Obama stands his ground
Just into his second term, it appears the Barack Obama will lead the US with more steel this time around. Standing up to the Republican House Speaker John Boehner, the president insisted that top earners must take a tax increase as the opposite parties fight to secure a deal to avoid the fiscal cliff.
Boehner wants to cut Obama’s social spending on schemes such as Medicare, whilst avoiding Obama’s prioritised tax increases. A compromise, that is both sufficient but not excessive, must be found between the two parties must be found before the New Year to prevent the US and the global economy being dragged into recession.
Such is the paramount importance of a solution, investors have supreme confidence that congress will pull together. Resultantly the dollar has consistently weakened to one-month lows and may continue to, until a deal is reached. Conversely, benefitting from the risk appetite, the euro has strengthened to a six week high.
Today Chancellor of the Exchequer George Osborne delivers his Autumn Forecast Statement. Addressing the UK’s growth and budget prospects, Osborne is expected to issue downgrades to both previous forecasts. This could promote further charges from the euro whilst cushioning the dollar’s fall slightly.
Key Announcements Today:
- 08.15am – EUR – Spanish Services PMI: 42.4
- 08.45am – EUR – Italian Services PMI: 44.6
- 09.00am – EUR – Final Services PMI: slight increase to 46.7
- 09.30am – GBP – Services PMI: expected to increase to 51.1 from 50.6
- 10.00am – EUR – Retail Sales m/m: expected contraction to -0.1%
- Tentative – EUR – Spanish 10y Bond Auction
- 12.30pm – GBP – Autumn Forecast Statement
- 13.15pm – USD – ADP Non-Farm Employment Change: expected to decrease to 129k
- 15.00pm – USD – ISM Non-Manufacturing PMI: expected at 53.6
- 15.00pm – USD – Factory Orders m/m: expected to decrease, flat at 0.0%
See previous Daily Market Reports