An action-packed trading day with events unfolding from all angles, every major player is letting themselves known with some sort of impact on the global markets. The Euro is swaying back near unwanted levels with current trade at 3914.
We saw a little bit of action overnight the Nikkei is really starting to look sorry, massively underperforming against US stocks, Abe looks to be the Captain of a sinking ship. USDCNY is not under control despite what the PBOC want and copper had a tough session after catching a bid in the US session.
Update: UK jobless claims fall more than expected – GBP/USD sells the fact
The anticipated UK budget today, George Osbourne needs to be careful of how he comes across in his penultimate budget before the next general election. The UK has the strongest growth in the developed world yet Joe Public isn’t feeling it, austerity and food banks are front and centre of people’s attention.
Reduction in the top tax rate cuts in public spending though applauded in certain circles it’s not filtered down. In real terms wages are decreasing and the elephant in the room is house prices. Dispute massive corporate tax evasion from global names the time is right for a corporate tax cut. Perhaps the idea is to meet them in the middle? The event though tends to have little effect on the market, usually enough of the content has been leaked and Osborne will not want to rock the boat.
I expect GBP to comer off and would fade any move higher, last year GBPUSD rose 0.8% so we a talking about small moves here. FSTE had a 0.7% move over the last budget so don’t expect fireworks.
We are looking forward to the FOMC as there’s a lot more of the unknown coming out of the FED, they have also got to be keeping one eye on the Chinese credit crisis that is definitely not going away anytime soon.
Alex Chehade, Senior Dealer
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