Global stock markets gain as investors predict cautious Federal Reserve – as it happened

Central banks in spotlight amid Brexit uncertainty and growth concerns

3.02pm GMT

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.

Related: No 10 says it won't call Brexit vote this week unless it has 'prospect of success' - Politics live

2.24pm GMT

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).

2.15pm GMT

British budget airline easyJet has pulled out of talks to buy bankrupt Italian airline Alitalia, it said in a statement on Monday afternoon.

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.

1.48pm GMT

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.

Related: Travelodge seeks parents to fill post-Brexit staffing gaps

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.

1.39pm GMT

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.

1.29pm GMT

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.

12.29pm GMT

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.

Related: Deutsche Bank and Commerzbank confirm merger talks

12.21pm GMT

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%.

12.10pm GMT

The longer Brexit uncertainty continues, the lower the chances of the Bank of England raising interest rates at all during 2019.

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.

11.59am GMT

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:

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 light of the continued failure to get a Brexit deal through Parliament, Brexit uncertainty remains a key block on action by the MPC.

11.51am GMT

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.

11.43am GMT

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.

Related: JD Sports to buy Footasylum for 90m

11.06am GMT

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.

10.48am GMT

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.

10.41am GMT

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.

10.18am GMT

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 Socii(C)ti(C) Gi(C)ni(C)rale. 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.

9.59am GMT

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.

Related: DUP backing will not secure May's Brexit deal, says Jim Wells

9.47am GMT

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.

9.44am GMT

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.

9.29am GMT

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?

9.10am GMT

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%.

8.54am GMT

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.

8.34am GMT

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.

8.22am GMT

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.

8.04am GMT

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.

8.00am GMT

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".

7.47am GMT

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