Money talks

Today's news headlines: 

‘Sunak to commit to fiscal discipline in Budget’. Chancellor Rishi Sunak is expected to steer fiscal spending towards public services and address rising energy prices contributing to the cost of living crisis in today’s budget. The UK economy is forecast to have weathered the Covid storm better than expected with scarring not as deep as first thought, allowing some breathing room for spending. The National Living Wage increase to £9.50 per hour as well as the public sector pay freeze will all be welcome news to NHS workers, but runaway inflation and national insurance hikes next year will all but wash away any considerable rise in income. (Financial Times)

‘Democrats announce plan for minimum tax on biggest US corporations’. The Biden administration has laid out its proposal to ‘Build Back Better’, including plans for 200 of America’s biggest companies, who pay at least $1bn of profits to shareholders, to pay 15% in tax. This will reportedly close tax loopholes and generate $300-$400bn in tax revenue over 10 years. The move comes as companies like Amazon, who reported $45bn over the last three years, paid an effective tax rate of just 4.3%. The Billionaire Tax is also being considered as an avenue to generate greater social spending. (Financial Times)


Today

US indices closed little changed yesterday, with the S&P 500 gaining 0.18% as Facebook revenue and monthly active users fell short of expectations and pushed the stock 4.00% lower. In the UK, the FTSE 100 has opened flat ahead of the budget release today. EUR/USD continues to flirt with the $1.1600 level, failing to gain any direction. Meanwhile, GBP/EUR has taken a pause in its recent rally at €1.1860.

Events

UK British Retail Consortium Shop Price Index y/y: -0.4% vs -0.5% last month
Australia Consumer Price Index q/q: 0.8% vs 0.8% previously
German Gfk Consumer Climate: 0.9 vs 0.4 last month
Credit Suisse Economic Expectations: 9:00AM
UK Annual Budget Release: 12:30PM
US Core Durable Goods Orders m/m: 1:30PM
Bank of Canada Monetary Policy Report: 3:00PM
US Crude Oil Inventories: 3:30PM


Interbank rates:

GBP/USD – 1.3766
GBP/EUR – 1.1856
EUR/USD – 1.1611
USD/CAD – 1.2387

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.