UK and European markets search for direction

UK and European investors are twiddling their thumbs today, and what little risk appetite there is has ebbed away this afternoon, says Chris Beauchamp, chief market analyst at online trading platform IG.

European markets drift sideways

“Earlier gains for European indices have been chipped away this afternoon, as concerns about interest rates and the ongoing Ukraine conflict sapped risk appetite. The past month has seen a dramatic repricing of expectations around interest rates. Previously, markets had seen cautiously optimistic that the end of the surge to tighten rates was upon us. Stronger data from various quarters has reversed that view entirely.”

Biden’s visit to Kyiv highlights ongoing conflict

“As if this renewed hawkish view wasn’t enough, President Biden’s unexpected visit to Kyiv reminds us that the standoff between Russia and the West over Ukraine is likely to be a semi-permanent feature. And any hope of some positive news in the talks between the UK and Europe over changes to the Protocol have been dashed, as a brewing Tory rebellion threatens to undermine Sunak’s leadership."