European stocks rise; UK outperforms ahead of financial update

European stocks rise;  UK outperforms ahead of financial update

Written by Peter Norse – European stock markets rose on Monday, with the United Kingdom outperforming, following the news that the new chancellor will present the announcement of his financial plans to boost market confidence after weeks of turmoil.

By 03:40 EST (07:40 GMT), trading in Germany was up 0.1%, in France it was up 0.1%, and the UK was up by 0.3%.

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 weekend reports that the UK government is preparing to take a big turn in planned tax cuts, with yields on UK government bonds falling sharply even without the support of the Bank of England’s emergency bond purchase programme, which ended Friday.

However, investors remain concerned about the deteriorating economic outlook, as well as the 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.

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

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In corporate news, ASOS (LON:) stock fell more than 11% after the British online fashion retailer confirmed over the weekend a report that it was in negotiations with its lenders over changing the terms of its 350 million pound ($394 million) borrowing facility. .

Credit Suisse (SIX:) SIX stock rose 0.9% after a Swiss lender agreed to pay $495 million to settle claims related to the bank’s pre-2008 mortgage-backed securities business, the latest payment related to previous blunders that damaged the Swiss bank’s reputation.

Oil prices rose on Monday, boosted by a slight sell-off in the dollar 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 03:45 ET, futures were up 1.1% at $85.58 a barrel, while the contract was up 1.1% at $92.67.

In addition, it rose 0.7% to $1,659.70 an ounce, while trading up 0.4% at 0.9754.

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