Markets overlook Osborne speech
Statements of intent during the election campaign stole some thunder from Osborne’s Budget today as the familiar theme of ‘lower tax, lower welfare’ was maintained. Markets were broadly unmoved, although sterling crosses bouncing off session lows did indicate a vote of confidence for the Chancellor with his international reputation as Mr Austerity also subsiding somewhat.
Despite the EU-Greece fest continuing, corporate treasurers are already suffering from a Greek hangover and have this week developed an obstinate detachment from financial market headlines. The looming threat of a Grexit had driven many to re-asses their treasury policies in recent weeks; UK importers positioned for a fall-out that would reduce their European costs as exporters reworked their strategies to allow for an increase in forward cover to protect European revenues. The lack of market moves however now make this cautious hedging appear fear-driven and hasty. The market’s refusal to take positions despite the drama continuing to unfold has left traders and investors scratching the heads, while blushing corporate treasurers suffer the disapproval and dismissive head-shaking from board members they recently urged towards pre-emptive action.