Market Update

This week, global politics and central bank announcements have taken center stage, with notable developments affecting various markets.
Following UK Prime Minister Theresa May's second Brexit deal rejection, the Speaker of the House of Commons, John Bercow, ruled out another vote on the deal if it remained "substantially the same." Consequently, May requested a three-month extension to the UK's planned exit from the EU. EU leaders set two deadlines: extending Article 50 until May 22nd if the deal is approved next week, or until April 12th if not, allowing the UK to decide on a no-deal exit or a significantly prolonged extension. Despite these uncertainties, valuations in both UK and European markets remain attractive. The Bank of England (BoE) kept interest rates at 0.75% due to Brexit uncertainties, adopting an accommodative stance, reinforcing market stability.
In the US, the Federal Reserve announced unchanged interest rates at 2.5%, and Jerome Powell, Head of the Fed, ruled out rate hikes this year, suggesting the possibility of a rate cut based on global data and trade uncertainties. This news provided a boost to global markets, with central bank support dictating market sentiment amid concerns about global growth.
Regarding trade negotiations, President Trump indicated a potential extension of the deadline for a trade agreement with China. Despite ongoing tariff discussions, both parties' willingness to delay deadlines signals their commitment to reaching a deal, which would positively impact global markets and trade.
Meanwhile, Chinese President Xi Jinping embarked on a European tour, starting with a visit to Italy to strengthen China-Europe ties, particularly regarding Italy's involvement in the "one belt one road" initiative, China's trade and infrastructure project.
In terms of economic data, the UK's weekly earnings exceeded expectations at 3.4%, accompanied by a 3.9% three-month unemployment rate. UK inflation data (CPI) for February stood at 1.9% year on year. Additionally, US jobless claims surpassed expectations, while Japanese inflation missed estimates, coming in at 0.2%. These diverse data points have contributed to the evolving market landscape.