U.S. markets gain after price data; pound weakens

Cornelia Mascio
Marzo 14, 2019

Oil prices rose more than 1 percent, supported by an unexpected drop in US crude inventory along with a forecast of slower-than-expected supply from the world's top crude producer. Elsewhere, Australia's dollar slid with bond yields after weak consumer confidence data reinforced a deteriorating outlook for the economy.

The euro was a shade lower at $1.1320 after advancing 0.3 percent overnight. The non-binding vote will increase pressure on Prime Minister Theresa May to rule out a "no-deal" exit, and paves the way for a vote to delay Brexit.

The U.K. House of Commons votes Tuesday on May's revised Brexit deal, just weeks before Britain is scheduled to leave the EU.

British lawmakers are widely expected to vote on Thursday to delay Britain's departure from the European Union, now scheduled for March 29. The pound slumped and United Kingdom bonds pared a drop after the chances lawmakers approving a Brexit deal lessened. Treasuries pared a drop and the dollar gained. Immediate resistance can be seen at 1.3373 (38.2% retracement level), an upside break can trigger rise towards 1.3472 (23.6% retracement level).On the downside, immediate support is seen at 1.3294 (50% retracement level), a break below could take the pair towards 1.3214 (61.8% retracement level).

The MSCI Emerging Market Index declined 0.1 percent.

USA producer prices edged barely higher in February, in the smallest annual increase since June 2017, the latest sign of tame inflation that supports the Federal Reserve's "patient" approach to future interest rate hikes.

U.S. crude stocks fell last week as refineries hiked output, the U.S. Energy Information Administration said.

World equity markets advanced broadly on Wednesday after USA data again showed risk-friendly low inflation, which weakened the dollar, while Boeing shares gained even as the United States said it would ground the company's 737 MAX aircraft.

Alongside Brexit developments, investors have a slew of economic data to digest this week.

The British pound decreased 0.8 percent to $1.3226, the biggest dip in nearly eight weeks. Tepid inflation and disappointing producer price data this week support the Fed's stance of keeping interest rates on hold, denting the dollar.

The greenback had taken a knock as the pound jumped more than 2 percent after British lawmakers voted against a potentially disorderly "no-deal" departure from the European Union.

Sterling was up 0.2 percent at $1.3089 and stuck to a narrow range.

USA stocks rose on Wednesday, led by gains in healthcare shares, and Boeing shares edged upward even as the United States grounded the company's 737 MAX jets after a fatal crash in Ethiopia.

On Wall Street, the Dow Jones Industrial Average rose 148.23 points, or 0.58 percent, to 25,702.89.

In late NY trading, the euro was up to 1.1329 US dollars from 1.1296 dollars in the previous session, and the British pound rose to 1.3217 dollars from 1.3084 dollars in the previous session.

Benchmark 10-year U.S. Treasury notes fell 2/32 in price to push yields up to 2.6141 percent.

US 30-year bond yields were up at 3.011 percent from 2.99 percent on Tuesday.But yields on both 10-year notes and 30-year bonds have fallen in six of the last eight sessions.

The pound gained before the next major Brexit vote. Crude oil climbed after Saudi Arabia was said to extend deep supply cuts.

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