Surprise – Foreign Exchange Traders buy pounds

A Big Big Day today for the UK. We have unemployment figures followed by by the MPC minutes due at 9.30am. Later this afternoon Osbourne and the 2014 Budget!!

Good morning,

Domestically today’s focus is on the 2014 Budget due at 12.30pm. This is the last budget that can meaningfully impact the economy ahead of next years scheduled General Election. Ahead of this today the latest UK labour market report is expected to show that the rise in the unemployment rate was temporary and markets are expecting a drop to 7.1%. This could be the start of a pound climb today if the figures do not disappoint!

The minutes of this month’s MPC meeting should provide further clues on individual members thinking. Although with a change to personnel on the horizon the collective view of the MPC may shift over the coming months.

The conclusion to this month’s FOMC policy meeting is expected to see the Fed continue to taper its asset purchases by a further $10 billion, slowing the pace of QE to $55bn.