UK FISCAL: Reeves Claims "UK Economy Is Not Broken" As 26 Nov Budget Confirmed
Sep-03 08:51
In a video clip posted to X announcing the date of the budget (26 Nov), Chancellor of the Exchequer Rachel Reeves claims "Britain's economy isn't broken, but I do know that it's not working well enough for working people. Bills are too high and you feel that you're putting in but you're getting less out."
- Reeves: "...But there are still challenges. The cost of living pressures I know are still very real. We need to bring inflation and borrowing costs down. We do that by keeping a tight grip on day-to-day spending and by enforcing my non-negotiatble fiscal rules."
- Reeves: "Renewal is our mission, and growth is our challenge. Investment and reform are our tools..."
- Politically, the chancellor and wider gov't remain in a very difficult position. It faces an increasingly sceptical gilt market, a decades-high tax burden that risks deterring investment, manifesto pledges not to raise income tax, VAT or employee National Insurance contributions, and a sizeable wing of the parliamentary Labour party fully opposed to any further gov't spending cuts.
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JPY: The Yen Catches up with the Swissy
Aug-04 08:46
- The Yen is catching up with the CHF, still the second worst performer within G10 against the USD.
- US Treasuries are hovering at session lows (tick higher in Yields), helping the USD paring some of its post NFP weakness.
- Small resistance in the USDJPY moves down to 148.81, but as mentioned on the EU Cash Govie Open, the wild USDJPY plummeted from 150.52 post US NFP.
US TSY FUTURES: FV Blocked
Aug-04 08:38
Latest block trade lodged at 09:26:16 London/04:26:16 NY:
- FVU5 3.0K lots blocked at 108-29+, looks like a seller.
- DV01 ~$129K.
EGBS: /STIR: Goldman Wary Of Limited Further Downside For EUR FI Vol
Aug-04 08:34
Goldman Sachs note that limited detail within the composition of last week’s Eurozone GDP data makes it “difficult to distinguish genuine strength from trade-related distortions, but the lack of a clear deterioration further reduces the tail of near-term easing”.
- Elsewhere, they note that “rates volatility continues to fall, consistent with a relatively narrow range of surveyed expectations on outcomes for growth, inflation, and policy - see for instance the latest ECB SMA. And even if the ECB remains on hold from here, there is additional policy space that can help buffer macro shocks and thus volatility”.
- Still, Goldman think that “with the easing cycle now most likely over, and macro valuations of implied volatility somewhat stretched, further volatility declines are unlikely. The decline in EUR rates volatility has been a tailwind for sovereign spread compression, lower front-end rates and curve steepeners. The loss of this tailwind suggests a shift in risk reward for these and other carry strategies”.
