The UK Will Announce the New Annual Budget this Wednesday
The market is concerned about whether the British government will continue to choose to expand its expenditures or increase taxes to make up for the huge fiscal deficit when the British economy has not fully recovered from the pandemic. Last week, the British “Sunday Times” pointed out that in this budget, the British Chancellor of the Exchequer Rishi Sunak may increase the corporate tax rate from the current 19% to 23%.
RBA Will Discuss Interest Rates on Wednesday
The Reserve Bank of Australia will discuss interest rates on Wednesday. It is important to note that the long-term bond rates of major industrial countries have risen rapidly across the board. This situation did not just occur in the United States, but the increase in bond yields in Australia and New Zealand have been even more pronounced. The New Zealand 10-year bond yield climbed to 1.923% last Friday by market close, and the Australian same-year bond yield was also at 1.719%, far higher than the US 10-year bond yield of 1.4%. Driven by the increase in 10-year bond yields, Australia’s other shorter-term bond yields were also lifted last week. This explains why the Reserve Bank of Australia used A$3 billion last week to defend its 3-year bond yield at 0.1%.