UK PM to chair cabinet meeting as Brexit deal agreed

Daniel Fowler
November 15, 2018

Asian stocks rose on Thursday, taking heart from a bounce in Chinese shares on news that China has delivered a written response to USA trade demands, while oil prices resumed their retreat on fears of oversupply.

Sterling, which surged on Tuesday after Britain and the European Union agreed a draft Brexit deal, was calm as traders prepared for Prime Minister Theresa May's showdown with colleagues when she will try to sell her Brexit agreement.

Elsewhere, Australian stocks .AXJO inched up 0.05 percent and Japan's Nikkei .N225 shed 0.2 percent.

Earlier, U.S. stocks had risen after White House Economic Adviser Larry Kudlow said Washington had resumed trade talks with China and characterized the development as "very positive".

"While the plunge in WTI will no doubt act as a relief for emerging markets and the global consumer, USA real rates continue to climb, underwriting the dollar's strength", wrote Sean Darby, chief global equity strategist at Jefferies.

"Uncertainty around Italy and Brexit are weighing on sentiment", noted CMC Markets analyst David Madden.

Signs of a softer-than-expected impact from United States sanctions on Iranian crude exports have also weighed on prices in recent weeks.

The British cabinet will meet for an emergency meeting at 1400 GMT today to consider the 500-page draft withdrawal agreement, a Downing Street spokesman confirmed after Irish and British media were leaked details of the agreement on the text.

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The pound was 0.2 percent higher at $1.3010 GBP=D4 .

Mrs May is trying to rally support among cabinet ministers for her Brexit proposal in time for a hoped-for summit in Brussels later this month.

The single currency has been under pressure down by uncertainty on how European Union officials would react to Italy's latest fiscal proposal after they rejected a version of it last month for violation of certain European Union rules. The single currency was up 0.2 per cent at US$1.1310, pulling back from a 17-month trough of US$1.1216 brushed on Monday. The European Commission rejected Italy's plan a month ago and has threatened to force punishments if it is not revised to conform to EU regulations - something Rome has shown it is reluctant to do.

The dollar index, a gauge of the currency's performance against six major peers, traded at 96.97, off a 16-month hit on Monday. The greenback retreated further from a 16-month peak against a basket of currencies.

OPEC warned on Tuesday that a supply glut could emerge in 2019 as the world economy slows and rivals increase production more quickly than expected.

Oil prices slumped meanwhile after US President Donald Trump urged producing nations not to cut output.

Led by top exporter Saudi Arabia, OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices.

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