US politics continued to dominate market action yesterday as President Donald Trump’s budget caused controversy throughout the globe. Trump’s proposed budget is set to boost defence spending and to cut funding to federal agencies, including the Environmental Protection Agency. The rumours come from a person familiar with the plan. The President is scheduled to address a joint session of Congress today. Trump experienced another setback over the weekend after the Secretary of the Navy withdrew from his position.
Sterling declined over the weekend after reports in The Times papers said that UK Prime Minister Theresa May’s team is preparing for the possibility that Scotland calls a second independence referendum. The Sunday paper suggested that May could agree to a new Scottish vote, but on the condition it is held after the UK leaves the EU. Keeping with Brexit related news, the bill to allow May to trigger the start of the UK’s exit negotiations is set to be reviewed by the House of Lords this week.
The second month of the year ends with attention focused on the US. The United States second reading of Q4’s economic growth is expected to show a slight upward revision to 2.1%. If a positive revision is posted this could spur investment into the Greenback. Later in the afternoon, an insight into the all-important Consumer Confidence is released from the States. Confidence is anticipated to remain in line with last month’s reading.