Global markets recover as focus shift to Fed decision

london — Global stock markets recovered their poise Tuesday after a lackluster session in Asia as investors digested the latest bout of Brexit uncertainty and prepared for a key US Federal Reserve meeting.

In Europe, France’s CAC 40 rose 0.5 per cent to 5,440, while Germany’s DAX climbed 1 per cent to 11,777. Britain’s FTSE 100 gained almost 0.7 per cent to 7,347. US shares were set for gains with Dow futures and the broader S&P 500 futures both up 0.4 per cent.

Much of the focus in Europe remains on Britain as the country’s scheduled departure from the European Union looms. With just ten days to go until Brexit, the country has yet to agree on how it will leave and Prime Minister Theresa May is expected later this week to seek an extension to the departure date from March 29.

The latest Brexit bombshell occurred Monday when the speaker of the House of Commons ruled that May cannot keep asking lawmakers to vote on the same divorce deal that they have already rejected twice.

On Thursday, EU leaders will meet and discuss if they will grant

an extension of the March 29 deadline for the UK to leave the bloc. The consensus in the markets is that they will but there may strings attached.

“Depending on your point of view, either the UK is locked in some kind of limbo tied to the EU, which is the ‘Remainers’ preferred scenario, or as an unintended consequence the U.K. leaves the EU without a deal quite soon, the Brexiteers preferred scenario, something which is not being priced in by financial markets at the moment,” said Neil MacKinnon, economist at VTB Capital. Despite the Brexit uncertainty weighing on the British economy, the country continues to post sizeable declines in unemployment.

The Office for National Statistics said employment in Britain rose by 222,000 in the three months to January, compared to the previous quarter. That took the employment rate up to a record 76.1 per cent and the country’s unemployment rate declined to 3.9 per cent. That’s the first time it has fallen below 4 per cent since early 1975. -