Another UK Vote, But No Closure

Overview: The Brexit drama continues to play out, and the Withdrawal Bill that has been twice defeated is ironically not dead yet. Today's vote, in fact, is predicated on another "meaningful vote" before seeking an extension. Sterling remains firm near yesterday's highs, which were the best levels since last June. Poor Chinese data was a drag on Asian equities, where the Shanghai Composite fell by more than 1% for the second consecutive session.  European shares are holding in better, with around a 0.25% gain through the morning, led by energy. The disruption of supply from Venezuela, talk OPEC+ may extend output cuts, and a large drawdown in the US inventories have lifted oil prices to new highs for the year (~$68 a barrel for Brent and about $58.5 a barrel of WTI, front-month futures). After falling every day last week, the S&P 500 is taking a three-day rally into today's session. Core benchmark 10-year yields are a little firmer, though the yield on 10-year Gilts jumped more than four basis points. Peripheral yields are a little softer. The dollar is firmer against all the major currencies near midday in Europe. The yen is experiencing its biggest loss in a couple of weeks (~-0.45%) ahead of what is expected to be a dovish hold by the BOJ tomorrow. The weak Chinese data weighed on the Antipodean currencies.    

Asia Pacific

The weakness of the Chinese economy, which has prompted a government campaign to reverse it, and the distortions caused by the Lunar New Year make it difficult to read too much into the latest data. Industrial output slows to 5.3% from 6.0% in January. Economists expected a 5.6% gain. Retail sales slowed to an 8.2% gain, the slowest since 2012. It was in line with expectations but contrasts with the 9.0% rise in January. Registered unemployment rose to a two-year high of 5.3% from 4.9%. Investment was the exception. It sequentially improved. Fixed asset investment rose to 6.1% from 5.9%, and property investment rose 11.6% after a 9.5% rise in January.

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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