Market Brief: Budget day!
11 Sep 2018
Theresa May’s crisis-hit government is looking to today's Budget as a shot at redemption to find fresh popularity with voters.
Today's data releases |
Key levels | |||
---|---|---|---|---|
12:30 | UK Autumn Budget | Support | Resistance | |
13:30 | US initial jobless claims, durable good orders | GBP/USD | 1.3057 | 1.3338 |
15:00 | University of Michigan sentiment | GBP/EUR | 1.1071 | 1.1352 |
19:00 | Fed meeting minutes released |
Market overview
Theresa May's Chancellor, Phillip Hammond, will deliver his second Budget after the customary Prime Minister’s questions. It is rare for any Chancellor not to have to conduct a juggling performance to satisfy competing claims for resources. But the balancing act seems exceptionally acute this year and the febrile political atmosphere is making things worse. The expectation is for Mr Hammond to stick to his fiscal rules – he recently chose “fiscal” as the most appropriate word to describe himself in an interview! His main aim is to protect the UK’s finances from any shock from Brexit in the near term and to boost the sluggish growth rate however he is contending with huge pressure internally to deliver a Budget to try and create a turn of fortune for the Conservatives. This has been made even more difficult by multiple factors: the likelihood that a worsening growth outlook is set to be published today; a tiny Commons majority and the willingness of certain Tory MPs to use any mistake to try and oust him.
On the Brexit front, there is some light at the end of the divorce deal tunnel as reports out this morning suggest that Britain and the EU are targeting a separation agreement within three weeks. EU sources have expressed the view that there is a better than even chance that at the 14/15 December EU Summit, an agreement that talks can move on to the next phase will be in place. The week of 4 December is considered to be the time when such a breakthrough is reached. Were this to happen, both sides would be able to progress to discussing trade arrangements.
Robert Mugabe has resigned as president of Zimbabwe, finally bowing to pressure and ending his 37-year rule. The Zimbabwean Parliament had only just begun impeachment hearings when the speaker made an announcement that he had received a resignation letter from the president. Within minutes there were celebrations on the streets of Harare with horns blaring as people poured out to celebrate Mugabe’s fall from power. It is likely that Emmerson Mnangagwa, the vice president whose sacking triggered the military action, will take over leadership of the country.
On the Brexit front, there is some light at the end of the divorce deal tunnel as reports out this morning suggest that Britain and the EU are targeting a separation agreement within three weeks. EU sources have expressed the view that there is a better than even chance that at the 14/15 December EU Summit, an agreement that talks can move on to the next phase will be in place. The week of 4 December is considered to be the time when such a breakthrough is reached. Were this to happen, both sides would be able to progress to discussing trade arrangements.
Robert Mugabe has resigned as president of Zimbabwe, finally bowing to pressure and ending his 37-year rule. The Zimbabwean Parliament had only just begun impeachment hearings when the speaker made an announcement that he had received a resignation letter from the president. Within minutes there were celebrations on the streets of Harare with horns blaring as people poured out to celebrate Mugabe’s fall from power. It is likely that Emmerson Mnangagwa, the vice president whose sacking triggered the military action, will take over leadership of the country.