With most of Fiscal Phil’s bunnies out of the hat prior to the budget, there was little room for much surprise. As was widely expected extra funding will be directed in part towards helping the UK troubled high street. This is welcomed news, especially when we think back to last winter which was particularly severe for the British high Street. Retailers will be hoping that this gesture from Philip Hammond will help underpin the high street ahead of another potentially harsh winter prior to Brexit. Bellwether Next was already trading over 1.5% higher on the day, thanks to a general rebound in sentiment across global markets and was little moved following the announcement. Despite this being a welcomed gesture, the troubles with the UK high street run deep and the extra funding is a drop in the ocean to what is really needed to even begin to tackle the deep-rooted problem.
Overall the pound was disappointed by a budget that lacked big vision ambition but given the uncertainty of Brexit just around the corner that is hardly surprising. The pound was trading 0.1% lower when Hammond started speaking and had fallen to 0.3% lower by the conclusion. $1.28 is offering support right now, however even that is starting to look shaky.
Markets rebound after horrifying October
The weaker pound provided extra support to the rebounding FTSE as investors digested Hammond's budget and cheered HSBC’s impressive results. With almost all sectors in the black, beverages were a noticeable sectorial loser. Further tax on wine an industry set to be hit by Brexit unnerved investors late in the day.
Market across the globe jumped sharply higher after a horrifying month to date with the FTSE experiencing its best session this month. The Dax was another standout performer, as investors cheered the news that German Chancellor was set to step down from politics at the end of her term in 2021.
Despite a solid rebound in Europe, the US session was looking rather lackluster in comparison. The Dow and the S&P are clinging onto gains, whilst the Nasdaq has one again fallen into the red as investors fret over key tech firms reporting this week, including Apple and Amazon.