NEW YORK, March 20 — European stock markets rose yesterday, while the pound steadied after strong British jobs data as traders braced for more Brexit chaos and awaited the US Federal Reserve’s latest policy meeting.
British Prime Minister Theresa May held crisis talks with her ministers after the speaker of parliament threatened to derail her EU withdrawal plan just 10 days before Brexit day.
The fallout from Brexit was however offset by official data showing that the British unemployment rate hit a 44-year low at 3.9 per cent, while wages continued to outpace inflation.
“It appears that the labour market is still in remarkably rude health despite the ongoing calamity surrounding Brexit,” noted David Cheetham, chief market analyst at the XTB trading group.
“In terms of market reaction there has been a little pop higher in the pound, but the markets remain far more concerned with the latest on the Brexit front.”
May will write to EU President Donald Tusk with a plan for delaying Brexit beyond March 29, her spokesman said yesterday, admitting the parliamentary deadlock has reached crisis levels.
The letter will be sent before May heads to a Brussels summit tomorrow.
Michel Barnier, the European Union’s chief negotiator, warned yesterday that any extension of the Brexit talks would have “political and economic costs” for the remaining 27 EU states.
“A long extension... should be linked to something new, a new element or new political process,” Barnier told reporters, urging May to secure the backing of the British parliament for any request.
“How can we ensure that, at the end of a possible extension, we are not back in the same situation as today?” he asked.
Germany powers ahead
In the eurozone, Frankfurt powered ahead by more than 1 per cent after a survey showed confidence among investors in Europe’s largest economy Germany rose in March, as fears of a hard Brexit briefly receded earlier this month and progress in US-China trade talks soothed nerves.
The ZEW institute’s monthly confidence index added 9.8 points for a reading of minus 3.6 — still in negative territory, but picking up the pace of recovery from a deep trough the indicator plumbed in October and November.
Wall Street began strongly, but weakened following a Bloomberg report that described tensions between the United States and China on trade terms that could pose problems for a broad agreement.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will return to Beijing next week to resume talks, a senior administration official told AFP yesterday.
The Fed today is expected to keep interest rates unchanged and could signal it anticipates fewer interest rate hikes in 2019.
Key figures around 2050 GMT
New York — DOW: DOWN 0.1 per cent at 25,887.38 (close)
New York — S&P 500: FLAT at 2,832.57 (close)
New York — Nasdaq: UP 0.1 per cent 7,723.95 (close)
London — FTSE 100: UP 0.3 per cent at 7,324.00 (close)
Frankfurt — DAX 30: UP 1.1 per cent at 11,788.41 (close)
Paris — CAC 40: UP 0.2 per cent at 5,425.90 (close)
EUROSTOXX 50: UP 0.6 per cent at 3,409.00 (close)
Tokyo — Nikkei 225: DOWN 0.1 per cent at 21,566.85 (close)
Hong Kong — Hang Seng: UP 0.2 per cent at 29,466.28 (close)
Shanghai — Composite: DOWN 0.2 per cent at 3,090.98 (close)
Pound/dollar: UP at US$1.3268 from US$1.3255 at 2100 GMT on Monday
Euro/pound: UP at 85.55 pence from 85.54 pence
Euro/dollar: UP at US$1.1351 from US$1.1337
Dollar/yen: DOWN at ¥111.40 from ¥111.43
Oil — Brent Crude: UP 7 cents at US$67.61 per barrel
Oil — West Texas Intermediate: DOWN 6 cents at US$59.03 per barrel — AFP
