Central banks in spotlight amid Brexit uncertainty and growth concerns
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.
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.
We should expect lower Fed forecasts for future rate hikes, GDP growth, and inflation, according to economists at UBS.
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.
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.
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.
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.
Resilience in the face of uncertainty is the upshot from the finances survey, according to Tim Moore, associate directorat IHS Markit.
He said: “March data indicate a degree of resilience for UK household sentiment in response to turbulent domestic political events. Concerns about job security and the outlook for financial wellbeing moderated slightly since February, although remain more widespread than in 2018.
A sharp drop in UK households’ appetite for major purchases was the main signal that Brexit uncertainty had some impact on consumer spending. This index was close to a five-year low, which may reflect a wait-and-see approach to holiday bookings and other big-ticket spending commitments during the latest survey period.
Britons appear to be battening down the hatches, reining back big purchases, according to data published this morning by data firm IHS Markit.
The survey found the fastest fall in UK households’ appetite for major purchases like cars and holidays for 18 months – a sign of financial caution.
Resilient labour market conditions appear to have supportedhouseholds’ expectations for their finances over the next 12 months.
It’s looking very green across major European stock markets.
London stocks are jostling with Italy to lead the way this morning – how often has that been the case in recent months?
On currency markets sterling is starting to lose some ground as traders take stock of a turbulent week ahead.
Against the euro the pound has fallen by 0.4% over the course of the day, while against the US dollar it has lost just under 0.3%.
US financial technology firm FIS will buy Worldpay in a deal which values it at $43bn (£32bn), the companies said on Monday.
Payments company Worldpay was founded in the UK, before being bought by Royal Bank of Scotland. However, it was sold as part of the deal for its government bailout, and has been acquired multiple times – including a £9.3bn deal in 2017.
The FTSE’s mining cohort is making the running this morning, pushing the index up by half a percentage point.
Rio Tinto is the biggest gainer, up by about 2.2%, but it’s barely ahead of a procession of miners.
Shares in Footasylum have surged this morning after its larger rival JD Sports swooped with an offer for the struggling shoe retailer.
The deal values Footasylum at £90.1m, after the retailer struggled with British consumer uncertainty and sluggish spending.
The FTSE 100 has risen at the start of the week, up by about 0.3% in the first minutes of trading.
Early gainers on London’s blue-chip index include Rio Tinto, Rolls-Royce and BHP Group.
Germany’s two largest listed banks revealed they have started formal merger talks at the weekend, after a long period of struggles at Deutsche Bank.
Commerzbank told investors that it has started “discussions with an open outcome on a potential merger”. Deutsche Bank’s chief executive, Christian Sewing, said it will “pursue options that make economic sense”.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Investors on global stock markets appear to have taken heart ahead of a big week for central banks. The Bank of England’s monetary policy committee announces its latest decision on interest rates on Thursday, but it is the US Federal Reserve which is driving the conversation on markets.
Timing of 3rd meaningful vote (MV3) remains uncertain. British govt will only hold MV3 on PM May’s Brexit deal this week if it believes it can win. Corbyn appeared to signal that his party would back amendment aimed at securing 2nd Brexit ref, set to be tabled this wk. (via Citi) pic.twitter.com/1LTHU14nPK