The US dollar was the biggest mover in a session dominated by the UK chancellor’s set piece. The greenback strengthened against both the euro and pound before falling back near where it began the day in overnight trading. Yesterday showed how unpredictable currency markets can be, so why wait – call your trader today.
All eyes were on UK chancellor Jeremy Hunt yesterday afternoon, with the House of Commons assembled for the autumn statement. Speculation that Hunt would find room for tax cuts turned out to be correct, although there was no mention of changes to inheritance or income tax.
In the headline moves, national insurance contributions were slashed from 12% to 10% for over 25mn employees and nixed altogether for sole traders. There were substantial cuts to business rates too, as part of a rather bloated 110 measures to boost growth.
Sterling shed some value against the US dollar and euro shortly after the speech, but largely held on to the gains it made earlier in the week.
The US dollar began the day strong on the back of an intriguing double release of data. Durable goods orders came in much lower than expected, dropping from 4% to -5.4% in October. That was in contrast to initial jobless claims – seen as a proxy for the country’s wider labour market – undershooting expectations, at 209k versus 233k the week before. The greenback gained as the market became less convinced that the Fed had reached the end of its hiking cycle.
Amid all the hubbub, the eurozone was much more sedate. News of this morning’s PMI improvement in German manufacturing will be warmly received, but more evidence is required to definitively state that the economy has turned a corner.
The European Central Bank (ECB) warned that it was starting to see the first signs of stress among banks in member nations as default rates ticked up. The banking system remained well placed to deal with any deterioration to asset quality, it said.
Geert Wilders’ Party for Freedom (PVV) is on course to be the largest party in parliament after a stunning victory in the Dutch elections. Wilders is a controversial figure in European politics, although he still may struggle to form an alliance with another party that would give him a functioning majority.
UK energy regulator Ofgem has said this morning that the household energy cap will rise by 5% in the new year, due to rising prices for wholesale gas and electricity.
Just days before black Friday, workers at American department store Macy’s Washington locations have announced a strike to call for improved working conditions. The strike follows two consecutive years in which the retail giant has made profits of over $1bn.
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