U.K. Pound Posts Gains on Brexit Optimism
October 15 2019 - 4:33AM
Dow Jones News
By Anna Isaac
The British pound ticked higher as investors speculated that the
U.K. may reach a deal with the European Union this week.
The currency advanced 0.5% against the U.S. dollar early
Tuesday, while the equity benchmark FTSE 100 index remained mostly
flat.
The EU's chief Brexit negotiator, Michel Barnier, told reporters
early on Tuesday that reaching a deal with the U.K. was still
possible following intense talks between the two side. Officials on
both sides say gaps between the U.K. and EU have narrowed, but
obstacles remain before a deal can be completed.
Meanwhile, U.S. stock futures and equities across Europe posted
gains as investors continued to try to assess the probability of
the U.S. and China ending the trade war after both sides said last
week that they'd made progress toward a partial deal. The Stoxx
Europe 600 gauge rose 0.4%, while futures tied to the Dow Jones
Industrial Average also gained 0.4%.
"Markets are fairly muted because this should actually be viewed
as a cease fire rather than a deal," said Edward Park, deputy chief
investment officer at Brooks Macdonald Asset Management. The only
major progress was that the U.S. shelved additional tariffs that
had been scheduled to go into place this week, he said.
Over in Asia, Chinese stocks fell as fresh economic data added
to concerns about weaker growth prospects and the government's
ability to strike a trade agreement with the U.S.
The Shanghai Composite gauge dropped 0.6% as official data
showed inflation reached a six-year high last month, driven by
rising pork prices. This comes amid signs of slowing growth and
trade tensions for the world's second-largest economy.
Shares in fintech firm Wirecard fell about 18% in Germany
following a report in the Financial Times about its accounting
practices. Internal documents from the payments company point to a
concerted effort to fraudulently inflate sales and profits, the
newspaper said. Representatives for Wirecard declined to
immediately comment.
The Turkish Lira climbed 0.2% against the dollar, reflecting
investors' relief that President Trump had opted to impose
"relatively mild" sanctions on the country, analysts at Rabobank's
research unit said in a note to clients.
Later in the day, investors will be watching closely as a host
of major financial firms, including BlackRock, the world's largest
asset manager, and banks such as JPMorgan Chase, Goldman Sachs
Group and Citigroup will report earnings.
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
October 15, 2019 05:18 ET (09:18 GMT)
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