Pound strengthens on Brexit extension - as it happened
The pound rises against the euro and the dollar after EU leaders give Theresa May a Brexit deadline extension
- Weak eurozone 'flash' PMI surveys point to 0.2% growth in Q1
- Factory output falls at fastest rate in six years in eurozone
- FTSE falls 100 points, markets see sharp falls
- US business growth slows in March
2.59pm GMT
It's been a good day for the pound, boosted by the decision among EU leaders to grant an extension to the Brexit deadline, taking the prospect of a no-deal departure on 29 March off the table.
The pound is up 1.4% against the euro, at a1.1676, and up 0.5% against the dollar at $1.3172.
2.43pm GMT
Losses are building on both sides of the Atlantic, as fears of a slowing global economy weigh.
The FTSE 100 is down 117 points or 1.6% at 7,239.
2.21pm GMT
Sticking with the US, data just out shows a surge in the number of previously owned homes in February.
Existing home sales rose 11.8% over the month to 5.5 million according to the National Association of Realtors.
A strong labor market and wage growth appear to be underpinning the housing market https://t.co/dMyK782DzO
2.10pm GMT
US Flash PMI falls to 6-month low of 54.3ai, from 55.5 - Feb. Factory slowdown again apparent here, with goods production growth at 33-month low, but service sector growth also eased. Survey suggests growth will remain above 2% in Q1. More: https://t.co/bGpGqFs4M9 pic.twitter.com/27h2nXFl9F
2.08pm GMT
The flash US PMI surveys for March show that growth slowed over the month in both the manufacturing and services sectors.
Here are the headline numbers from IHS Markit's report (where anything above 50 signals growth):
US businesses reported a softer end to the first quarter, with output growth easing to the second lowest recorded over the last year. The PMI survey data nevertheless remain encouragingly resilient, indicative of the economy growing at an annualised rate in excess of 2% in the first quarter, suggesting some potential upside to many current growth forecasts.
A gap has opened up between the manufacturing and service sectors, however, with goods-producers and exporters struggling amid a deteriorating external environment and concerns regarding the impact of trade wars. The survey is consistent with the official measure of manufacturing production falling at an increased rate in March and hence acting as a drag on the economy in the first quarter.
1.33pm GMT
The opening bell has rung and US markets are down after yesterday's bounce:
12.43pm GMT
Ouch! That's the reaction of HSBC economist Fabio Balboni, to this morning's disappointing eurozone PMI surveys. He adds:
Clearly, the manufacturing sector in the eurozone is not out of the woods yet. Today's print suggest industrial activity has not bottomed out yet. Export orders continue to fall, particularly in Germany, which accounts for almost a third of manufacturing activity in the eurozone. The automobile sector seems to be the main culprit.
At those levels, despite the strong January print, it will be hard for the eurozone to emerge from the industrial recession it entered in the second half of last year. The survey provider (IHS Markit) said this points to another 0.5% quarter-on-quarter contraction in industrial activity in the first quarter of the year. Furthermore, the weakness in March could also set the tone for another disappointing quarter in Q2.
12.00pm GMT
Today we celebrate 25th birthday of European Economic Area. A long-term partnership where all contribute and benefit.
With resurgent nationalism and geopolitical tensions, #EEA is firmly on the side of wisdom, rule of law, cooperation and deeper integration among our nations. pic.twitter.com/05X7ZJ7F36
Wonder what he's getting at?
11.55am GMT
Mario Draghi, president of the European Central Bank, has warned that companies across the EU must step-up preparations for a no-deal Brexit.
According to a report running on Reuters, he told EU leaders at the summit in Brussels:
Authorities and central banks are prepared but the private sector has to step up preparations.
11.45am GMT
UK travel firm Thomas Cook has announced it is closing 21 stores and cutting back on retail staff, resulting in the loss of 320 jobs.
Today's announcement reflects the wider challenges seen on the high street, with more and more customers choosing to book online.
These measures will help us to drive greater efficiencies across Thomas Cook so that we relentlessly focus our resources in those areas that give us the greatest opportunity to make a difference to customers in our core holiday offering.
Related: Thomas Cook to close 21 stores and cut jobs as part of efficiency plan
11.12am GMT
Boeing's woes have deepened this morning after the Indonesian airline Garuda cancelled a multibillion-dollar order for 49 Boeing 737 Max 8 jets.
Garuda said its passengers had "lost trust" in the model, after two fatal crashes involving the plane.
