Philip Hammond’s Spring Statement spotlight was hijacked this Tuesday by Donald Trump using his old TV catchphrase on (now former) Secretary of State Rex Tillerson.
Both the dollar and the Dow Jones seemed a tad shaken by the firing of Tillerson, the latest in a string of high profile departures from the White House. The greenback shed 0.4% against both the dollar and the euro, though it did maintain a 0.5% rise against the yen, while the Dow saw its early gains dissipate, sending the index back below 25200. That the Dow didn’t fall any further was likely thanks to a dovish US inflation reading, which fell from 0.5% to 0.2% month-on-month (the core figure also dipped, from 0.3% to 0.2%).
Though the pound and euro’s respective gains against the dollar were fairly mild, the decline see by the European indices was any but. The DAX plunged more than 130 points, pushing it the wrong side of 12300, while the CAC saw its previous half a percent rise transform into a 0.4% loss.
As for the FTSE, it dropped 60 points, taking the index to a 5 day low. Informing the UK index’s decline was Hammond’s limp Spring Statement; the promise that real wage growth would turn positive in the first quarter of 2018-19 reignited fears of a Bank of England rate hike, dragging the FTSE lower. Elsewhere growth forecasts for 2018 were revised a tad higher to 1.5%, but with reductions to the guidance for 2021 and 2022.
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