Beware the ides of March

The ides of March is the 15th of March. On that date in 44BC Julius Caesar was murdered by a group of Roman senators having been warned the previous month by a soothsayer named Spurinna that his life would be in danger for the following 30 days.

I am no soothsayer but can share with you that March is a packed month which is very likely to keep the currency markets bubbling away in as volatile a fashion as we have come to know and expect.

This week brings us the long awaited UK budget.

Will Chancellor Sunak go for growth in this post-Brexit but pre end of lockdown period or look to immediately start to reduce the gargantuan debt mountain built up over the last 12 months?

Will he raise capital gains and other taxes as has been muted by so many? 

For my money, I think its worth remembering that UK government borrowing costs have not been as low as they currently are since Harold Macmillan was in 10 Downing Street so I suspect that what we will see on Wednesday is first of all measures to take us to the end of lockdown, scheduled for 21 June and then measures to help stimulate the UK economy to recover as quickly as possible. I expect items like free ports; a bonfire of red-tape; support for SME's and 95% mortgage guarantees for first time buyers to take centre stage.  

This morning's latest UK manufacturing data showed growth at its slowest pace since 2016 but the figure of 50.7 registered in February still represents expansion in the sector, no mean feat given we are in our third national lockdown.

Worth also bearing in mind that 23 March represents exactly a year since Boris announced the first national lockdown. 

Over 20 million people in the UK have now received their first Covid jab including 9 out of 10 over 65's with an additional 800,000 have received both jabs so the UK does seem to be well on course for fully reopening maybe even before the scheduled date of 21 June.

The Pound is currently trading just over a cent shy of the 11 month high registered last week against the Euro.

This Friday we get the latest US NFP (employment) data, barely a week after the sharp reversal in the Dow Jones in New York after the benchmark 10 year Treasury bond yield rocketed to a 12 month high figure last Thursday of 1.6% sparking inflationary fears and thus the sharp stock market sell-off. Meanwhile the Democrat controlled House of Representatives, the lower house in Congress passed the $1.9 trillion Covid stimulus package put forward by new President Joe Biden.

The Pound is currently trading nearly 3 cents lower than the 35 month high registered against the Dollar last week.

All in all, an action packed first week of what is very likely to be another highly lively month.

If you have an upcoming currency requirement, please call on 0044 (0)1202 804733 or email [email protected] to discuss.

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