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Global stock markets gain as investors predict cautious Federal Reserve – business live Global stock markets gain as investors predict cautious Federal Reserve – as it happened
(32 minutes later)
A placid day on global stock markets has been enlivened by a series of big-money corporate announcements.
Shares in Deutsche Bank and Commerzbank have both risen after they finally confirmed that merger talks are going on. There is still a long way to go politically and financially before any deal is finalised, but the German government will be hoping that it can spur the creation of national champion after a decade of malaise for the country’s banking sector.
Top of today’s bill financially is US fintech firm FIS’s swoop on Worldpay, the former Royal Bank of Scotland unit which has ridden the wave of demand for payments technology. The deal, including debt, is worth $43bn (£32bn). The Worldpay brand will disappear, and the new company will be headquartered in Florida.
An initial public offering for Lyft, a rival to ride-hailing company Uber, is set to provide some excitement on US primary markets. Lyft will aim to raise $2.1bn (£1.6bn) as it tries to keep up the pressure on its larger competitor – at a heady valuation of as much as $23bn.
And last, if not least for British consumers, JD Sports has agreed to buy Footasylum in a deal which values the struggling Aim-listed shoe retailer at £90.1m.
On economics and markets news it was very much the calm before the storm – or at least a few squalls – in a week in which the Federal Reserve and the Bank of England make monetary policy announcements.
The FTSE 100 has gained 0.8% for the day with an hour and a half to go until the close, after supermarket J Sainsbury made a late dash to the top of the market. The mining sector also performed strongly, likely buoyed by sterling weakness as investors awaited progress on Brexit.
And finally, gluttons for punishment can follow the “will they, won’t they” on another meaningful vote on Theresa May’s Brexit deal or an extension of the negotiating period on the Guardian’s politics live blog. There are 11 days to go until the planned date of Brexit.
No 10 says it won't call Brexit vote this week unless it has 'prospect of success' - Politics live
Thanks for following the business live blog today. JJ
Sterling has come under some more pressure this afternoon, with little sign of the breakthrough needed in the Brexit vote to get a deal through parliament.Sterling has come under some more pressure this afternoon, with little sign of the breakthrough needed in the Brexit vote to get a deal through parliament.
The pound is now down by 0.6% against the euro and 0.4% against the US dollar (see chart).The pound is now down by 0.6% against the euro and 0.4% against the US dollar (see chart).
There will be an urgent question today after 4:15pm on the procedure to be followed to extend the article 50 negotiation.There will be an urgent question today after 4:15pm on the procedure to be followed to extend the article 50 negotiation.
That comes after 23 Brexit-backing Tories said they would not follow logic laid down by backbencher Jacob Rees-Mogg and vote for Prime Minister Theresa May’s deal to secure Brexit.That comes after 23 Brexit-backing Tories said they would not follow logic laid down by backbencher Jacob Rees-Mogg and vote for Prime Minister Theresa May’s deal to secure Brexit.
May reportedly wants to threaten Brexit-backing MPs with the prospect of no Brexit if an extension is allowed through.May reportedly wants to threaten Brexit-backing MPs with the prospect of no Brexit if an extension is allowed through.
British budget airline easyJet has pulled out of talks to buy bankrupt Italian airline Alitalia, it said in a statement on Monday afternoon.British budget airline easyJet has pulled out of talks to buy bankrupt Italian airline Alitalia, it said in a statement on Monday afternoon.
easyJet had been in discussions with Ferrovie dello Stato Italiane and Delta Air Lines about forming a consortium to take over all or part of the Italian flagcarrier.easyJet had been in discussions with Ferrovie dello Stato Italiane and Delta Air Lines about forming a consortium to take over all or part of the Italian flagcarrier.
In its statement, easyJet said it “has taken the decision to withdraw from the process”.In its statement, easyJet said it “has taken the decision to withdraw from the process”.
easyJet remains committed to Italy, as a key market for the company, where it currently carries 18.5m passengers every year and employs 1,400 pilots and crew, all on local contracts. We continue to invest in the three bases in Milan, Naples, Venice, as we have done by basing additional aircraft in Venice and Naples last summer.easyJet remains committed to Italy, as a key market for the company, where it currently carries 18.5m passengers every year and employs 1,400 pilots and crew, all on local contracts. We continue to invest in the three bases in Milan, Naples, Venice, as we have done by basing additional aircraft in Venice and Naples last summer.
