Stocks Higher As Brexit Faces Delay – By LCG Research Team.


Trading on Wall Street was lacklustre, with the S&P moving between small gains and losses before moving lower into the close. News that a meeting between President Trump and China’s President Jinping Xi was being pushed back into April served to dampen demand for riskier assets. The postponement of the meeting raised questions over how ready the two sides are to put an end to the ongoing trade dispute and sign a trade deal.

These concerns were short lived. A report that more progress had been made in trade talks between US and China calmed market jitters and lifted Asian markets overnight. Sentiment was also supported by news that the UK Parliament voted to postpone Brexit. The BoJ offering a bleaker economic outlook owing to heightened overseas risks was shrugged off by traders. 

Parliament votes to extend Article 50

Ministers voted 412 – 202 in favour of delaying Brexit. How long for will now depend on what happens in Parliament next week. Theresa May will bring her Brexit deal back to Parliament for a third time. Another defeat and she will request a long extension, around two years. Should she win, then just a short technical extension. Her strategy here being that the fear of a long extension potentially resulting in Brexit not happening should bring Eurosceptics to rally behind her deal. A case of this deal or no Brexit. The pound slipped 0.3% following the vote and has remained steady since. Still comfortably above $1.32.

Oil hovers at 4 month high

Crude oil was steady around the flat line in early trade, as the recent rally paused for breath. Oil continues to hover around 4-month highs amid ongoing global production cuts and further supply disruptions in Venezuela. Trader attention will now turn to the International Energy Agency (EIA) for its monthly data due for release later today.

Euro higher ahead of CPI

The euro is moving higher versus the broadly weaker dollar in early trade. Its ability to hang on to these gains will depend on eurozone inflation figures due for release. After, German inflation failed to live up to expectations, traders will be watching Eurozone CPI figures closely. The expectation is that inflation in the region picked up to 1.5% year on year in February, up from 1.4% the month before. On a monthly basis, inflation is forecast to have increased by 0.3%, up from a decline of -1% in January.

Whilst these figures would offer some short-term support to the euro and solace to the ECB that that, although sluggish, eurozone inflation was picking up in the right direction. The fact is, inflation is still a long was off target. Growth is also dreary at best, meaning the prospects of an interest rate hike remain a significant distance ahead.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please note that 79 % of our retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money.



, , , , , ,

Related Posts

About the author

Jasper delivers regular commentary, seminars and webinars on market news, trading analysis, strategy and psychology. He is regularly interviewed by BBC News, Bloomberg, CNBC and Sky News, and has featured in The Times, Guardian and Daily Telegraph. Jasper hosts a weekly charting analysis webinar. He is qualified as a Chartered Market Technician (CMT) with the Market Technician Association, and has a degree in Finance and Economics.