Happy Budget Day to those in the UK! This is a historic occasion: in the 800 years since the role of Chancellor of the Exchequer was established, this is the first time a female Chancellor will present the budget. The event takes place at 12:30, and, as is typical, every aspect has been leaked. Rachel Reeves is expected to raise around £35 billion a year in tax and welfare savings by the final year of parliament to fund public services, along with up to £70 billion of new borrowing for investment over five years. These tax increases will raise over 1% of gross domestic product—a Labour record, matching Denis Healey's 1975 promise to “squeeze the rich until the pips squeak.”
It was a mixed night for equities, with MSCI’s Asian equity benchmark dragged lower by losses of over 1% in mainland China and Hong Kong stocks. The sentiment is that China’s latest stimulus package is underwhelming. Meanwhile, in the U.S., equity futures climbed after the Nasdaq Composite closed. Alphabet Inc. rallied more than 5% in late trading as the Google parent’s earnings beat estimates, while Advanced Micro Devices Inc. sank 7% amid a lackluster revenue forecast.
In other markets, Bitcoin rose 0.1% to $72,392.51, Ether rose 1.7% to $2,665.28, the yield on 10-year Treasuries slipped to 4.25%, West Texas Intermediate crude rose 0.9% to $67.81 a barrel, and spot gold rose 0.4% to $2,786.46 an ounce. Cable opens above 1.3000, EURUSD at 1.0820, and USDJPY at 153.30. Data-wise, we have Eurozone consumer confidence and GDP; in the U.S., we have GDP, ADP employment, Pending Home Sales, and earnings reports from Meta Platforms and Microsoft.
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