{"id":11312,"date":"2025-03-26T08:55:57","date_gmt":"2025-03-26T08:55:57","guid":{"rendered":"https:\/\/hamiltoncourtfx.com\/?p=11312"},"modified":"2025-03-26T08:59:24","modified_gmt":"2025-03-26T08:59:24","slug":"atlantic-pivot","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/it\/atlantic-pivot\/","title":{"rendered":"Atlantic Pivot"},"content":{"rendered":"
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Word of the Week: Austerity<\/strong><\/h5>\n
Austerity refers to economic policies implemented by governments aimed at reducing public sector debt by cutting spending and increasing taxes. These measures are often introduced during times of economic hardship to stabilise the economy. Currently, the UK is facing economic challenges, including inflation and rising costs, which have led to discussions about implementing austerity measures to manage public finances effectively.<\/h5>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n
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Atlantic Pivot<\/h2>\n <\/div>\n
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It\u2019s amazing what a couple months of Donald Trump can do to markets \u2013 and, spoiler alert, it wasn\u2019t what he or the market thought would happen\u2026.<\/h5>\n
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As the Federal Reserve are now saying they only see one rate cut between now and the end of the year, with inflation remaining sticky, European policy makers are now talking of European rates falling to 2% by the end of the summer \u2013 that\u2019s a 65bps cut from where we are today.<\/h5>\n
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Moody\u2019s has warned that public finances in the US are on a deteriorating path, thanks to tariffs unfunded tax cuts and \u201csignificant tail risks to the economy\u201d, with the market as per usual being ahead of this statement and pushing the Nasdaq and S&P500 below the levels that they started the year at. Meanwhile, in Europe, the FTSE is up about 5%, the French CAC is almost 10% higher and the German DAX is up more than 15%! In fact, the rotation out of US stocks and into European equities is already at record highs and seems to be accelerating. Typically, stock market cycles are multi-year, but this one has started incredibly strongly and we wonder at what pace this can be sustained or, as is often the case, the smart money has started moving and this will pick up once the dumb money catches on.<\/h5>\n
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One area there is alignment is in expenditure\u2026 Far from getting the budget balanced, Trump wants a debt limit increase included in his reconciliation bill, which is dubbed \u201cone big, beautiful bill\u201d that will encompass an overhaul of the tax code, along with border, energy, and defence policies. Despite Elon Musk taking a chainsaw to various state departments (metaphorically and actually), the untouchables \u2013 healthcare, defence and social security \u2013 being out of scope means that almost any other cuts in expenditure are basically a rounding error. Still, he\u2019s not the only one with budget issues\u2026<\/h5>\n
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Today Rachel Reeves is set to lay out her spring statement and try and make her fiscal plans sound remotely responsible and part of the plan. The reality is that there\u2019s going to need to be cuts to government expenditure, an increase in borrowing and an increase in taxes \u2013 expenditure we\u2019ve heard about and will come from a material reduction in department budgets, taxation we also know is coming in the form of National Insurance hikes and threshold reductions, along with tax bracket freezes, whilst the borrowing piece could well be gotten away without mention, as a few extra billion is already being forecast in the Treasury\u2019s gilt issuance forecasts and, if Ms Reeves is lucky, the capital reallocation from one side of the Atlantic to the other, might mean that UK debt has a wider audience, which in turn might keep the costs fairly well contained.<\/h5>\n
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So, as the market decides if Europe is a better immediate prospect than the US, the problem comes that this puts Europe more at risk of Trump\u2019s ire \u2013 which may not only play out in tariffs, but in the treatment of Ukraine and the US support required to enforce any kind of ceasefire and peace keeping efforts.<\/h5>\n
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The latest on that is that there\u2019s been a ceasefire agreed in the Black Sea, which is something Russia has been very keen on, as their fleet has been pretty comprehensively decimated over the last couple of years. There\u2019s refusal by the Kremlin to go any further at this point without the lifting of US sanctions on the country \u2013 it will be interesting if, or for how long, Trump holds out on this, as it would be a firm red line for Europe, but Trump and Putin seem to have their own thing going on.<\/h5>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n
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Signal Failure<\/h2>\n <\/div>\n
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In a rather unexpected twist, the Trump administration found itself in hot water (again) after senior officials inadvertently shared their plans for airstrikes on the Houthis in Yemen with a journalist. This blunder not only exposed a glaring security lapse but also sparked a political firestorm. Critics were quick to pounce, questioning the administration’s ability to safeguard classified information and manage sensitive operations. The international community watched with a mix of amusement and concern, wondering if this was a new strategy or just sheer incompetence.<\/h5>\n

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Amidst this chaos, the creation of the Signal app by Moxie Marlinspike and Stuart Anderson in 2010 seemed almost prophetic. Designed to maximise privacy and shield users from governmental tracking, Signal’s robust encryption protocols offered a stark contrast to the apparent vulnerabilities within the Trump administration. As people sought refuge in secure communication platforms, Signal’s popularity soared, highlighting the growing demand for privacy in an increasingly surveilled world.<\/h5>\n

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Meanwhile, the humanitarian implications of these airstrikes cannot be overstated. Yemen, already teetering on the brink of disaster, faces the prospect of further devastation. The ethical considerations of such military actions are also brought to the forefront, highlighting the dire need for a more humane approach to conflict resolution.<\/h5>\n

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The accidental disclosure of airstrike plans not only undermines trust in the Trump administration but also has broader implications for global trust in U.S. leadership. This incident exacerbates the already declining trust in political institutions worldwide. Countries that rely on the U.S. for strategic partnerships and security cooperation, if they didn\u2019t already, may begin to question the reliability and competence of American governance.<\/h5>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

It\u2019s amazing what a couple months of Donald Trump can do to markets \u2013 and, spoiler alert, it wasn\u2019t what he or the market thought would happen\u2026.<\/p>","protected":false},"author":15,"featured_media":2324,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[],"class_list":["post-11312","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/11312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/comments?post=11312"}],"version-history":[{"count":11,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/11312\/revisions"}],"predecessor-version":[{"id":11323,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/11312\/revisions\/11323"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/media\/2324"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/media?parent=11312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/categories?post=11312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/tags?post=11312"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/rp-language?post=11312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}