Asian shares mixed in muted trading ahead of US Fed meeting
LONDON (AP) — Global stock markets recovered their poise Tuesday after a lackluster session in Asia as investors digested the latest bout of Brexit uncertainty and prepared for a key U.S. Federal Reserve meeting.
In Europe, France’s CAC 40 rose 0.5 percent to 5,440, while Germany’s DAX climbed 1 percent to 11,777. Britain’s FTSE 100 gained almost 0.7 percent to 7,347. U.S. shares were set for gains with Dow futures and the broader S&P 500 futures both up 0.4 percent.
Much of the focus in Europe remains on Britain as the country’s scheduled departure from the European Union looms. With just ten days to go until Brexit, the country has yet to agree on how it will leave and Prime Minister Theresa May is expected later this week to seek an extension to the departure date from March 29.
The latest Brexit bombshell occurred Monday when the speaker of the House of Commons ruled that May cannot keep asking lawmakers to vote on the same divorce deal that they have already rejected twice.
On Thursday, EU leaders will meet and discuss if they will grant an extension of the March 29 deadline for the U.K. to leave the bloc. The consensus in the markets is that they will but there may strings attached.
“Depending on your point of view, either the U.K. is locked in some kind of limbo tied to the EU, which is the ‘Remainers’ preferred scenario, or as an unintended consequence the U.K. leaves the EU without a deal quite soon, the Brexiteers preferred scenario, something which is not being priced in by financial markets at the moment,” said Neil MacKinnon, economist at VTB Capital.
Despite the Brexit uncertainty weighing on the British economy, the country continues to post sizeable declines in unemployment.
The Office for National Statistics said employment in Britain rose by 222,000 in the three months to January, compared to the previous quarter. That took the employment rate up to a record 76.1 percent and the country’s unemployment rate declined to 3.9 percent. That’s the first time it has fallen below 4 percent since early 1975.
In the U.S., investors are gearing up for the outcome of the Fed’s meeting on Wednesday, at which it is expected to slow its pace of interest rate increases. The worry in December was that the central bank would raise rates too fast, choking off growth as the global economy slowed. The Fed will meet to discuss interest-rate policy later week, with an announcement scheduled for Wednesday.
Economists expect the Fed to announce no change to rates, but it might release documents that would suggest one rate increase in 2019, or possibly zero, after the Fed raised rates four times in 2018 and three times in 2017.
In Asia, Japan’s benchmark Nikkei 225 lost nearly 0.1 percent to 21,566.85. Australia’s S&P/ASX 200 edged 0.1 percent lower to 6,184.80 and South Korea’s Kospi inched down less than 0.1 percent to 2,177.62. Hong Kong’s Hang Seng gained 0.2 percent to 29,466.28, while the Shanghai Composite dipped 0.2 percent to 3,090.98.
Shares rose in India. Taiwan’s benchmark was unchanged and those in Southeast Asia were mixed.
ENERGY: Benchmark U.S. crude oil gained 44 cents to $59.53 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gained 61 cents to $68.15 a barrel.
CURRENCIES: The dollar fell to 111.27 yen from 111.56 yen Monday. The euro strengthened to $1.1358 from $1.1338.
The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.
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