GBP, FTSE 100 down after UK Autumn statement
The fiscal statement, as the government has named it, has seen both the pound, the FTSE 100 and FTSE 250 lose ground.
There were lot of measures that help people at the margin of society, although not enough, according to the opposition benches.
Also, the government is now working towards more nuclear exposure to lessen the country’s reliance on Russian gas.
(Video Transcript)
UK Autumn statement
Let's take a look at the after effects of the fiscal statement out this morning from the Chancellor of the Exchequer, Jeremy Hunt.
He started off by saying one of the first things was that the Office of Budget Responsibility already says that the economy is now in recession and that is going to take us through to 2023, according to the Bank of England.
But I think today's budget was really one where we have seen a little bit of air taken out of the tyres in terms of the economy and the outlook. A lot of money taken off the table. It means that people have less money to spend. That being said, the pensioners are being supported. The lower end of the salary range is being supported by extra money and people are being helped back into work.
There's also a move into more nuclear as well, which I thought was particularly interesting, which is going to cost money.
GBP/USD
Let's take a look what's been happening on the markets. And first of all with GBP/USD which is down at 11797. In fact, if you look at the hourly candles that we've got, you can see pretty much since the start of today's trade, we've been on the way down.
So the budget hasn't really changed any sort of firm direction for any of this. That's sterling against the US dollar.
GBP/EUR
Just a quick update on where we are in terms of GBP/EUR.
Just to show you that the direction of travel is exactly the same against the euro. So sterling is down against a whole basket of currencies.
FTSE 250
I think more often than anything else, it's always worth looking at the FTSE 250 index, which had up until this morning already been on the way down. And it's building on that negativity at the moment at 19,042.
Now, this is just a retracement in what is otherwise a market which is moving up.
FTSE 100
Same for the FTSE 100. So this is just a few days of declines. How far down this goes remains to be seen. We've just got the MACD turning over. As soon as that blue line goes below the red dotted line, that means that the momentum is picking up on the downside.
So if you do want to take this market short, currently at 19,043, your stop would go above this top here to right about the 19,800 level with a view to coming down to this line of support at the 1770 level.
And if it hits that and stays there, I would then want to go long on this with a stop below this area down here with a view to taking it back up again.
That being said, we'll have to see how things develop in the longer term. But at the moment at least, the markets are on the way down as a result of Jeremy Hunt's fiscal statement.
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