GBP quiet ahead of the autumn statement
A quiet week thus far largely anticipating today’s Autumn economic statement from the chancellor. Jeremy Hunt is widely expected to announce over 100 measures designed to try and ‘turbocharge’ Britain’s stagnant economy and see the much-desired growth.
The Autumn statement is also widely expected to include a raft of tax cuts, in a bow from the government to the desires of Tory backbenchers. After repeatedly stating over recent months that the poor state of public finance rules out any tax cuts in this statement, the Chancellor has been given some headroom by forecasts from the OBR that were less gloomy than feared.
Gaza ceasefire provides hope for the future
Market reaction to the Statement will look at the details. As with the disastrous Truss/Kwarteng mini-budget last year, anything unexpected or uncosted will cause ripples of concern in the market.
Internationally, it was announced overnight that Israel and Hamas have announced a 4-day ceasefire, the first major pause since the conflict began last month. The much-needed pause will see 50 Israeli hostages held by Hamas released, in turn for a pause in hostilities and provide precious time to allow humanitarian aid to flow into Gaza.
The market reaction sees this as some hope that the conflict will edge away from escalation and expansion that would see a flight to safe-haven currencies like the dollar.
ECB Financial Stability review due today
Back to fiscal matters, the ECB will release their Financial Stability review today. The central bank’s assessment of conditions in the financial system can provide insight into the future of monetary policy, although they are not expected to provide any shocks.
In the US, we have the release of this month’s Unemployment Claim figures, the usual snapshot on the state of the US labour market, a result worse than the forecast figure is likely to be detrimental to the Dollar.
Looking towards the end of the week
The Week rounds off tomorrow and Friday with the release of PMI data for the Eurozone, UK and US. These figures give real indications into whether growth can be seen in an economy and all 3 major markets will be hoping to find green shoots.