Budget and Fed Day
Today should be an interesting day for the markets as the UK and US hog the headlines.
This morning it is the UK’s stage as minutes from March’s Monetary Policy Committee (MPC) meeting are published. Of course, interest rates remained at the record low of 0.5%, but we shall see the voting pattern which is expected to have been unanimous. This is despite the strong growth in the UK. We will also get unemployment rate and claimant count change data for February.
After this, it is Chancellor George Osborne’s turn as he delivers his final budget before the General Election on the 7th May. With falling oil prices dragging down inflation and helping increase disposable income, the backdrop of a rosier economy should allow Chancellor Osborne to try to highlight how the recovery is being felt by everyone. He will, most likely, try to use this to give the Conservatives some momentum in the polls. Nowadays, there always appears to be a couple of leaks before the announcement and these have centred on the scrapping of the annual paper tax return, increasing personal tax allowance and a rise in the levels for inheritance tax.
It is a similarly important day in the US as the two day Fed meeting draws to a close and we get to see whether a new direction is being set for the US economic policy.The US economy is growing at an impressive rate with the last Non Farm payrolls data beating expectations and unemployment down to the lowest level since 2008. Now it just remains to be seen if the patience pledge is removed which will pave the way for the beginning of interest rate hikes in June.
Prepare for volatility in the markets today!
MPC minutes are due at 0930, the budget kicks off at 1330 and the US rate decision, monetary policy statement and press conference start from 1800.