By Bryan McCormick
UK trading is weak this morning after the Cameron government announced a plan to introduce austerity measures and to increase taxes, making for the tightest financial conditions in more than a generation. The FTSE is trading down more than 1.5 percent as a result.
US stock index futures are trading lower along with the losses in Europe, reversing earlier gains overnight. Germany, the relatively strongest market, was off more than 0.6 percent but benefited from an improved Ifo business confidence survey on confidence in future export strength.
In currencies, the dollar continued to gain strength against the euro and the UK pound. This has helped pare gains in commodities, with energy and industrial metals both down notably. Banking, energy, and resource stocks may be weaker as a result, at least at the outset.
Asian markets were mixed overnight, with Japan weak after an announcement of a proposed tax increase and China mainland markets posting moderate gains.
Disclosure: No positions