Quick Recap of Global Economic New……
Much of the global economic focus is on the Fed interest-rate decision, the UK Budget and the state of the Chinese economy. The trading activity that we are going to discuss in this week’s post will tackle the hard issues facing these countries and how traders can benefit from them. For starters, the UK budget has been front and center in the news since March 16, 2016. A budget which favors the top tiers of society while placing what appears to be an unfair burden of responsibility for spending cuts on the lower income earners has resulted in some shock announcements in the UK. On Friday, 18 March 2016, the Work & Pensions Secretary Iain Duncan Smith announced his resignation. This decision took the Tory party by complete surprise, and many in the Labour Party were bewildered by the decision of Mr. Smith who had a history of accepting policy decisions that were contrary to the position he had staked in his opposition to Chancellor George Osborne. Simply put Smith does not accept that the £4 billion in budget cuts that are expected over the course of this current Parliament should come from the lower income earners in UK society.
He is 100% against George Osborne on this critical issue and as a result felt that he had no other option but to resign his seat as secretary. The budget is a highly complex economic, social and political tool and it is an especially contentious issue for both sides of the political spectrum. The British Prime Minister, David Cameron was notably irate at the shock decision of IDS, as were several other MPs. However, on Saturday, 19 March IDS was promptly replaced by the Secretary of State for Wales, Stephen Crabb. The tumult in UK political circles is especially notable at this time, in the run-up to the June 23 referendum on Britain’s membership of the European Union. Prime Minister Cameron is at odds with several of his Tory members and the Mayor of London on whether the UK should remain as part of the EU or not. This has a significant impact on the FTSE 100 index and the GBP, as well as the EUR and the stability of Europe as a whole.
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