ZCZC
BCN-19
EUROPE-MARKETS-STOCKS
Trade deal optimism shines on stocks
LONDON, Aug 29, 2018 (BSS/AFP) – Stock markets mostly climbed on Tuesday,
with Wall Street pushing higher again the day after setting records following
a trade deal between the United States and Mexico.
Equities had already been enjoying a run-up after Federal Reserve boss
Jerome Powell last week indicated that the US central bank would not
aggressively raise interest rates.
“US stocks are adding to a recent run in early action that has the markets
back in record high territory, with the global markets finding support from
yesterday’s bilateral trade agreement between the US and Mexico, which
appeared to alleviate some of the festering uneasiness,” said analysts at
Charles Schwab brokerage.
In opening trade, the S&P broke through the 2,900-points level for the
first time ever, while the Nasdaq Composite also blew by the intraday record
it set the day before.
The Dow was 0.2 percent higher in late morning deals.
In Europe, London closed 0.5 percent higher, while Paris added 0.1 percent.
Frankfurt bucked the trend, ending the day down nearly a tenth of a
percentage point after having spent most of the day in the green.
The US-Mexico agreement raises hopes that the wider North American Free
Trade Agreement which also includes Canada and was rejected by the White
House soon after US President Donald Trump’s election, can be salvaged after
Canada rejoins talks on Tuesday.
Analyst Patrick O’Hare at Briefing.com said that it is still unclear
whether a three-way deal with Canada can be reached by the end of the week as
needed, or whether the US Congress would approve a bilateral deal with
Mexico.
“For now, market participants seem to be content knowing something got done
at least with Mexico,” he said in a note to clients.
Mizuho Securities said in a note to clients that investors are monitoring
“the US-Canada negotiations… and the impact on US-China trade talks”.
Monday’s agreement comes after officials from Washington and Beijing last
week held talks aimed at easing trade tensions that have seen them hit each
other with tariffs on tens of billions of dollars worth of goods.
MORE/HR/1022
ZCZC
BCN-20
EUROPE-MARKETS-STOCKS 2 LAST LONDON
– ‘Festive mood’ –
While the meeting did not achieve any breakthrough, the fact it took place
at all was seen as a good sign.
Stephen Innes, head of Asia-Pacific trading at OANDA, said dealers were “in
a festive mood” as the Mexico deal removed “one major hurdle that has been
haunting North American investors for months”.
He added: “Markets are revelling in any trade positives… After all, a
deal is a deal.”
However, Trump appeared to temper expectations for a fresh round of talks
with China, saying after announcing the new pact that “it’s just not the
right time to talk right now” before adding: “eventually, I’m sure that we’ll
be able to work out a deal”.
In foreign exchange trading, Turkey’s lira weakened to around 6.25 against
the dollar, with dealers continuing to fret over the country’s financial
crisis.
The pound slid after Prime Minister Theresa May indicated that a no-deal
Brexit would not be a disaster for Britain, playing down warnings of serious
consequences for the UK economy.
It later rebounded briefly following a report from the Evening Standard
newspaper that Mark Carney had been approached about staying on another year
as head of the Bank of England following the end of his term in June 2019.
“For me the Carney news (if true) is sterling positive,” said James Hughes,
chief market analyst at AxiTrader, in a tweet.
BSS/AFP/HR/1025