09/03/2017 - Market Takes UK Budget in it's Stride

GBP

Britain's 2017 budget gave little support yesterday to the UK stock market and the Pound, suffering from nerves over its plans to leave the European Union and the fallout for increasingly hard-pressed consumers.

While Chancellor Philip Hammond announced a rise in official growth forecasts for this year and cut predicted rates of public debt from November estimates, it was not enough to turn either the pound or the FTSE index positive yesterday.

Strong consumer spending made Britain the second-fastest growing economy among the G7 nations in 2016 and Hammond raised his forecast for growth this year to 2.0 percent from the 1.4 percent predicted last November. Nevertheless, markets are more concerned by signs that the 20 percent fall in the pound and worries over what is to come as Brexit talks get under way this month are finally having an impact on UK household spending

USD

The dollar rose to its highest level in five days, just below a two-month peak on Wednesday as data on U.S. private sector payrolls rose more than expected for February, increasing investor expectations of an increase to interest rates by the Federal Reserve later this month.

U.S. private employers added 298,000 jobs last month, well above the gain of 190,000 predicted by economists. That pushed the dollar index to its highest level since March 3, as a rate hike is all but priced in.
 

Key Announcements

12:45 – EUR : Minimum Bid Rate; not expected to change from 0%

13:30 – EUR : ECB Press Conference

13:30 – USD : Unemployment Claims; forecast at 239k against a previous of 223k