The Italian government has been struggling to find a buyer for Alitalia in order to avoid a politically damaging liquidation. However, Italian media had reported that the government was opposed to easyJet’s plans to break up Alitalia.The Italian government has been struggling to find a buyer for Alitalia in order to avoid a politically damaging liquidation. However, Italian media had reported that the government was opposed to easyJet’s plans to break up Alitalia.
An interesting move from British hotel chain Travelodge in response to the low unemployment rate: targeted recruitment of parents to work.An interesting move from British hotel chain Travelodge in response to the low unemployment rate: targeted recruitment of parents to work.
Travelodge wants to recruit parents returning to work to fill post-Brexit staffing gaps, as it pushes ahead with 100 hotel openings that will create 3,000 jobs over the next five years, writes Julia Kollewe.Travelodge wants to recruit parents returning to work to fill post-Brexit staffing gaps, as it pushes ahead with 100 hotel openings that will create 3,000 jobs over the next five years, writes Julia Kollewe.
Travelodge seeks parents to fill post-Brexit staffing gapsTravelodge seeks parents to fill post-Brexit staffing gaps
Travelodge chief executive Peter Gowers said:Travelodge chief executive Peter Gowers said:
We are preparing in earnest for post-Brexit Britain. With thousands of new jobs to fill, we need more new colleagues than ever. We see vast untapped potential in parents who want to return to work.We are preparing in earnest for post-Brexit Britain. With thousands of new jobs to fill, we need more new colleagues than ever. We see vast untapped potential in parents who want to return to work.
The Dow Jones Industrial Average fell by 47 points, or 0.18%, at the open to hit 25,801.88 points. Boeing, one of the 30 index constituents, fell by another 2.3%.The Dow Jones Industrial Average fell by 47 points, or 0.18%, at the open to hit 25,801.88 points. Boeing, one of the 30 index constituents, fell by another 2.3%.
The S&P 500 rose by only 0.13 points to 2,822.61, while the Nasdaq Composite gained 7.85 points, or 0.1%, to 7,696.38.The S&P 500 rose by only 0.13 points to 2,822.61, while the Nasdaq Composite gained 7.85 points, or 0.1%, to 7,696.38.
US markets are not expected to follow the mildly positive mood set in Europe, with shares in aircraft manufacturer Boeing set to drop further when markets open.US markets are not expected to follow the mildly positive mood set in Europe, with shares in aircraft manufacturer Boeing set to drop further when markets open.
Boeing shares fell by 2.4% in pre-market trading, after Ethiopia’s transport minister said there were “clear similarities” between two crashes involving the manufacturer’s 737 Max model.Boeing shares fell by 2.4% in pre-market trading, after Ethiopia’s transport minister said there were “clear similarities” between two crashes involving the manufacturer’s 737 Max model.
The crash of Ethiopian Airlines flight 302 on 10 March and that of a Lion Air plane in Indonesia in October prompted the US and other countries to ground the Boeing 737 Max fleet.The crash of Ethiopian Airlines flight 302 on 10 March and that of a Lion Air plane in Indonesia in October prompted the US and other countries to ground the Boeing 737 Max fleet.
Futures in the S&P 500 and the Nasdaq indicated they would remain flat at the open.Futures in the S&P 500 and the Nasdaq indicated they would remain flat at the open.
More detail on the merger talks between Deutsche Bank and Commerzbank.More detail on the merger talks between Deutsche Bank and Commerzbank.
Deutsche is one of the biggest banking employers in London, with its once mighty investment bank still employing 7,500 people in the capital.Deutsche is one of the biggest banking employers in London, with its once mighty investment bank still employing 7,500 people in the capital.
Analysts at Barclays warned that while the “status quo is not sustainable in the long term” for Deutsche Bank, a Commerzbank tie-up would not be a quick fix. You can read more here:Analysts at Barclays warned that while the “status quo is not sustainable in the long term” for Deutsche Bank, a Commerzbank tie-up would not be a quick fix. You can read more here:
Deutsche Bank and Commerzbank confirm merger talksDeutsche Bank and Commerzbank confirm merger talks
A just-after-midday markets round-up: major European indices remain on the front foot – barring Germany’s Dax, which has slipped to a 0.2% loss so far.A just-after-midday markets round-up: major European indices remain on the front foot – barring Germany’s Dax, which has slipped to a 0.2% loss so far.
