HONG KONG, March 18, 2019 (BSS/AFP) – Asian markets rose Monday as
investors tracked a positive lead from Wall Street on optimism over the
China-US trade talks, while attention turns to the Federal Reserve’s next
policy meeting this week.
The pound held gains as Prime Minister Theresa May tries to push her EU
divorce deal through parliament for a third time, failure of which could see
Britain extend its exit deadline or possibly crash out of the bloc.
The broad-based gains built on last week’s advance as top officials from
the world’s biggest economies work on an agreement to end their long-running
tariffs spat, which was a major drag on markets at the end of 2018.
While there are few details on the talks as they stand — and a floated
summit between Donald Trump and Xi Jinping looks to be later than expected —
upbeat comments from both sides are keeping investors broadly happy for now.
“The signing of a trade deal between the US and China would eliminate one
major headwind for global markets and is currently the more probable outcome
according to most analysts,” said James Hughes, chief market analyst at
AxiTrader
“There is more of an incentive for both superpowers to make a deal because
it is economically in their best interests. This is especially the case given
the growing US trade deficit due to falling exports to China.”
In early trade Hong Kong gained 0.6 percent and Shanghai was up 1.2
percent, while Tokyo went into the break 0.6 percent higher. Sydney edged up
0.2 percent and Singapore was 0.3 percent up while Seoul, Wellington, Taipei
and Jakarta were also stronger.
– Third time lucky for May? –
The Fed’s next meeting will be closely followed in hopes it will give an
idea about its plans for interest rates, with some observers suggesting it
will pare its pace of hikes in the face of a slowing global economy.
With inflation still tame as US growth decelerates, economists also say
the central bank will lower the number of hikes they expect this year, from
the two projected in December, while there is even talk of a possible cut at
some point.
The softer rate outlook has helped push the pound up against the
greenback, with the British unit also supported by easing worries the country
will crash out of the EU without a deal.
May is expected to put her agreement back to MPs for a third time
Wednesday. If it passes she will ask her EU counterparts to extend the March
29 exit deadline by a few months.
But if it is again tossed out she could ask for much more time, with
speculation swirling that May could call a general election or even another
referendum.
“The two most likely scenarios… are that Theresa May’s deal finally gets
approved on a third attempt, or that Brexit is delayed on the condition of a
referendum or general election being held,” said AxiTrader’s Hughes.
“Both would be very positive for the pound.”
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.6 percent at 21,579.66 (break)
Hong Kong – Hang Seng: UP 0.6 percent at 29,170.81
Shanghai – Composite: UP 1.2 percent at 3,057.82
Pound/dollar: UP at $1.3290 from $1.3286 at 2100 GMT Friday
Euro/dollar: UP at $1.1330 from $1.1325
Dollar/yen: UP at 111.58 yen from 111.51 yen
Oil – West Texas Intermediate: DOWN 20 cents to $58.32 per barrel
Oil – Brent Crude: DOWN 16 cents to $67.00 per barrel
New York – DOW: UP 0.5 percent at 25,848.87 (close)
London – FTSE 100: UP 0.6 percent at 7,228.28 (close)