The energy crisis, UK tax plans, and Credit Suisse are in the spotlight.
Predicts that Monday’s opening of European stock markets will be a mix of good and bad news. This is because investors are still worried about energy prices in the region, the political situation in the U.K., and the health of Swiss banking giant Credit Suisse.
At 02:00 ET (06:00 GMT), the DAX futures contract in Germany was down 0.2%, the CAC 40 futures contract in France was up 0.3%, and the FTSE 100 futures contract in the U.K. was down 0.1%. rose 0.3%.
Russian energy giant Gazprom (MCX: GAZP) stopped sending gas to Italy over the weekend. This seems to be the latest round of a dispute between Moscow and Western Europe over the supply of natural gas that has been going on since Russia invaded Ukraine in February.
Gazprom said it didn’t get permission for the pipeline to flow through Austria, and the Italian oil and gas company Eni (BIT: ENI) said it expected the gas flow to stop until Monday.
On Friday, the energy ministers of the European Union announced plans to tax energy companies’ “windfall profits.” EU leaders will meet at the end of the week to talk about how to help Ukraine more and what they can do together to stop energy prices from going up even more.
In other places, the political chaos in the U.K. continues.
Prime Minister Liz Truss tried to defend her government’s plan to cut taxes by a lot, including getting rid of the highest income tax rate, even though it has caused a lot of trouble on the market.
But a plan without money is unlikely to get through Parliament, and many people think she will have to change her mind, especially about the top tax bracket.
In business news, the Financial Times said on Sunday that executives from Credit Suisse (SIX: CSGN) spent the weekend reassuring investors about the company’s financial health. This happened because the bank’s credit default swaps, which protect against a company going bankrupt, went up sharply on Friday and reached their highest level in at least 10 years.
The latest German Manufacturing PMI number, which will be released on Monday, is expected to show that this important part of the Eurozone’s economy shrank even more in September.
On Monday, oil prices went up because people think that a group of top oil producers will agree to a big cut in production to help a market that has lost money for four months in a row.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are going to meet on Wednesday. According to Reuters, the members are thinking about cutting production by more than a million barrels a day.
This would be the biggest cut since the pandemic, and it would come after the 100,000 barrels per day cut that happened last month.
By 2:00 ET, U.S. crude futures had gone up 2.8% to $81.75, and the Brent contract had gone up 2.7% to $87.47.
Also, gold futures went up 0.2% to $1,675.20/oz and EUR/USD went up 0.3% to 0.9832.