European shares rise on Brexit deal

Confirmation of a new Brexit deal lit a fire under Europe’s financial markets on Thursday, sending sterling to a five-month high, European stocks to a yearand-a-half peak and causing safehaven assets to plummet.

It wasn’t a completely clear Brexit road ahead. Familiar Irish border snags remained a spoiler for Northern Ireland’s Democratic Unionist Party, but after three years of tortuous uncertainty any deal was a deal to cheer.

Sterling, which has been the key gauge of Brexit sentiment all along, jumped more than a percent against the dollar, taking its gains over the last six days to 6% and which if it holds, will be a more than 30-year record. It ran as far as $1.2988 to the highest against the euro since May at 0.86 pence. The euro also jumped to a near- two-month high against the dollar of $1.1139 in its sixth day of gains in the past seven.

London’s heavyweight FTSE and the pan-European STOXX 600 both jumped 0.6%, having been flat beforehand. UK Gilts, German Bunds, the Swiss franc, gold and most other safe havens began selling off.

Wall Street was expected to reopen higher and emerging-market stocks gained for a sixth day — their longest winning streak since early April — after U.S. Treasury Secretary Steven Mnuchin said U.S. and Chinese trade negotiators were nailing down a Phase 1 trade deal text for their presidents to sign next month.

U.S. retail sales fell for the first time in seven months, suggesting manufacturing-led weakness was spreading to the broader economy. U.S. consumption has been one of few bright spots in the global economy, so the data fanned worries the trade war would ultimately tip the world into recession.

In commodities, oil prices slipped after industry data showed a larger-than-expected build-up in U.S. crude stockpiles, adding to concerns that global demand for oil may weaken amid further signs of an economic slowdown.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.