Pound jumps, Asian shares rise after changes to Brexit deal

SHANGHAI (Reuters) – The pound jumped and Asian shares rallied on Tuesday after the European Commission agreed to changes in a Brexit deal ahead of a vote in the British parliament on a divorce agreement.

FILE PHOTO: Pedestrians walk past electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon

European Commission head Jean-Claude Juncker agreed to additional assurances in an updated Brexit deal with British Prime Minister Theresa May on Monday, but warned UK lawmakers would not get a third chance to endorse it.

Sterling, which had risen ahead of the talks between May and Juncker, extended gains in hopes the changes may be enough to sway rebellious British lawmakers who have threatened to vote down May’s plan again on Tuesday.

The pound was up 0.5 percent, buying $1.3215 and taking its gains over two days to more than 1.5 percent.

A lower likelihood of crashing out of the EU with no Brexit deal could help to inject some bullish sentiment into equity markets by eliminating one of the three major concerns of global investors, alongside trade and slowing global growth, said Greg McKenna, strategist at McKenna Macro.

“Take Brexit off the table and I think some of the real money flows that appear to have turned up late last week are likely to be there again. So I think it helps change the backdrop a little bit,” he said.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1.08 percent, with early gains reinforced by a rise in Chinese shares and oil companies, which were buoyed by higher oil prices.

Chinese blue chips .CSI300 rose 1.3 percent, extending the previous day’s 2 percent gain.

Despite slowing domestic economic growth and uncertainty about the outlook for trade negotiations between China

Read More Here...

Bookmark the permalink.