European and British equities rally after UK vote on Brexit without compromise By Reuters

By Tom Arnold

LONDON (Reuters) – European stocks hit a five-month high on Thursday, after the British parliament lifted a major source of uncertainty by rejecting a Brexit without agreement, as gloomy economic data and trade fears slowed the gains.

The pan-European stock index jumped 0.7%, its highest level since October after the British parliament vote on Wednesday.

The vote paves the way for a Brexit delay beyond the deadline of 29 March, which could lead to a divorce agreement with the EU or even another referendum.

British equities also rose 0.5%.

Analysts at Goldman Sachs (NYSE 🙂 told their clients that the probability of a Brexit without a transaction fell from 10% to 5% after Wednesday's vote. Although the vote has no legal force, it has considerable political strength.

However, data from China, indicating further weakness in the world's second-largest economy, have allowed for the continued flow of economic indicators that paint a dull picture of the global economy – the numbers showed declining industrial production at age 17 and stagnant retail sales.

This pushed the MSCI Asia-Pacific equities index out of Japan to a 0.7% decline, while global equities have the upper hand on water, staying well away from the rest of the world. peak of 4 months and a half reached recently. Wall Street was ready for a slightly firmer opening, showed the futures.

Reports that China was trying to delay trade talks also weighed on sentiment.

"Global markets have started well this year, but people are now starting to focus on the real issues, such as a trade deal (US-Chinese), the Brexit and the hope that the Fed will increase its rates eventually again this year before perhaps cutting rates, "said Peter Lowman, Investment Director at Investment Quorum.

He was talking about the US Federal Reserve that recently signaled that it was insisting on taking a break from rate hikes. Some players, however, believe that interest rates could still be raised once again before calling for his tightening campaign.

Lowman noted that despite the slowdown in growth in China, the markets have experienced an impressive recovery this year, with the MSCI index having risen about 10%, under the impulse of the core change of the Fed.

But many remain skeptical about the distance that can still be traveled. Trade negotiations also weighed on investors after President Donald Trump declared that he was in no hurry to reach an agreement. Trump and his Chinese counterpart Xi Jinping were to hold a summit at President Mar-a-Lago's Florida property later this month, but no date has been set for a meeting.

"Before concluding that the market remains good, we would like stock prices to be supported by stronger macroeconomic data, supported by better earnings trends and confirmed by stable upward returns," said David Lafferty, Strategist. market leader in Natixis, told customers.

BREXIT

On the foreign exchange market, most shares were conducted in the pound sterling, which rose more than 1% after Wednesday's vote of 1.3380 USD, its highest level since June 2018.

However, he pulled out of these levels to keep himself at half a percent lower, as lawmakers prepared to vote again later in the day to postpone Brexit until at least the end of June .

But the risks for badysts have not been eliminated, as Parliament still needs to find a way forward and the 27 EU countries have to agree on an extension of Brexit. .

"There is progressive optimism and unless something very improbable, the possibility of a real non-agreement is not zero but less than 5%," said Tim Graf, head of the macro strategy to State Street (NYSE 🙂 Global Advisors.

But he added: "There is always a chance that the EU does not grant an extension if it just wants to try to get this deal through … it's there that caution between stake."

Elsewhere, the Australian dollar lost 0.35%, hurt by poor economic data from China, Australia's largest trading partner. The yuan also fell 0.3%

Oil prices rose 68 percent to $ 68.05, rising 0.8 percent a day, thanks to OPEC supply cuts, US sanctions on Venezuela and Iran, and a drop in oil prices. unexpected stocks and oil production.