Before the Bell: Sunak s Budget aims to boost GDP, the pain comes later
Although yesterday’s UK Budget was generally well received in the international markets, with the fiscal taps to be left fully open until December, the British Pound did rally.
With the major decisions pre-announced earlier this week, a big equity market reaction to the Budget speech was unlikely anyway.
In addition to the extension of Covid-19 specific support, the Chancellor is aiming to promote investment in the near-term, specifically via the 130 per cent ‘super deduction’ tax incentive.
Faster GDP growth will generate higher tax receipts, but additional revenue raising measures will be necessary eventually, commented Ian Williams, economics & strategy research analyst at Peel Hunt.
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forecasts
Price of Gold Fundamental Daily Forecast – Powell Comments Likely to Trigger Volatile ResponseGold investors are anxious to see if Powell expresses concern about a recent volatile sell-off in Treasuries and his assessment of the economy.
Mar 04, 2021 09:36 AM GMT
Gold futures are trading lower on Thursday but slightly better than a nine-month low reached the previous session. However, rising U.S. Treasury yields continue to spook buyers of the non-yielding commodity.
The relatively low volatility this week suggests traders may be trying to build a support base at the lower end of a long-term retracement zone, but another lower-low in the chart pattern suggests sellers are still a dominant force. Prices are likely to continue lower until the buying is strong enough to take out one or a number of its current string of lower tops.