The pound extended its rally in Asian trade Tuesday after British Prime Minister Theresa May hammered out a revision to her controversial Brexit deal she hopes will be enough to push it through parliament.

The surge in sterling came as regional equity markets pushed higher following a positive lead from Wall Street, with tech firms tracking an upbeat outlook for Apple, energy firms rising with oil prices and dealers cheered by improving US retail sales.

With a key vote on her agreement due later in the day, May said she had secured "legally binding" guarantees with the EU over the main sticking point of the Irish border question.

The news reinforced hopes the country will have some sort of deal in place once it exits the bloc.

If her plan is still dismissed by MPs, there will be a vote Wednesday on whether to continue to leave without a deal -- considered economically catastrophic by many -- and if that fails to pass then another will take place on extending the March 29 exit deadline.

"From today for three days the market will be closely watching the UK lower house votes over Brexit," Mizuho Securities said in a note.

The main scenario is that the Tuesday vote will be denied, the Wednesday vote will approve avoiding a hard exit, and the Thursday vote will decide the extension until the end of June, it said.

"If the extension is pushed back to December 2019 or later, that would be favoured by the market with possibility of the second referendum that may deny Brexit," it said.

The pound has risen about 1.5 percent against the dollar since late Friday, while it is up around two percent on the euro.

- 'Fragile foundations' -

The broadly upbeat mood has also lifted higher-yielding currencies against the greenback as investors return to riskier assets.

On equity markets Tokyo's Nikkei closed 1.8 percent higher, while Shanghai was up 1.1 percent and Hong Kong put on 1.5 percent.

Singapore jumped 0.8 percent and Seoul and Taipei each added 0.9 percent, with Manila putting on 0.5 percent.

The gains follow last week's sharp sell-off that was fuelled by worries over the global economy, with the OECD lowering its 2019 forecasts, the European Central Bank sounding a negative note on the eurozone's outlook and Chinese trade taking a hammering.

However, OANDA senior market analyst Jeffrey Halley warned that things could still turn ugly.

"Investors are clearly in an optimistic mood despite nothing having changed materially around the world. Investors should be cautious, however, because the rally is built on fragile foundations. It would be wise to stay nimble in a headline-driven market," he said in a note.

Dealers are keeping tabs on developments in the China-US trade talks, with top officials holding phone talks Tuesday to discuss the next steps, though the White House said no date has been set for a summit at which a final deal can be signed.

Oil prices extended gains, lifting the region's energy sector, as Saudi Arabia extended output cuts, while Venezuela struggles under a blackout that has hampered production in the country.

"Saudi Arabia has led the charge with sharp reductions in output levels (in 2019) to drain excess global capacity from the second half of 2018," said Phillip Futures commodities analyst Benjamin Lu.

"Better-than-expected US economic releases along with Brexit assurances from the EU have too buoyed risk appetites for the current term."

In early trade London was flat, Paris rose 0.5 percent and Frankfurt was 0.6 percent higher.

- Key figures at 0820 GMT -

Pound/dollar: UP at $1.3235 from $1.3149 at 2100 GMT

Euro/pound: DOWN at 85.09 pence from 85.53 pence

Tokyo - Nikkei 225: UP 1.8 percent at 21,503.69 (close)

Hong Kong - Hang Seng: UP 1.5 percent at 28.920.87 (close)

Shanghai - Composite: UP 1.1 percent at 3,060.31 (close)

London - FTSE 100: FLAT at 7130.51

Euro/dollar: UP at $1.1264 from $1.1248

Dollar/yen: UP at 111.35 yen from 111.20 yen

Oil - West Texas Intermediate: UP 28 cents at $57.07

Oil - Brent Crude: UP 23 cents at $66.81 per barrel

New York - DOW: UP 0.8 percent at 25,650.88 (close)

dan/mtp

APPLE INC.

MIZUHO FINANCIAL GROUP

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

Trump won't sign China trade pact unless it's 'great'
Washington (AFP) March 8, 2019
Optimism about a rapid resolution of the months-long US-China trade war was undercut by conflicting comments out of Washington and Beijing, sending global stock markets on a downward slide on Friday. President Donald Trump said he remains optimistic but will not agree to a pact with China unless it is a "very good deal." And an economic advisor said Trump could walk away from the negotiations. The economic superpowers have been locked in a trade battle since last summer, striking out with steep ... read more