currency moves could explain. A model based on inflation-adjusted Treasuries and the Bloomberg dollar index, as well as ETF flows, has a record of accurately predicting gold prices. Yet prices went as much as $367 (or 19%) above their modeled values. Much of this was because central bank whales were snapping up precious metal. And the level at which they bought seemed to be close to the $1,800, where prices were unusually well supported. However, there's no guarantee that this is an area in which they'll again be active, as support at this level faltered in September and seemed to shift closer to $1,600. Central banks, particularly developing market ones that run large current account surpluses and have outsized dollar exposure, tend to be long-term accumulators of the metal, as its strong inverse correlation to the US currency makes it a hedge and portfolio diversifier. At the right entry point, they see it as a long-term investment. The question then, with gold prices in retreat, is at what level they step in, with a bid that supports the market. This commentary first ran on Markets Live on the Bloomberg Terminal, where Eddie van der Walt is Deputy Managing Editor based in London. Follow him on Twitter at @EdVanDerWalt This week, the MLIV Pulse survey focuses on active versus passive investing. How likely is it that an actively managed fund that outperformed in one year will outperform the next year? Would you call the growth of passive index funds a bubble? Share your views here. | 
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