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I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!
Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>
You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.
You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.
Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>
Yours 'Forexly',
Cliff
Simon Denham's Daily Market Comment
With
the focus in the UK being on the Chancellor today an eye will also be
kept on the gilt market to see how bond traders receive his annual
budget. The leaks suggest that in an attempt to appease to his
coalition partners he is going to raise the lower tax rate band and pay
for it by cutting down on tax avoidance and introducing a mansion tax.
The move to raise the level at which tax is first paid on income is a
costly move and has to be paid for somehow which in some part will come
from a new tax of expensive homes, but the Chancellor also has a little
wriggle room in that he is ahead of his deficit reduction targets.
These are the headline grabbing measures that are due to try and cover
up a reduction in the 50p tax rate next year. The plan to introduce this
in a year’s time rather than right now is simply going to make many of
these top earners defer their income into next year so they pay the
lower rate then. So if he wants the cash now then he’d be better off
cutting the rate now and at the same time sending that message to
business leaders and enterprise that the UK will reward success.
On
the other hand there are arguably more important measures that don’t
tend to get the headlines as they aren’t the vote winners/losers.
Corporation tax, which the Chancellor announced reductions of a year ago
could once again be reduced in an effort to attract businesses and
encourage start ups.
All
these measures cost money and so we can also expect some more spending
cuts to be thrown in. As mentioned the bond markets will be the ones to
watch to see whether traders believe the Chancellor can afford these
things and keep on track with his deficit reduction plans. At least
there’ll be one other bit of bright news in the form of an upgrade to
growth forecasts from the Office of Budget Responsibility, a whopping
revision upwards from 0.7% to 0.8% for the year.
The
FTSE has opened flat this morning following yesterday’s little sell off
and at the time of writing it's hovering around the 5900 mark.
Yesterday’s sell off so far looks once again to be a buying opportunity
for the bulls but with the index continuing to fail around the mid 5900s
and yet to break through 6000 the bias looks to be in favour of
resistance levels. On the one hand investors have to consider the fact
that now even mining stocks are voicing their concern about the Chinese
economy, but on the other the US is still showing signs of a recovering
economy that could be sustainable. These two counteracting factors are
causing the indices to go sideways.
Whilst
all eyes will be on today’s budget, this morning we do get the release
of the Bank of England minutes as well as Public Sector Net Borrowing.
PSNB which fell last month as annual tax receipts came in more than
expected is due to show a rise today as government spending is due to
ramp up ahead of the end of the tax year. For the BOE minutes which
showed a widening split in the MPC last time round with a 7-2 vote it
will be interesting to see whether that dove-hawk split has got wider.
Then later we get existing home sales from the US which is expected to
continue higher in a similar fashion to how it has been so far this
year.
The
bounce in risk assets this morning is assisting the euro which is
higher so far in today’s session. EUR/USD is at 1.3255 at the time of
writing having been a little higher already. The recent little uptrend
just seems to have come up against resistance around 1.3290 which is
where the pair failed earlier in the month. There was concern earlier
in the week about rising Portuguese bond yields, but yesterday those
concerns were out to rest as the yields fell back.
Gold
still hasn’t seemed to get back into rally mode even though a little
dollar weakness has set in recently. At 1653 this morning the yellow
brick just can’t seem to attract the buyer back following its sharp
falls and as it continues to hover below its 200 day moving average a
seed of doubt about the longer term upward trend might growing in the
mind of the bulls.
