Markets Brace for Brexit Vote
Global investors were trading cautiously in advance of the Brexit vote on Tuesday, as traders seemed to focus more on the vote than earnings reports, which usually take center stage. The British parliament is largely expected to vote down Prime Minister Theresa May’s Brexit plan, and even if the expected defeat occurs, the markets may react with increased volatility, especially if the margin of loss is wider than expected.
If the vote fails, U.S. May will have three days to provide an alternative way for the Brexit to proceed. The Prime Minister may also face a no-confidence vote, which would put the Brexit process in the hands of parliament, and could further complicate the process. If the vote is close, analysts expect global markets to remain fairly stable; if the defeat is crushing, there may bigger moves are expected.
The pound was up 0.36 percent against the U.S. dollar as of 1:46 p.m. HK/SIN, to trade at $1.2909. The dollar was also trading lower against the euro, at $1.1477, though it did rise 0.46 percent against the yen, to trade at 108.68.
Oil, Asian Markets Head Higher
Oil prices were higher on Tuesday, despite fears that the extensive U.S. government shutdown might impact the country’s agricultural industry. U.S. WTI futures were up 1.45 percent, to $51.24 per barrel, while Brent crude futures wer up 1.41 percent to $59.82 per barrel.
Asian stock markets were also higher trading predominantly higher, with all major Asian indexes in the green in the mid-afternoon on Tuesday. Japan’s Nikkei 225 was up 0.87 percent, Hong Kong’s Hang Seng Index was up 1.47 percent, and South Korea’s Kospi was up 1.32 percent. Both of China’s benchmark indexes were also higher, with the Shanghai Composite up 0.78 percent and the Shenzhen Composite up 1.22 percent.