We have sent a letter to Boeing requesting that the order be cancelled.
The reason is that Garuda passengers in Indonesia have lost trust and no longer have the confidence"
Related: Indonesian airline Garuda cancels order for 49 Boeing 737 Max 8 jets
10.50am GMT
The pound continues to climb against both the euro and the dollar:
10.32am GMT
Germany's 10-year government bond yields turned negative earlier for the first time since October 2016.
The move represented heightened caution as the weak eurozone manufacturing data and Brexit uncertainty raised fears about the prospects of the wider economy.
Fluid #Brexit cliff edge leads to more flight-to-quality. German 10y bond yields at zero for first time since 2016.
10.17am GMT
Markets across Europe are a sea of red after those weaker-than-expected PMI surveys served as a stark reminder of the challenges facing the eurozone economy:
10.11am GMT
Factory output also fell in March, with the manufacturing PMI headline index at a three-month low of 49.8 - down from 51.5 in February.
Eliot Kerr, Economist at IHS Markit, said there were some worrying signs in the data:
At the end of the first quarter, the French private sector was unable to continue the recovery seen in February, as both the manufacturing and service sectors registered contractions in business activity.
Worryingly, new orders continued to tumble amid a slowdown in demand and downward momentum in new export business. New work from abroad fell at the fastest pace for nearly three years, with a broad- based decline across both sectors.
10.03am GMT
A breakdown of the eurozone PMI surveys showed a worrying picture for manufacturing in its two largest economies, Germany and France.
Factory activity fell at the fastest rate in six-and-a-half years in Germany, with the manufacturing PMI falling to 44.7 in March from 47.6 in February
The downturn in Germany's manufacturing sector has become more entrenched, with March's flash data showing accelerated declines in output, new orders and exports.
Uncertainty towards Brexit and US-China trade relations, a slowdown in the car industry and generally softer global demand all continue to weigh heavily on the performance of the manufacturing sector, which is now registering the steepest rate of contraction since 2012.
9.48am GMT
The disappointing eurozone PMIs give little hope of eurozone growth in the fourth quarter, according to Bert Colijn, a senior economist at the Dutch bank ING.
He says:
Today's PMI indicates that GDP growth is unlikely to have bounced back in the first quarter.
The PMI further shows that manufacturing output has been declining, which means that growth continues to be based on service sector developments.
9.19am GMT
The "flash" eurozone PMI surveys for March are a bit of shocker, indicating an sharper than expected slowdown in growth after factory output shrank at the fastest rate in six years.
Here are the headline figures from the IHS Markit survey (anything below 50 signals contraction:
The eurozone economy ended the first quarter on a soft note, with the flash PMI running at one of the lowest levels seen since 2014.
The survey indicates that GDP likely rose by a modest 0.2% in the opening quarter, with a decline in manufacturing output in the region of 0.5% being offset by an expansion of service sector output of approximately 0.3%.
9.00am GMT
Easyjet says it its preparing to make the ownership changes that will be required after Brexit.
The board continues to stand ready to activate the contingency plan of suspending shareholders' voting rights in respect of a small number of shares on a last in first out basis, in accordance with existing provisions of our articles of association.
8.50am GMT
European markets are mainly up this morning after a strong trading session on Wall Street on Thursday which saw the Dow Jones close up 0.8% and the S&P 500 rise 1.1%.
Neil Wilson, analyst at Markets.com, gives his take:
European stocks were broadly firmer on Friday morning, with the outlier the FTSE 100, which has softened a touch as some of the large weightings have slipped.
US stocks were also a lot firmer yesterday, with the S&P 500 rising over 1% to 2,854.88 on the close. The Dow rallied to 25,96251.
8.39am GMT
The FTSE 100 is down in early trading, weighed down partly by a stronger pound.
Here are the scores so far across European markets:
8.26am GMT
Analysts at Goldman Sachs say the chances of a no-deal Brexit have actually increased rather than diminished.
They write:
By postponing Brexit day by at least a fortnight, the UK and the EU have kept all options in play, for now.
8.09am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The pound has tended to be the Brexit barometer as far as investor sentiment goes, with sterling reacting to the ups and downs of the negotiations.
EU27 responds to UK requests in a positive spirit and:
agrees to Art. 50 extension until 22 May if Withdrawal Agreement approved next week
if not agreed next week then extension until 12 April
approves 'Strasbourg Agreement'
continues no-deal preparations