- US markets finished strong on Monday, Asian markets to follow
- Crude oil and energy stocks are up
- UK to vote on revised Brexit deal Tuesday
US stocks plummeted Friday after a projected 180,000 forecasted jobs for February failed to materialize, pulling Asian stocks down with it as fears renewed of stalled growth globally. However, expectations of a rate cut from the Fed, as well as the EU relenting on key points during Brexit negotiations gave a much needed morale boost for traders, and Asian stocks are set to rise significantly when they open today.
Asian Futures point to green
The ASX200 soared by 26 points today, for a 0.6% increase. The Nikkei 400 is up 200 points. Futures also point to other Asian markets following suit. Confidence in US markets and hopes for a Brexit deal are significant factors, but others abound as well. The Bank of Japan will set monetary policy this week, decision to be announced Friday, and expectations are for policy to stimulate investments. Should the governor announce no change or unfavourable policies, the week’s optimism will likely evaporate, and we could see deeper slumps.
Saudi cuts to oil extraction continue into the second month, leading to a rise in the price of crude oil, as well as a boost in energy stocks. Gold has retreated after an initial small surge in the wake of the weak US job growth.
Aerospace shares tumble
After the sad accident in Ethiopia on Sunday US aerospace stocks have retreated significantly, with Boeing itself having flash crashed some 10% before recovering to a 5% decline. Other planes of the 737 Max jet model were grounded in many countries around the world Monday while engineers tried to find out if the accident was the result of equipment failure that might be affecting other planes of the same make. Boeing currently has orders for some 5000 more planes like it, and investors are of course feeling the heat.
Other aerospace stocks did retreat along with Boeing, if not as deeply.
EU relents on Brexit deal
The UK House of Commons is set to vote Tuesday on a revised deal brought by Theresa May. Under the latest iteration of the deal Northern Ireland would remain on the EU side of the coming border. A hard border between Northern Ireland and Ireland was one of the main sticking points for some of those who voted down the original deal, but only the Tuesday vote can tell for sure if it is enough of a concession on the part of the EU to pass the House of Commons.
Should the deal be rejected again, we are now 20 days away from a hard Brexit.