UK Prime Minister May’s Brexit plan suffered a resounding defeat in a House of Commons vote overnight. It appears currency traders and investors were well prepared, as the result saw the Pound erase session losses and UK 100 index futures move modestly higher. Global markets were equally unruffled, pushing risk assets higher after China promises of tax cuts and government spending to support the economy.
The Euro came under pressure, although traders indicated comments from ECB President Draghi about slower European growth had more influence than the Brexit vote. The US dollar also rose against the Yen as investors shifted away from safety. The strongest gains came in the Yuan as it hovered at six month highs against the dollar.
JP Morgan, Wells Fargo and Delta Airlines reported overnight. Investors punished Wells Fargo’s miss, but JP Morgan shareholders were more forgiving. Higher growth stocks featured, and the tech and healthcare sectors led gains on both European and US markets.
Asia Pacific markets rose yesterday on the news, and futures markets are pointing to a mixed start for the region. The lift in aluminium, tin and nickel combined with a 3% jump in oil prices could mean a more positive session than currently indicated.