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    UK: A moderately-sized tax relief package can give some support to GBP this week – ING

    Source Fxstreet
    Mar 4, 2024 10:28

    This could be an important week for UK markets. Economists at ING analyze Pound Sterling (GBP) outlook ahead of the Spring Budget.

    UK budget is a key event risk for Sterling

    Hopes of delivering pre-election tax cuts are likely to be met by funding constraints, even though we estimate the headroom has increased from £13bn to £18bn thanks to slightly lower market rates compared to November’s Autumn Statement. 

    UK media have reported Hunt is probably scaling back the size of the tax relief package and that support measures will also be smaller than in November.

    A moderately-sized tax relief package (i.e., one that does not trigger gilts turmoil) can probably give some support to GBP this week, but the spectrum of possibilities is admittedly quite wide.

     

    Disclaimer: For information purposes only. Past performance is not indicative of future results.
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    UK CPI: Not what BoE wants to see after stronger-than-expected wage numbers – TD SecuritiesAnalysts at TD Securities note that UK inflation data came in stronger than expected in March, with headline inflation falling to 3.2% y/y and core declining to 4.2% y/y.
    Source  Fxstreet
    Analysts at TD Securities note that UK inflation data came in stronger than expected in March, with headline inflation falling to 3.2% y/y and core declining to 4.2% y/y.
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    ECB to cut policy rates at each and every meeting from June onwards – ABN AmroNick Kounis, Head of Financial Markets and Sustainability Research at ABN Amro, notes that the European Central Bank (ECB) President asserted that while the Governing Council would be ‘data dependent’ it was ‘not Fed dependent.’ ECB will cut policy rates at each and every meeting from June on wards "Overall, we think the ECB’s communication is consistent with a start of a rate cut cycle at the June Governing Council meeting.
    Source  Fxstreet
    Nick Kounis, Head of Financial Markets and Sustainability Research at ABN Amro, notes that the European Central Bank (ECB) President asserted that while the Governing Council would be ‘data dependent’ it was ‘not Fed dependent.’ ECB will cut policy rates at each and every meeting from June on wards "Overall, we think the ECB’s communication is consistent with a start of a rate cut cycle at the June Governing Council meeting.
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    BoC Decision Preview: Interest rates set to remain unchanged as rate cut bets focus on JuneThere is widespread anticipation that the Bank of Canada (BoC) will maintain its policy rate at 5.0% for the sixth consecutive time during its upcoming policy meeting on Wednesday.
    Source  Fxstreet
    There is widespread anticipation that the Bank of Canada (BoC) will maintain its policy rate at 5.0% for the sixth consecutive time during its upcoming policy meeting on Wednesday.
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