March 12, 2019
Asian stocks rise as Pound rises as Theresa May faces new vote on Brexit
Asian stocks rose on Tuesday, March 12, after good news. U.S. markets are recovering and the pound rose when Theresa May managed to secure last-minute support from the European Union for her agreement on the Brexit.
In Japan, the Nikkei 225 was up more than 2 percent and most sectors recorded strong gains. South Korea's Kospi also ended up. In Australia, the ASX 200 rose slightly with oil companies showing strength.
U.S. stocks have recovered, thanks to the strong gains of technology companies, after five days of losses. U.S. retail sales figures outperformed expectations and boosted investor confidence.
Boeing dropped nearly 9 percent after the weekend accident of an Ethiopian Airlines 737 Max 8, in which 157 people died. The airline immobilized the rest of its 737 Max 8 fleet and the Chinese government took similar action after the accident.
China, Indonesia and Ethiopia grounded their Boeing 737 MAX-8 fleets on Monday, while investigators found the black box of the stricken aircraft. It is the second disaster, involving that model plane, in six months. India's General Directorate of Civil Aviation also said it is reviewing safety issues related to Boeing's 737 MAX-8 aircraft operating in the country.
The lower house of the UK Parliament will have a series of votes this week. If Tuesday's vote rejects May's proposal, on Wednesday legislators will be asked whether Britain should renounce Brexit or seek new alternatives to the process.
The dollar fell against its major pairs, making gold an attractive investment for non-US currency holders. Meanwhile, the pound rose sharply following Theresa May's agreement with the EU.
Oil prices rose during Tuesday's Asian session. They were driven by comments by Saudi Energy Minister Khalid al-Falih that supply cuts are unlikely to end before June.
Gold rose during Tuesday's Asian session as the dollar weakened after the European Commission accepted the UK's proposed amendments to the Brexit agreement. The rise was limited by the decrease in investors' risk aversion after the deal.
European markets are expected to open Tuesday's session higher.
Apple compensates for Boeing's downfall
Dow up 100 points and clears previous losses as Apple compensates for Boeing's downfall.
U.S. indices rose on Monday, March 11, as strong gains in technology stocks such as Apple and Facebook offset Boeing's sharp decline.
Boeing fell 6 percent after Sunday's plane crash involving the 737 MAX 8 jet. This is the second accident in less than six months involving that model.
However, Apple shares rose 3.1 percent after Bank of America Merrill Lynch improved the Company's target price.
Facebook also gained 2 percent, after Nomura Instinet also upgraded its purchase position to neutral.
Monday's moves come after the major indices posted their worst weekly results of all of 2019 last week.
The most recent economic data fits the outlook for 2019. They suggest that economic growth is likely to slow this year, but the recession outlook remains very low. Consequently, the current weakness in equity markets must be considered within the limits of a consolidation phase.
Europe recovers before the crucial vote on Brexit
European shares rose on Monday 11 March. Traders are eagerly awaiting the crucial UK vote, which will determine whether to approve the Brexit deal.
It is a crucial week for the pound sterling, with Brexit in the investor's spotlight. UK Prime Minister Theresa May faces a series of crucial votes this week that will determine the course of the UK's exit from the EU. On Tuesday, UK lawmakers will vote on whether or not to accept their agreement.
The Stoxx 600 pan-European index provisionally closed on the upside, with almost all sectors on the upside. Banks were the centre of attention, with the sector trading 1.5 per cent higher.
Norwegian Air Shuttle shares fell by around 6.4 per cent, after the company had lower than expected passenger revenues. They said it would continue to operate Boeing 737 Max 8 jets, despite concerns about the safety of this model.
An Ethiopian Airlines accident, with the same model, killed all 157 people on board on Sunday. This led some airlines and the Chinese and Indonesian authorities to immobilize the planes. The shares of the French aerospace company Safran also fell after the accident.
High volatility in the markets
Attention Libra this week at all crosses. Potentially volatile dates approaching.
Attention Wednesday, where we will see the effect of Tuesday night's vote in the British Parliament.
If MEPs do not accept the proposals, a new referendum or new alternatives to exit from Europe are not ruled out.
OECD warns of more signs of economic slowdown
The OECD continues to see signs of slowing economic activity in most of its member countries.
Advanced composite indicators, which point to anticipated downturns in the economic cycle, fell significantly in Germany and Italy in January.
France, on the other hand, has moved away from the trend and shows that its growth rate is stabilising. In a similar situation appears Spain, whose indicator in January remains after having been decreasing for more than a year.
The signs of slowdown continue to repeat in other large countries of the organization like United States, Canada and United Kingdom.
In Japan, which had been on the sidelines of that general trend, the OECD also now anticipates a slowdown. It reflects the expected fall in sales, in the stock market and in hours worked in the manufacturing sector.
Outside the 'Club of Developed Countries', China showed signs of stabilizing growth, with a very slight drop in its indicator.
The OECD noted that the signs of a positive turnaround in Brazil's growth, which had the highest figure of all, are confirmed.
China and the United States agree not to use currency devaluation for competitive purposes
The governor of the People's Bank of China, Yi Gang, assured that Beijing and Washington have agreed to oppose the devaluation of the currency for competitive purposes. It will be the market that plays a decisive role in determining exchange rates.
Yi Gang said both sides have reached agreement on many key and important issues without providing more details.
On negotiations to find a way out of the trade war, China's deputy trade minister, Wang Shouwen, also said they are making substantial progress and he was optimistic about a possible pact to end the mutual imposition of tariffs.
The People's Bank of China will also continue to implement a prudent policy to guide reasonable credit and financing growth in 2019. The Bank will include a greater support for small businesses.
Ryanair shields against Brexit
The Board of Directors of the Irish airline approved a battery of measures to be applied in the event that the rupture of the United Kingdom and the European Union is made without agreement.
The Company marks non-EU shares as 'restricted'. Aware of the need to take measures to comply with European regulations, Ryanair advanced weeks ago its intention to block the entry of non-European shareholders.
According to European regulations, at least 51% of the company's capital must remain in the hands of European citizens to ensure control and ownership of the airline.
In the case of a 'hard Brexit', the British will not be able to buy ordinary shares of the company. In addition, it suspends the voting rights associated with those 'restricted shares', as long as the shares are in that situation.
[image] The exchange rate is always given for a currency pair. A currency by itself is worthless if it is not compared to another currency or other reference, such as gold. Therefore, whether in a flexible exchange rate or fixed exchange rate...
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