Europe
European stock markets are in positive territory heading into the close as the global mood has mellowed a little. Last night, U.K. MPs voted in favour of preventing a no-deal Brexit in the near-term, and the situation in Hong Kong seems to have improved too. U.K. politics will remain in the news as the Brexit date could be pushed back again, or we might be in for a general election in a few months, but the fear of no-deal Bexit has cooled, for now at least. Carrie Lam, the chief executive of Hong Kong, called for the withdrawal of the controversial extradition bill, and that prompted a surge in the Hang Seng, and the feel-good factor spilled over to Europe, as there is a sense things will improve in the region.
U.S.
Wall Street is benefiting from the broad uptick global market sentiment. The remarks from Hong Kong’s Lam should in a roundabout way assist help the U.S.-China trade talks, as previously, President Donald Trump called on Beijing to behave in a ‘humane’ fashion in relation to the situation.
Starbucks (NASDAQ:SBUX) shares trade lower after the group trimmed its guidance. The group predicts the full year 2020 EPS will fall below the target of 10% growth. The group projects that full-year EPS for 2019 will be between $2.80 and $2.82, and traders were expecting $2.82. Despite today’s small drift lower, the stock is still up 47% year-to-date, and it remains in its bullish trend.
Tyson Foods Inc (NYSE:TSN) lowered its full-year guidance, and the group cited a fire at a major factory, as well as volatility in the commodity prices after the lowering of the guidance. The group now foresees full-year EPS of between $5.30 and $5.70, while equity analysts were anticipating $5.94. The stocks is down 4%.
FX
USD/CAD sold-off sharply after the Bank of Canada kept interest rates on hold at 1.75%, and the central bank didn’t use overly dovish language in its statement, which lifted the Canadian dollar. The BoC predicts that core inflation will hang around the 2% mark, and it commented on the strength of the housing market. U.S. growth is ‘solid,’ according to the Canadian central bank, and that added to the view they won’t be cutting rates anytime soon.
GBP/USD rallied today despite the political upheaval in the U.K. MPs who oppose a no-deal Brexit will try and push Prime Minister Boris Johnson to request a three-month extension, but at the same time, Johnson might be lining up a general election for later this year. Sterling’s rebound from yesterday continues, and dealers will be paying close attention to the voting in the commons tonight.
Commodities
Gold is largely unchanged today. The metal is being pulled and dragged in either direction as the benefits of the soft U.S. dollar are being offset by the risk-on strategy. The drop in the greenback would usually help gold, but the jump in stocks has drawn money away from the metal.
Oil has rebounded from the decline yesterday and the broadly optimistic mood in the market has helped oil. The largely positive services data in China and Europe helped, and so did the news from Hong Kong as they fed into a more hopeful view, and that prompted traders to buy back onto the oil market.