The FTSE 100 has gained 0.6%, led by British American Tobacco, whose shares have risen by 2.4%. Miners continue to do well, while Lloyds Banking Group and J Sainsbury have both gained 1.7%. The mid-cap FTSE 250 is up by 0.4%.The FTSE 100 has gained 0.6%, led by British American Tobacco, whose shares have risen by 2.4%. Miners continue to do well, while Lloyds Banking Group and J Sainsbury have both gained 1.7%. The mid-cap FTSE 250 is up by 0.4%.
Sterling is down by 0.15% against the US dollar at $1.3270 at the time of writing, while against the euro it has pared some of its earlier losses: a pound bought €1.1686, down 0.4% over the day.Sterling is down by 0.15% against the US dollar at $1.3270 at the time of writing, while against the euro it has pared some of its earlier losses: a pound bought €1.1686, down 0.4% over the day.
The longer Brexit uncertainty continues, the lower the chances of the Bank of England raising interest rates at all during 2019.The longer Brexit uncertainty continues, the lower the chances of the Bank of England raising interest rates at all during 2019.
Anything other than a 9-0 vote to maintain bank rate, the rate at which the Bank of England lends to commercial lenders, would be “inconceivable”, according to Howard Archer, chief economic advisor to the EY Item Club.Anything other than a 9-0 vote to maintain bank rate, the rate at which the Bank of England lends to commercial lenders, would be “inconceivable”, according to Howard Archer, chief economic advisor to the EY Item Club.
With Brexit now looking likely to be delayed and the economy looking soft overall in the first quarter, we believe that it is ever more likely that the Bank of England will sit tight on interest rates throughout 2019 – assuming that the UK ultimately leaves the EU with a ‘deal’.With Brexit now looking likely to be delayed and the economy looking soft overall in the first quarter, we believe that it is ever more likely that the Bank of England will sit tight on interest rates throughout 2019 – assuming that the UK ultimately leaves the EU with a ‘deal’.
If there is a UK exit from the EU with a ‘deal’ by the end of the second quarter, it is possible that the Bank of England could raise interest rates from 0.75% to 1% in November if the economy is showing improvement helped by reduced uncertainty.If there is a UK exit from the EU with a ‘deal’ by the end of the second quarter, it is possible that the Bank of England could raise interest rates from 0.75% to 1% in November if the economy is showing improvement helped by reduced uncertainty.
Even if this is the case though, the MPC could prefer to hold off acting for longer as it may well want to see sustained evidence of stronger UK economic activity.Even if this is the case though, the MPC could prefer to hold off acting for longer as it may well want to see sustained evidence of stronger UK economic activity.
The Bank’s reticence to raise rates has been hinted at by Gertjan Vlieghe and Silvana Tenreyro, two of the nine-member monetary policy committee.The Bank’s reticence to raise rates has been hinted at by Gertjan Vlieghe and Silvana Tenreyro, two of the nine-member monetary policy committee.
Weaker growth prospects have come on top of concerns about Brexit, according to Martin Beck, lead UK economist at Oxford Economics, a consultancy. He expects a 9-0 vote to keep policy unchanged, saying:Weaker growth prospects have come on top of concerns about Brexit, according to Martin Beck, lead UK economist at Oxford Economics, a consultancy. He expects a 9-0 vote to keep policy unchanged, saying:
The economy’s recent performance has been broadly in line with the MPC’s expectations. But public pronouncements by some committee members on downside risks have indicated a dovish shift around the pace of future rate hikes.The economy’s recent performance has been broadly in line with the MPC’s expectations. But public pronouncements by some committee members on downside risks have indicated a dovish shift around the pace of future rate hikes.
In February the Bank downgraded its annual GDP growth forecast for 2019 by 0.5 percentage points to only 1.2%.In February the Bank downgraded its annual GDP growth forecast for 2019 by 0.5 percentage points to only 1.2%.
Meanwhile, even Michael Saunders – who has recently been the most hawkish member of the MPC, favouring increases in interest rates – has said that Brexit uncertainty means it is best to wait before tightening further. Beck said:Meanwhile, even Michael Saunders – who has recently been the most hawkish member of the MPC, favouring increases in interest rates – has said that Brexit uncertainty means it is best to wait before tightening further. Beck said:
In light of the continued failure to get a Brexit deal through Parliament, Brexit uncertainty remains a key block on action by the MPC.In light of the continued failure to get a Brexit deal through Parliament, Brexit uncertainty remains a key block on action by the MPC.
