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Brexit to be postponed until May, if MPs approve a deal next week- EMEA Brief 22 Mar

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  • EU agrees to postpone Brexit until 22 May if MPs approve a deal next week, otherwise the UK will leave by 12 April, a much shorter deadline
  • Levi Strauss shares rocket, with initial public offering above expectations at $17, and closing at $22.5
  • China to potentially miss out on $5.5trillion growth opportunity in digital trade if they do not build effort on data privacy and intellectual property protection issues
  • Uber to be listed on the New York Stock Exchange and is predicted its initial public offering in April, at a value as high as $120billion
  • European stocks mixed following the worry of the Federal Reserve abandoned plans to raise interest rates this year. The FTSE 100 set to open 28 points down, Dax 20 points lower but the CAC to trade higher by 2 points and FTSE MIB to jump 16 points
  • Passwords of Facebook users stored in writing and were accessible to around 200,000 employees, back dating since 2012
  • Garuda Indonesia to potentially scrap its multi-billion dollar order for 49 Boeing 737 Max 8 jets, following the recent incidents  

Asian overnight: Another mixed session in Asia, where falls in China and Hong Kong were offset by strength in Japan and Australia, follows on from a strong rebound in the US, where tech stocks lead the way higher. Some trade war concerns are tempering gains, but risk appetite is enjoying a general recovery.

UK, US and Europe: The UK now has until mid-April to sort a Brexit deal with the EU, or it must decide whether to take part in EU elections. A longer extension is available if the UK does take part, but the mid-April deadline piles on the pressure on MPs who have until now held out against agreeing a deal. Economic data today is dominated by flash PMIs, along with Canadian CPI and US existing home sales.

South Africa: Global equity markets are are trading mixed to modestly higher this morning as central banks (particularly the US Fed) all look to be taking a more dovish stance this week. The dollar has weakened post the FOMC guidance on Wednesday and in turn we have seen some dollar weakness, a slight uptick in commodity prices and some strength returning to the ZAR. Tencent Holdings is down 1% in Asia, suggestive of a soft start for major holding company Naspers. The BHP Group is flat on the day, suggestive of a similar start for local resource counters.

Economic calendar - key events and forecast (times in GMT)


Source: Daily FX Economic Calendar

8.15am – 9am – French, German, eurozone mfg & services PMI (March, flash):overall, activity in services is expected to weaken again but German manufacturing expected to improve. Markets to watch: eurozone indices, EUR crosses
12.30pm – Canada CPI (February):inflation to rise 0.2% MoM and 1.5% YoY, and core CPI to hold at 1.5% YoY. Markets to watch: CAD crosses
1.45pm – US mfg & services PMI (March, flash): service PMI to fall to 54.3 and manufacturing to rise to 54.7. Markets to watch: US indices, USD crosses
2pm – US existing home sales (February): sales fell 1.2% MoM. Markets to watch: USD crosses

Corporate News, Upgrades and Downgrades

  • Senior said that its aerospace division has been selected by Saab to supply components for the Boeing T-X advanced pilot training system.
  • Smiths saw first-half profit fall 13% to £174 million, while revenue rose 2% to £1.57 billion. The firm will spin off its medical business into a separate company.
  • Sanne reported a 5.8% rise in first-half pre-tax profit, to £23.7 million, and revenue was up 26% to £143 million.

Aggreko upgraded to buy at Stifel
Alstria Office upgraded to neutral at JPMorgan
EDP upgraded to buy at Goldman
Pearson upgraded to overweight at JPMorgan

ADO Properties downgraded to hold at ING
Lagardere cut to equal-weight at Morgan Stanley
Ophir Energy downgraded to hold at Jefferies
Wacker Chemie downgraded to hold at LBBW


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