Spanish budget leads the markets bounce

It was another volatile day yesterday with politicians and budgets leading the direction in the markets.Spanish budget leads the markets bounceThe main money market mover yesterday was Spain’s budget announcement for 2013, which was delayed until after European markets had closed and was the real pointer for how the struggling economy will increase revenues next year.

It is seen as more as spending cuts rather then increasing revenue through tax, with 8.9% being knocked off of ministerial budgets expected to reduce €40 billion off the deficit.

The French budget is expected to be the harshest for 30 years out later today with the much anticipated 75% tax rate expected to be sworn into the budget at a time when GDP is remaining stagnant on no growth.

We had UK GDP revised numbers out of the gates early with the UK showing resistance to the recession coming in at -0.4% rather then -0.5% and gave GB Pound an early rally against euro and US Dollar.

We also had mixed figures from the US with GDP getting a downward revision, 1.3% against 1.7%, mainly attributed to the $5.3bln revision in farm inventories from the worse drought in decades hitting the nation and durable goods sales which were worse then expected.

However jobless figures continued their steady decline which is a bonus for a president seeking re-election.

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