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Trade Hope Lifts Stocks, Brexit Drama Rages On, Good Data Down Under

Trade Hope Lifts Stocks In The U.S.

Trade hopes lift U.S. equities in early trading. The latest news is that the two sides are getting closer to a deal. Trade Representatives Mnuchin and Lighthizer are meeting with Chinese Vice Premier Lui He later today. Many on Wall Street expect a deal will be reached very soon but not all issues will be resolved. This will set up stage two for trade talks, a Trade War II, likely to focus on intellectual property among other core issues.

In political news, the race for the 2020 Presidental is already heating up. Senator Elizabeth Warren, a Democratic hopeful, introduced a bill this morning that would make it easier to jail execs for the wrongdoing of their companies. The move is not likely to pass but shows the constituency where she stands on regulation. Trump says he will close the Mexican border is illegal immigration isn’t curtailed.

On the economic front, the ADP employment figures were weaker than expected. The 129,000 reported is about 60,000 shy of estimates and underscores slowing in the economy. Later this morning, traders will be looking for the Markit and ISM reports on services PMI and within it the labor component. Later this week the NFP will be released, the consensus estimate for it is 180,000.

Brexit Drama Weighs On UK Equities

European markets were mostly higher on Wednesday at midday. The German DAX was in the lead with a gain near 1.30% with the French CAC and UK FTSE both trailing. The CAC was about a modest 0.60% while the FTSE, weighed down by Brexit drama, was up only 0.15%.

With Parliament deadlocked Prime Minister Theresa May is working hard to bridge gaps. On one front she is asking the EU for another extension to the deadline, on another, she is meeting with opposition leaders to discuss the future relationship with the EU. If no extension is given, no consensus reached, the UK will hard-Brexit at the end of next week.

In stock news shares of supermarket retailer, Casino Guichard fell hard in early trading. The company, a major issuer of bonds, was downgraded by Moody’s.

Asian Up On Data, Australia In Focus

Asian equities markets were broadly higher on Wednesday. The Shanghai Composite led with an advance of 1.24% and was followed closely by the Hang Seng, Kospi, and Nikkei. The Australian ASX was the day’s laggard at 0.68% but today’s data suggests bigger moves are coming. Australian economic data shows retail sales hit a 15-month high while the countries trade surplus unexpectedly grew and also hit a new high. The data underscores the RBA decision and outlook delivered yesterday which both point to steady and expanding growth.

In stock news, shares of SK Hynix, Korean chipmaker, rose to the top of the rankings. The volatile stock gained more than 4.5% on hopes U.S./China trade relations were on the mend.

This article was originally posted on FX Empire

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