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Stocks edge higher on trade hopes; pound rises after Brexit delay


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Stocks edge higher on trade hopes; pound rises after Brexit delay

➤ U.K. lawmakers vote to extend Brexit to June 30.

➤ Wall Street on course for gains; global stocks rise.

➤ Oil rises ahead of OPEC meeting this weekend.

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U.S. stocks looked set to edge higher this morning, tracking gains from Asia to Europe, as investors assess signs of progress in trade talks between Beijing and Washington, while sterling seesawed between gains and losses after U.K. lawmakers voted to extend Brexit.

In a 412-202 vote, the U.K. House of Commons yesterday backed a government motion extending Britain's exit from the bloc to June 30 from March 29, as long as a Brexit deal could be passed by March 20. Lawmakers also turned down a proposal to trigger a second national referendum on leaving the EU.

Sterling traded 0.22% higher against the dollar at 6:30 a.m. ET, having flipped between gains and losses earlier in the day. The euro was broadly unchanged against the pound.

Despite the vote to delay Brexit, a no-deal departure remains the legal default path forward until a withdrawal agreement with the European Union is passed. Thus there remains "a significant amount of tail risk in being overly exposed to sterling," wrote CMC Markets UK chief market analyst Michael Hewson in a daily note.

The euro rose 0.17% against the dollar, while the Japanese yen traded nearly flat at about ¥111.7 against the greenback. The Bank of Japan kept its short-term policy rate target unchanged at negative 0.1% and pledged to continue purchasing sovereign bonds to keep 10-year yields at around zero percent in a widely expected move.

Meanwhile, yields on 10-year U.S. Treasurys were unchanged below 2.63% and Wall Street looked on course to open higher this morning, amid optimism that the U.S. and China will soon agree on a trade deal.

China and the U.S. have reportedly made "concrete progress" on the text of their potential trade pact, while President Donald Trump said the outcome of current negotiations will be known within three to four weeks. Separately, a newly passed foreign investment law in China also appeared to boost investor sentiment as the country seeks to open up its economy amid slowing growth.

Asian equities advanced, with the Shanghai SE Composite index rising 1.04%, Japan's Nikkei 225 up 0.77% and Hong Kong's Hang Seng gaining 0.56%.

European stocks tracked gains in Asia, with the FTSE 100 up 0.49%, Germany's DAX index advancing 0.36% and France's CAC 40 rising 0.54%. The wider Stoxx 600 index gained 0.27%.

Brent crude oil ticked up 0.01% to $67.24 per barrel on ICE Futures Exchange ahead of an OPEC meeting this weekend, when oil producers are set to review supply curbs. Gold rose 0.57% to $1,302.50 per ounce.

More from S&P Global Market Intelligence:

US energy storage increasingly tied to other generating resources

French investment banks hit hardest in year-end 2018 market turmoil

US coal exports rose 13.2% YOY in '18; Asia likely to drive 2019 seaborne demand

Agriculture loan delinquencies rise 3% YOY

Why US-China trade negotiations may fail

The day ahead:

8:30 a.m. ET — U.S. Empire State manufacturing survey (Econoday consensus: 10.0)

8:30 a.m. ET — Canada manufacturing sales (Econoday consensus: 0.5% month over month)

9:15 a.m. ET — U.S. industrial production (Econoday consensus: 0.4% month over month)

10:00 a.m. ET University of Michigan's U.S. consumer sentiment survey (Econoday consensus: 95.2)

10:00 a.m. ET U.S. JOLTS report (Econoday consensus: 7.2 million)

1:00 p.m. ET — U.S. Baker-Hughes rig count

4:00 p.m. ET — U.S. Treasury international capital flows