Joshua Mahony MSTA
Scope Markets
Yesterday’s record highs in the US has helped engender positive sentiment throughout Asia and Europe, as the focus now turns towards the UK for its Autumn Budget.
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European markets follow US lead
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Will Hammond bow to Labour pressure?
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Markets to focus on OBR forecasts
European markets are picking up where they left off, with the likes of the FTSE 100 pushing higher in the wake of record highs across the US markets. With the S&P 500, and Nasdaq reaching new highs, there is a clear optimism for investors who widely expect to see a swathe of tax reforms take hold before year end.
The gradual grind higher for sterling has come amid a growing feeling of optimism over today’s budget, with the rise of the anti-austerity Labour party likely to push Phillip Hammond into a more loose strategy. Should we see Hammond bow to Labour’s pro-spending approach, this wouldn’t be the first time the Conservatives have gone off course in a bid to win back votes, with the EU referendum only occurring thanks to their fear over UKIP’s growing popularity. With the young vote appearing to largely favour Labour, today’s Budget is widely expected to offer a picture of hope for first-time buyers. However, markets will play close attention to the latest OBR growth and inflation forecasts, with
such figures providing a key driver of BoE policy going forward.
Ahead of the open we expect the Dow Jones to open 11 points higher, at 23,602.
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