European stock futures marginally higher

The DAX futures contract in Germany traded 0.7% higher, CAC 40 futures in France climbed 0.2%, and the FTSE 100 futures contract in the U.K. rose 0.4%

European stock markets are expected to open marginally higher Monday, helped by plans by the U.K. government to shore up confidence in its fiscal policies after weeks of turmoil.

At 06:00 GMT, the DAX futures contract in Germany traded 0.7% higher, CAC 40 futures in France climbed 0.2%, and the FTSE 100 futures contract in the U.K. rose 0.4%.

New British finance minister Jeremy Hunt will announce tax and spending measures later Monday, two weeks earlier than previously scheduled, after the original economic plan put forward by Prime Minister Liz Truss and former Chancellor Kwasi Kwarteng roiled financial markets.

Sentiment has been boosted by reports that the U.K. government is preparing to do a major U-turn on planned tax cuts, but this will need to materialize into concrete plans to avoid a renewed selloff in bonds.

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

That said, any stock market gains are likely to be limited as investors continue to survey the deteriorating economic outlook, as well as a continuation of tightening monetary policies around the world.

Last week, a hotter-than-expected U.S. inflation reading largely cemented expectations for further Federal Reserve rate hikes this year, and third quarter GDP data from China, due on Tuesday, is expected to show the slowest annual rate of growth in nearly 50 years.

In Europe, the economic data slate is largely empty, but Italian consumer prices are expected to remain elevated in September, climbing 8.9% on the year.

This will add to the pressure on the European Central Bank to continue hiking interest rates. ECB policymakers Luis de Guindos and Philip Lane are set to speak at different events Monday, and their comments will be studied for clues of future moves.