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Stocks mixed amid weak China data; pound retreats ahead of vote on Brexit delay


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Stocks mixed amid weak China data; pound retreats ahead of vote on Brexit delay

➤ U.K. Parliament takes no-deal Brexit vote off the table.

➤ U.S.-China trade deal said unlikely to be signed in March.

➤ Wall Street set for lower open; global stocks mixed.

➤ Brent crude oil rises ahead of OPEC report.

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U.S. stocks looked set to open lower as Asian and European stocks diverged amid renewed growth concerns from China, while sterling retreated ahead of a U.K. parliamentary vote on a possible Brexit delay.

British lawmakers yesterday rejected allowing Britain to crash out of the European Union without a deal, setting the stage for another vote later that could extend the March 29 exit date. But with no agreement in place, a no-deal scenario remains the default path even if lawmakers vote for a delay.

Prime Minister Theresa May reportedly plans to put her divorce deal up for a third meaningful vote next week and seek a "short limited technical extension" to the Brexit date if the deal finally gets through Parliament. If the divorce pact again fails to pass, May would be forced to seek a "longer extension," which would require the U.K. to participate in the European Parliament elections two months from now.

Any extension needs to be approved by the EU, and U.K. Chancellor Philip Hammond said the bloc might push for a "significantly longer period" in the absence of a deal. European Council President Donald Tusk later said he would ask EU leaders to be "open to a long extension if the U.K. finds it necessary to rethink its Brexit strategy."

Sterling lost 0.91% against the dollar to below $1.322 at 6:30 a.m. ET, while the euro rose 0.65% against the pound.

The dollar strengthened against major counterparts, with the index tracking its performance against a basket of peers rising 0.31% to 96.77. The euro slipped 0.15% against the greenback, which rose 0.39% against the yen to ¥111.60.

In equities, U.S. futures erased earlier gains to point to losses at the open following a Bloomberg News report that U.S. President Donald Trump and Chinese counterpart Xi Jinping are now unlikely to meet in March to sign a trade agreement. Earlier, Trump said he was "in no rush" to sign an accord with Beijing.

MSCI's index of Asia-Pacific stocks excluding Japan declined 0.15%, while the Nikkei 225 closed nearly flat as annual industrial production growth in China in the first two months of 2019 slowed more than expected to a 17-year low. The Shanghai SE Composite index fell 1.20%, while Hong Kong's Hang Seng eked out a 0.15% gain.

European equities largely saw muted gains, with the Stoxx 600 index rising 0.50%. The FTSE 100 added 0.50%, while Germany's DAX slipped 0.03%, with shares in Deutsche Lufthansa AG tumbling nearly 5% after the airline reported fourth-quarter 2018 earnings.

Brent crude oil rose 0.10% to $67.62 per barrel on the ICE Futures Exchange ahead of OPEC's monthly market report. Yields on 10-year Treasurys added 1 basis point to 2.63%, while gold fell 0.82% to $1,298.60 per ounce.

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The day ahead:

8:30 a.m. ET — U.S. jobless claims (Econoday consensus: 225,000)

8:30 a.m. ET — U.S. import and export prices (Econoday consensus: 0.4% month over month import, 0.2% month over month export)

8:30 a.m. ET — Canada new housing price index

10 a.m. ET — U.S. new home sales (Econoday consensus: 612,000)

10:30 a.m. ET — EIA natural gas report

1 p.m. ET — U.K. House of Commons expected to vote on Brexit delay

4:30 p.m. ET — U.S. Fed balance sheet

4:30 p.m. ET — U.S. money supply

9:30 p.m. ET — China house price index

11 p.m. ET — Bank of Japan monetary policy decision