World Markets Rally, Pound Rises on Hard-Fought Brexit Deal

World markets were mostly higher on Monday as traders cheered a long-awaited deal bolstering Britain’s exit from the European Union, even as opposition was rife.

In Europe, Germany’s DAX index was 1.2 percent higher at 11,329.40 and France’s CAC 40 rallied 1.4 percent to 5,015.15. Britain’s FTSE 100 index was up 1.2 percent at 7,035.14. Wall Street was set for a strong open. Futures for the broad S&P 500 index rose 1.3 percent to 2,663.30. Dow futures climbed 1.2 percent to 24,541.00.

Japan’s benchmark Nikkei 225, reopening after a holiday, added 0.8 percent to 21,812.00. South Korea’s Kospi jumped 1.2 percent to 2,083.02. Hong Kong’s Hang Seng index rebounded 1.7 percent to 26,376.18. The Shanghai Composite dipped 0.1 percent to 2,575.81. Australia’s S&P/ASX 200 lost 0.8 percent to 5,671.60. Shares rose in Taiwan and throughout Southeast Asia.

The European Union and Britain have finally sealed an agreement governing the latter’s departure from the bloc on March 29. This comes after months of hesitation, stop-and-start negotiations and resignations.

British Prime Minister Theresa May must now get her divided Parliament to back the deal, which leaves Britain subject to rules and obligations of the bloc at least until the end of 2020 and possibly longer. May has urged lawmakers to back what she deems the “best possible deal,” but is facing opposition from both pro-Brexit and pro-EU camps. Her critics include Arlene Foster, leader of Northern Ireland’s Democratic Unionist Party (DUP), and former British Foreign Secretary Boris Johnson.

Traders may be celebrating too soon, Chris Weston of Pepperstone Group Limited said in a market commentary. “As things stand, the numbers just aren’t there with Labour and the DUP Party saying they won’t vote this deal through, while some 25 percent of May’s own party is not on board. A deal is likely to be voted down,” he explained.

Sentiment was also lifted by hopes that President Donald Trump and his Chinese counterpart Xi Jinping will unwind a blistering trade dispute this week. The leaders are scheduled to meet at the Group of 20 summit in Buenos Aires. Topping the agenda is a trade dispute over Beijing’s technology policy, which has caused the U.S. and China to impose tariffs on billions of dollars of each other’s goods.

Chang Wei Liang of Mizuho Bank said that “an agreement for talks over dinner suggests a higher level of engagement, which could result in a gentlemen’s agreement not to escalate tariffs further.”

Oil prices recovered after plunging on worries that a slowing global economy could hurt demand for oil. Benchmark U.S. crude added 78 cents to $51.20. The contract plunged $4.21 to close at $50.42 in New York. Brent crude, the international standard, gained $1.30 to $60.10. It finished $3.80 lower at $58.80 in London.

The dollar strengthened to 113.28 yen from 112.96 yen late Friday. The euro jumped to $1.1369 from $1.1339. The pound rose to $1.2834 from $1.2819.