The Bank of England will also be in action later this week, with a monetary policy announcement on Thursday at midday.The Bank of England will also be in action later this week, with a monetary policy announcement on Thursday at midday.
Anything other than a unanimous vote to keep interest rates on hold would be a shock, for fairly obvious reasons.Anything other than a unanimous vote to keep interest rates on hold would be a shock, for fairly obvious reasons.
Governor Mark Carney and the eight other members of the monetary policy committee have been fairly open in their judgement that Brexit uncertainty is holding back growth. The Bank’s forecasts in February suggested that GDP growth this year will be the slowest since the financial crisis.Governor Mark Carney and the eight other members of the monetary policy committee have been fairly open in their judgement that Brexit uncertainty is holding back growth. The Bank’s forecasts in February suggested that GDP growth this year will be the slowest since the financial crisis.
Footasylum shares are up by 74% to 81p today thanks to JD Sports’ offer, but that is still far below the flotation price of 164p in November 2017, when Footasylum was valued at £171m.Footasylum shares are up by 74% to 81p today thanks to JD Sports’ offer, but that is still far below the flotation price of 164p in November 2017, when Footasylum was valued at £171m.
The 70-store chain, which focuses on selling branded trainers and tops to 16- to 24-year-olds, has issued a number of profit warnings since it floated, writes the Guardian’s Julia Kollewe.The 70-store chain, which focuses on selling branded trainers and tops to 16- to 24-year-olds, has issued a number of profit warnings since it floated, writes the Guardian’s Julia Kollewe.
JD Sports to buy Footasylum for £90mJD Sports to buy Footasylum for £90m
It’s something of a return to the fold for Footasylum, which was started in 2005 by the founder of JD Sports.It’s something of a return to the fold for Footasylum, which was started in 2005 by the founder of JD Sports.
Both retailers are headquartered in Greater Manchester and JD Sports said there could be cost savings by moving some of Footasylum’s headquarters operations to its own base.Both retailers are headquartered in Greater Manchester and JD Sports said there could be cost savings by moving some of Footasylum’s headquarters operations to its own base.
US ride-hailing app Lyft hopes to raise as much as $2.1bn (£1.6bn) in an initial public offering, beating its rival, Uber, to a stock market float.US ride-hailing app Lyft hopes to raise as much as $2.1bn (£1.6bn) in an initial public offering, beating its rival, Uber, to a stock market float.
Updated documents published on Monday show that it will offer 30.8m shares on the Nasdaq exchange in New York. Lyft hopes they will sell for between $62 and $68 per share.Updated documents published on Monday show that it will offer 30.8m shares on the Nasdaq exchange in New York. Lyft hopes they will sell for between $62 and $68 per share.
Lyft is seen as one of the major rivals to Uber, another US firm leading the charge in transport services.Lyft is seen as one of the major rivals to Uber, another US firm leading the charge in transport services.
Lyft is not currently available in the UK, where Uber dominates among taxi hailing apps. However, both have been investing heavily in autonomous vehicle technology, which will remove the need to pay drivers’ fees, and electric scooter services for city centre travel.Lyft is not currently available in the UK, where Uber dominates among taxi hailing apps. However, both have been investing heavily in autonomous vehicle technology, which will remove the need to pay drivers’ fees, and electric scooter services for city centre travel.
Just don’t expect any movement on interest rates from the Federal Reserve.Just don’t expect any movement on interest rates from the Federal Reserve.
The handy Fedwatch tool from exchange firm CME Group shows what the likelihood of a rate move is, based on investors’ derivative purchases. On the left, it shows a 1.3% chance of a cut in rates, compared to a 98.7% chance of remaining stable.The handy Fedwatch tool from exchange firm CME Group shows what the likelihood of a rate move is, based on investors’ derivative purchases. On the left, it shows a 1.3% chance of a cut in rates, compared to a 98.7% chance of remaining stable.
We should expect lower Fed forecasts for future rate hikes, GDP growth, and inflation, according to economists at UBS.We should expect lower Fed forecasts for future rate hikes, GDP growth, and inflation, according to economists at UBS.
