Market Update

The week has passed in a subtle manner, despite the feeling of significant events in the air; in reality, not much substantial has occurred.
Media coverage ramped up ahead of Tuesday's House of Commons vote on Theresa May's Brexit plan. Despite extended negotiations between the UK and the EU in Brussels this week, many issues remain unresolved. With the UK rejecting the EU's latest offer, it appears likely that the Commons will reject the deal next Tuesday. Both the UK and the EU seem inclined to extend the March Brexit deadline, providing short-term relief for markets and the pound. Bank of England Governor Mark Carney's earlier comments, suggesting a reduced likelihood of a 'no-deal Brexit,' supported this outlook.
In other developments, US trade representatives reiterated Donald Trump's intent to terminate the GSP (General System of Preference) agreement with Turkey and India, initially causing a pullback in Indian markets. However, India downplayed the move, stating the agreement provided minimal benefits. Subsequently, Indian markets rallied, aiming to offset losses incurred earlier in the year. Despite recent border tensions with Pakistan, the willingness of both parties to engage in peaceful dialogue has been a positive factor for India's political stability before the upcoming elections.
China's annual People's Congress opened in Beijing, where long-term plans were discussed. Despite lowering the growth target to 6-6.5%, Chinese Premier Li Keqiang emphasized the country's substantial growth, driven by a growing middle class and innovation. Trade data was weak due to postponed negotiations with the US, in anticipation of talks resuming on March 29.
On Thursday, the European Central Bank (ECB) maintained monetary policies, introducing the TLTRO III program to provide cheap loans to banks, aiming to boost the economy. ECB head Mario Draghi expressed concerns about growth due to trade uncertainties but emphasized the ECB's measures would enhance market resilience. Positive economic indicators, such as 1.1% GDP growth and strong producer prices, indicated Europe's economic health.
Throughout the week, notable data included Japan's GDP beating expectations for Q4 2018, and China's reserves remaining above $3 trillion. The US Jobs Report released on Friday revealed a significant drop in unemployment to 3.8%, maintaining consistent participation levels. Additionally, Sotheby's auctioned their first AI-generated artwork, a portrait generated by an algorithm based on historic portraits. Despite some disappointment from the seller, the artwork fetched its lower estimate of £32,000, a fair price in the eyes of some observers.