Brexit Rally Eases as Traders Weigh Deal's Chances: Markets Wrap




 

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U.S. equity futures advanced with European stocks on Thursday and the pound strengthened as a new Brexit deal was announced, though moves eased as investors assessed its chances of winning crucial support. Treasuries led a government bond retreat.

The mood of investors had been cautious earlier in both Asia and Europe, but risk appetite returned as the U.K. and European Union said they agreed on a new withdrawal plan. Initial optimism was tempered however, as the accord must be approved by EU leaders and British MPs. A key Northern Irish party said it won't vote for the deal.

The Stoxx Europe 600 Index climbed as every major national benchmark in the region turned higher, while contracts for the three main U.S. equity gauges followed the advance. Gold slipped alongside bonds as haven demand ebbed. A gauge of the dollar also dropped.

While doubts remain, the breakthrough was enough to tip investors off the fence after a mixed bag earnings from major European companies. Unilever said growth fell short of estimates while Nestle announced a buyback. Ericsson boosted its sales target for next year. Netflix gained in early trading thanks to upbeat results on Wednesday.

Earlier in Asia, stocks fell in Tokyo, Sydney and Seoul, rose in Hong Kong and were barely changed in Shanghai. Taiwan Semiconductor, the primary chip supplier to Apple, projected current-quarter revenue ahead of analysts' estimates. The Australian dollar strengthened after the country's jobless rate unexpectedly fell and full-time employment climbed.

Here are some key events coming up this week:

China releases third-quarter GDP, September industrial production and retail sales data on Friday.

Here are the main movers in markets:

Stocks

Futures on the S&P 500 Index gained 0.3% as of 7:02 a.m. New York time.The Stoxx Europe 600 Index rose 0.5%.The U.K.'s FTSE 100 Index jumped 0.6%.The MSCI Asia Pacific Index increased 0.2%.The MSCI Emerging Market Index climbed 0.6%.

Currencies

The Bloomberg Dollar Spot Index declined 0.3%.The euro gained 0.4% to $1.1118.The British pound rose 0.3% to $1.2875.The Japanese yen was little changed at 108.78 per dollar.

Bonds

The yield on 10-year Treasuries rose three basis points to 1.77%.Germany's 10-year yield increased two basis points to -0.37%.Britain's 10-year yield gained two basis points to 0.732%.

Commodities

Gold dipped 0.2% to $1,487.36 an ounce.West Texas Intermediate crude declined 0.7% to $52.99 a barrel.

--With assistance from Sybilla Gross and Adam Haigh.

To contact the reporter on this story: Samuel Potter in London at spotter33@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Todd White

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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