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European stock futures rise; UK to offer forward tax / spending plans

European stock futures rise;  UK to offer forward tax / spending plans

Written by Peter Norse

Investing.com – European stock markets are expected to open slightly higher on Monday, aided by the British government’s plans to boost confidence in its fiscal policies after weeks of turmoil.

At 02:00 ET (06:00 GMT), the contract in Germany was up 0.7%, in France it was up 0.2%, and the UK contract was up 0.4%.

Britain’s new finance minister will announce tax and spending measures later on Monday, two weeks earlier than previously scheduled, following the original economic plan put forward by Prime Minister Liz Truss and former chancellor Kwasi Quarting in struggling financial markets.

Sentiment was boosted by reports that the UK government is preparing to make a big turn in planned tax cuts, but this will need to materialize into concrete plans to avoid renewed bond selling.

British government bonds will resume trading on Monday without the support of the Bank of England’s emergency bond purchase program, which expired on Friday.

However, any gains in the stock market are likely to be limited as investors continue to survey the deteriorating economic outlook, as well as continued tightening of monetary policies around the world.

Last week, a hotter-than-expected reading largely boosted expectations for a Fed rate hike this year, and China’s third quarter, scheduled for Tuesday, is expected to show the slowest annual growth rate in nearly 50 years.

Back in Europe, the slate of economic data is largely empty, but is expected to remain high in September, reaching 8.9% over the course of the year.

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This will increase the pressure to continue raising interest rates. European Central Bank policymakers Luis de Guindos and Philip Lane are scheduled to speak at various events on Monday, and their comments will be studied for clues to future moves.

In corporate news, the banking sector will likely be in focus Monday for any potential reading after The Wall Street Journal reported that Goldman Sachs (NYSE:) will combine its investment and commercial banking businesses into one unit as part of an overhaul.

Oil prices rose on Monday, supported by slight selling and hopes of improving demand from China, the world’s largest importer of crude.

President Xi Jinping said on Sunday that Beijing would ramp up spending and stimulus to help support economic growth, which could boost crude imports that have been hit by slowing activity as a result of the coronavirus unrest.

By 02:00 ET, futures were up 0.7% at $85.28 a barrel, while the contract was up 0.8% at $92.38.

In addition, it rose 0.6% to $1,658.60 an ounce, while it was trading 0.3% higher at 0.9752.

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