Posted on October 18, 2022 We started the week with a good tone in the markets, which on the one hand have taken well the reverse gear in the United Kingdom on the measures of the new fiscal plan presented a few weeks ago, and on the other, it seems that the results Some of the major banks, without being dazzling, are outperforming forecasts in the US, as Bank of America posted strong results yesterday. In the UK, the new Chancellor of the Exchequer Jeremy Hunt said that they are going to almost completely undo the tax cut plan. For its part, the Bank of England will resume its ‘quantitative tightening’ with the sale of bonds next Monday, October 24, and will raise interest rates at the next meeting in November, according to the words of its governor Andrew Bailey. These factors caused a sharp narrowing in the sovereign debt curves, especially in the long end, fueling investors’ appetite for risk and offsetting part of the selling caused by the rise in inflation expectations published on Friday. The 10yr benchmarks tightened an average of 8-10 bps, with the German at 2.28%, the Spanish at 3.45% and the Italian at 4.68%. The first test of real demand in Gilts was carried out yesterday, after two and a half weeks of daily purchases by the BoE. A high degree of uncertainty remains with arguments supporting both directions, generating the current volatility. INFORMATIONTitleUnited Kingdom breaks with its fiscal plan DescriptionWe started the week with a good tone in the markets, which on the one hand have taken well the withdrawal in the United Kingdom on the measures of the new fiscal plan presented a few weeks ago.Author GLOBALCAJA
UK breaks with its tax plan
