By Geoffrey Smith
Investing.com -- Europe’s stock markets were higher after early trading on Tuesday but looked like they need a pause for breath after rallying strongly on Monday in response to encouraging manufacturing surveys from China and the U.S.
At 04:15 AM ET (08:15 GMT), the benchmark Euro Stoxx 600 was effectively changed at 383.74. Germany’s Dax was also flat, while the U.K.’s FTSE 100 owed most of its 0.4% gain to yet another kick to sterling in the wake of another failure by parliament to find a way out of the Brexit impasse on Monday night.
U.K. stocks seem to have succumbed to Brexit fatigue, unwilling to respond to incremental news that still leaves a wide range of outcomes possible.
Four days after the U.K. was due to leave the EU, the country’s final destination is still anywhere between a disruptive “Hard Brexit” with no transitional arrangements, and a parliamentary vote to scrap the whole process of leaving.
Parliament voted last night against all of the other options that represented attempts to find a compromise, leaving No Deal on April 12th as the legal default, and revocation of the so-called Article 50 process as the only legally guaranteed way of avoiding it. Anything else, such as a long extension of the deadline that Prime Minister Theresa May is reportedly preparing to ask the EU for, would be conditional on the unanimous approval of the 27 other EU member states.
In a generally quiet morning for corporate news, iron and steel stocks are in focus after BHP Billiton (LON:BHPB) became the second big FTSE-listed miner to warn about reduced output due to cyclone damage in Western Australia. Rio Tinto (LON:RIO) had warned earlier that its full-year output would now be at the low end of its forecast range as a result of disruptions to its operations there.
The Australian disruptions aggravate a supply squeeze going back to January caused by the suspension of some of Brazilian giant Vale’s operations in the wake of a fatal dam collapse. Iron ore prices have risen some 40% since then, providing a windfall for those lucky enough to be unaffected, such as Ferrexpo (LON:FXPO), which is based in Ukraine but listed in London. It was up 0.3% by 0800 GMT and is up over 10% over the last week.