Brexit Moves Asia, May Secures Binding Concessions, U.S. Inflation In Focus

Theresa May secured legally binding changes to the Irish Backstop but the AG says its not enough to protect the UK.
Thomas Hughes
Asia markets

Brexit News Lifts Markets In Asia

Surprise Brexit news released in the early hours of Tuesday morning may allow U.K. lawmakers to reach consensus. Theresa May announced, with Juncker at her side, that she had reached legally binding changes. The changes are intended to smooth over the Irish Backstop issues but already face criticism. She and Juncker announced a trifecta of joint measures that includes an instrument, a statement, and a unilateral declaration of intent.

The news, unfortunately, hit a snag later in the morning when UK AG Cox said the concessions leaves the U.K. at risk. MPs are expected to vote on the Brexit deal today. If they decide to vote down May’s deal there are a half dozen or more possible outcomes including hard Brexit. There are only 17 days left until the Article 50 deadline and May needs 116 votes to pass the deal.

The Nikkei led indices higher in Asia. The Japanese index advanced 1.71% with shares of mainland Chinese stocks right behind. The Shenzen Composite was up almost 1.70% with the Shanghai Composite trailing at 1.10%. The Korean Kospi was up a tepid 0.90% with the Australian ASX posting a slight decline. Energy led in Asia and was supported by rising crude prices.

EU Markets Mixed After May Announcement

EU markets were mostly higher in early trading but turned mixed by midday. The series of Brexit Announcements inspired hopes that were soon dashed. Along with the caution expressed by AG Cox, EU President Juncker says this is the UK’s last chance. There will be no third chance or re-assurances on top of reassurances. The FTSE led advancing issues with a gain near 0.36% but traders were cautious.

The German DAX and French CAC both posted losses near -0.30%. German Finance Minister Olaf Scholz confirmed Commerzbank and Deutschebank were exploring a merger. Shares of both stocks slipped in today’s trading following a strong rally on Monday.

The U.S. CPI Confirms Pause And Patience Are Correct For FOMC

The U.S. markets were trading mixed on Monday despite the Brexit news and an as-expected read on consumer level inflation. The Brexit news was taken with a grain of salt, the Brexit deal has been brewing a long time with many twists and turns, and the CPI isn’t the good news it could have been.

Consumer level inflation rose 0.2% as expected. The core reading was reported as 0.1%, which is below expectation, as is the year over year comparison. On a year over year basis headline CPI rose 1.5% with the core at 2.1%, both lower the previous month and confirmation of slowing economic activity. The good news is that the FOMC is less likely to raise rates this year but that wasn’t enough to spark a continuation of Monday’s rally.

The S&P 500 and Nasdaq Composite were both hugging the flat-line in early futures trading. The Dow Jones Industrial Average was down about -0.25% as shares of Boeing drug on prices. Boeing is still under pressure following Monday’s crash of a 737 Max-8 jetliner, today’s news includes a downgrade of the stock from Edward Jones.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US