OPEC+ extends cuts, while markets await ECB, NFP and UK budget this week

Posted by Joshua Mahony -
Scope Markets
  • FTSE 100 lags as traders look ahead to the UK budget
  • ECB and payrolls due this week
  • Oil prices in focus after OPEC+ extend output cuts

A mixed start for European indices has seen the FTSE 100 lag behind its mainland European counterparts as we await this week’s all-important Spring Budget from the Chancellor. Promises of tax cuts from Jeremy Hunt had helped lift expectations of a pro-growth stance that would help provide the fiscal basis for a year that should also bring a monetary push to lift the UK economy from its slumber. However, warnings from the IFS and IMF highlight concerns that the Chancellors efforts to win over votes ahead of the election could come at the expense of the perceived fiscal stability of the UK. 

Today marks a relatively slow start to a busy week, with traders gearing up for a four-day period that will bring monetary policy and US jobs to the fore. While this morning’s twelve-month high for Swiss inflation (0.6%) highlights the European trend of higher price growth in February, traders are awaiting a potential shift in tone from the ECB as they prepare to cut rates in the coming months. Elsewhere, underlying concerns around the US jobs market come back into focus on Friday, with the ramp-up in payrolls over recent months being almost entirely driven by those taking up second jobs. With markets expecting to see a decline the NFP reading on Friday, traders will be watching closely for another potential decline in the full-time job creation figure.

Oil prices remain well bid in early trade this morning, following a weekend decision from OPEC+ members to extend their production cuts to mid-year in a bid to avert a global surplus and shore up prices. The three-month extension comes as previous plans to restrict output were due to come to an end this month, with this extension of the agreement pushing that date back to June at the earliest. For the likes of Saudi Arabia, these efforts to support prices comes at a cost, with rampant US output seeing them grab market share whilst enjoying the benefits of OPEC actions.

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