LONDON – News that the U.S. has reached a preliminary agreement with Mexico on replacing a North American free-trade deal has helped shore up global stock markets on Tuesday.
KEEPING SCORE: In Europe, France’s CAC 40 rose 0.3 per cent to 5,496, while Germany’s DAX was up 0.2 per cent at 12,561. Britain’s FTSE 100 gained 0.3 per cent to 7,600. U.S. shares were poised for a solid opening with Dow futures and the S&P 500 futures up 0.2 per cent.
TRADE DEAL: On Monday, the Trump administration reached a preliminary deal with Mexico to replace the North American Free Trade Agreement. President Donald Trump suggested that he might leave Canada, America’s No. 2 trading partner, out of a new agreement and that he wanted to call the revamped trade pact “the United States-Mexico Trade Agreement” because, in his view, NAFTA had earned a reputation as being harmful to American workers.
ANALYST TAKE: “A renewed sense of positivity and optimism continues to be felt across financial markets after the United States and Mexico reached a breakthrough deal over the NAFTA trade agreement,” said Lukman Otunaga, research analyst at FXTM. “This highly encouraging development may ease trade war fears, elevate global sentiment and stimulate appetite for riskier assets. Although it remains uncertain whether Canada will join the agreement, there is an expectation that the nation agrees to the new terms in an effort to conserve the three-nation pact.”
ASIA’S DAY: Japan’s benchmark Nikkei 225 finished at 22,813.47, up 0.1 per cent. Australia’s S&P/ASX 200 gained 0.6 per cent to 6,304.70. South Korea’s Kospi edged up 0.2 per cent to 2,303.12. Hong Kong’s Hang Seng added 0.2 per cent to 28,333.14 after fluctuating throughout the day. The Shanghai Composite index inched down 0.1 per cent to 2,777.98, adjusting from its gains the previous day.
ENERGY: Benchmark U.S. crude was up 6 cents at $68.93 a barrel while Brent crude, used to price international oils, rose 50 cents to $76.71 a barrel.
CURRENCIES: The euro was up 0.2 per cent at $1.1703 while the dollar was steady at 111.04 yen.