Members of the rate-setting Federal Open Market Committee are all but certain to leave interest rates on hold, at least if market expectations are anything to go by. Disappointing economic data have prompted a string of more cautious statements from Fed members.Members of the rate-setting Federal Open Market Committee are all but certain to leave interest rates on hold, at least if market expectations are anything to go by. Disappointing economic data have prompted a string of more cautious statements from Fed members.
“The steady beat of weak data will have increased the pessimism on the part of the committee,” said UBS economists, led by Seth Carpenter.“The steady beat of weak data will have increased the pessimism on the part of the committee,” said UBS economists, led by Seth Carpenter.
We anticipate that the theme from the March meeting will, once again, be ‘patience’. While the FOMC continues to see a relatively robust US economy, various members are seeing increasing downside risks to the outlook.We anticipate that the theme from the March meeting will, once again, be ‘patience’. While the FOMC continues to see a relatively robust US economy, various members are seeing increasing downside risks to the outlook.
The end of the current bout of quantitative tightening could start in July, with the balance sheet stabilised in December, UBS said.The end of the current bout of quantitative tightening could start in July, with the balance sheet stabilised in December, UBS said.
Let’s get some more on what is shaping up to be the major story driving global markets this week: the Federal Reserve’s latest monetary policy decision on Wednesday.Let’s get some more on what is shaping up to be the major story driving global markets this week: the Federal Reserve’s latest monetary policy decision on Wednesday.
A rate change is unlikely after the central bank previously said it would be patient in its approach, said Kit Juckes, global chief fixed income strategist at Société Générale. Nevertheless, market moves on Monday “mostly reflect optimism that the Fed has the market and investors’ backs”, he said.A rate change is unlikely after the central bank previously said it would be patient in its approach, said Kit Juckes, global chief fixed income strategist at Société Générale. Nevertheless, market moves on Monday “mostly reflect optimism that the Fed has the market and investors’ backs”, he said.
The key decision facing monetary policymakers in Washington is what to do with a balance sheet which peaked at $4.5 trillion in assets – mainly built up under the quantitative easing programme to stimulate the economy following the financial crisis.The key decision facing monetary policymakers in Washington is what to do with a balance sheet which peaked at $4.5 trillion in assets – mainly built up under the quantitative easing programme to stimulate the economy following the financial crisis.
Some investors appear concerned that selling off those assets – dubbed quantitative tightening – could have the reverse effect, slowing the economy further. Fed chair Jerome Powell may have a tricky job in balancing the desire to continue raising rates with caution on the economy.Some investors appear concerned that selling off those assets – dubbed quantitative tightening – could have the reverse effect, slowing the economy further. Fed chair Jerome Powell may have a tricky job in balancing the desire to continue raising rates with caution on the economy.
Juckes said:Juckes said:
We think they’ll confirm that the Fed’s balance sheet run-off will end this year, though they may not give us a lot more detail than that. As for rate policy, ‘patience’ is the watchword.We think they’ll confirm that the Fed’s balance sheet run-off will end this year, though they may not give us a lot more detail than that. As for rate policy, ‘patience’ is the watchword.
There is likely a lot of water to flow under the Brexit bridge today, which could drive movements on British markets. The early signs have not been encouraging for Prime Minister Theresa May’s deal.There is likely a lot of water to flow under the Brexit bridge today, which could drive movements on British markets. The early signs have not been encouraging for Prime Minister Theresa May’s deal.
Senior Democratic Unionist party politician Jim Wells said he does not think May would win a third vote on her deal even if his party does swing behind it because of a hard core of Conservative party Eurosceptics.Senior Democratic Unionist party politician Jim Wells said he does not think May would win a third vote on her deal even if his party does swing behind it because of a hard core of Conservative party Eurosceptics.
Boris Johnson, the former foreign secretary, on Monday positioned himself firmly on the Eurosceptic side, while another 23 backbench Tories also wrote in the Telegraph that they would not back the deal. Read the full story here:Boris Johnson, the former foreign secretary, on Monday positioned himself firmly on the Eurosceptic side, while another 23 backbench Tories also wrote in the Telegraph that they would not back the deal. Read the full story here:
DUP backing will not secure May's Brexit deal, says Jim WellsDUP backing will not secure May's Brexit deal, says Jim Wells
You can follow all the twists and turns throughout the day on the Guardian politics live blog, ahead of an expected vote tomorrow.You can follow all the twists and turns throughout the day on the Guardian politics live blog, ahead of an expected vote tomorrow.