The FTSE 100 (^FTSE) and European stocks made muted moves higher on Tuesday morning, lacking direction as traders look to tomorrow’s UK’s autumn budget with trepidation.
The pound’s performance and UK gilts have the potential for volatility today and later in the week. Sterling was up slightly against the dollar (GBPUSD=X) in early trade, rising about 0.1% above the $1.31 mark.
UK bondholders are currently sitting on healthy returns for the year, but could face a selloff come Wednesday if market jitters take hold like they did for Rachel Reeves’ first budget as chancellor last year, and for the infamous mini-budget delivered by Liz Truss in 2022.
Ahead of her budget speech, Reeves told MPs that tax rises would be kept to a minimum and that the budget will prioritise cutting the cost of living, cutting NHS waiting lists and cutting the cost of debt, according to a report in The Guardian.
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London’s premier index rose 0.2% in early trade, led higher by B&Q owner Kingfisher (KGF.L) following its latest financial report
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The DAX (^GDAXI) in Germany rose 0.1% as selling pressure eased slightly on its big cap defence stocks
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France’s CAC 40 (^FCHI) gained 0.4%
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The pan-European STOXX 600 (^STOXX) ticked up 0.3%
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