ZCZC
BCN-01
MARKETS-WORLD
Pound extends rally as May secures Brexit deal revision
HONG KONG, March 12, 2019 (BSS/AFP) – The pound extended its rally in Asian
trade after British Prime Minister Theresa May hammered out a revision to her
controversial Brexit deal she hopes will be enough to push through
parliament.
The surge in sterling came as regional equity markets pushed higher
following a positive lead from Wall Street, with tech firms tracking an
upbeat outlook for Apple, energy firms rising with oil prices and dealers
cheered by improving US retail sales.
With a key vote on her agreement due later in the day, May said she had
secured “legally binding” guarantees with the EU over the main sticking point
of the Irish border question.
The news reinforced hopes the country will have some sort of deal in place
once it exits the bloc.
If her plan is still dismissed by MPs, there will be a vote Wednesday on
whether to continue to leave without a deal — considered economically
catastrophic by many — and if that fails to pass then another will take
place on extending the March 29 exit deadline.
“From today for three days the market will be closely watching the UK
lower house votes over Brexit,” Mizuho Securities said in a note.
The main scenario is that the Tuesday vote will be denied, the Wednesday
vote will approve avoiding a hard landing, and the Thursday vote will decide
the extension until the end of June, it said.
“If the extension is pushed back to December 2019 or later, that would be
favoured by the market with possibility of the second referendum that may
deny Brexit,” it said.
The pound has risen about 1.5 percent against the dollar since late
Friday, while it is up around two percent on the euro.
– ‘Fragile foundations’ –
The broadly upbeat mood has also lifted higher-yielding currencies against
the greenback as investors return to riskier assets.
MORE/MR/ 1017 hrs
ZCZC
BCN-02
MARKETS-WORLD-TWO-LAST
On equity markets Tokyo’s Nikkei went into the break 1.9 percent higher,
while Shanghai was up 1.5 percent and Hong Kong put on 1.3 percent.
Sydney rose 0.3 percent, Singapore jumped 0.9 percent and Seoul added 0.8
percent, with Taipei more than one percent higher and Manila piling on 0.6
percent.
The gains follow last week’s sharp sell-off that was fuelled by worries
over the global economy, with the OECD lowering its 2019 forecasts, the
European Central Bank sounding a negative note on the eurozone’s outlook and
Chinese trade taking a hammering.
However, OANDA senior market analyst Jeffrey Halley warned that things
could still turn ugly.
“Investors are clearly in an optimistic mood despite nothing having
changed materially around the world. Investors should be cautious, however,
because the rally is built on fragile foundations. It would be wise to stay
nimble in a headline-driven market,” he said in a note.
Dealers are keeping tabs on developments in the China-US trade talks, with
top officials holding phone talks Tuesday to discuss the next steps, though
the White House said no date has been set for a summit at which a final deal
can be signed.
Oil prices extended gains, lifting the region’s energy sector, as Saudi
Arabia extended output cuts, while Venezuela struggles under a blackout that
has hampered production in the country.
– Key figures at 0230 GMT –
Pound/dollar: UP at $1.3224 from $1.3149 at 2100 GMT
Euro/pound: DOWN at 85.14 pence from 85.53 pence
Tokyo – Nikkei 225: UP 1.9 percent at 21,521.61 (break)
Hong Kong – Hang Seng: UP 1.3 percent at 28,863.34
Shanghai – Composite: UP 1.5 percent at 3,070.49
Euro/dollar: UP at $1.1259 from $1.1248
Dollar/yen: UP at 111.41 yen from 111.20 yen
Oil – West Texas Intermediate: UP 27 cents at $57.06
Oil – Brent Crude: UP 33 cents at $66.91 per barrel
New York – DOW: UP 0.8 percent at 25,650.88 (close) London – FTSE 100: UP
0.4 percent at 7,130.62 (close)
BSS/AFP/MR/ 1017 hrs