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October 31st Financial News
FastBull Featured
2024-10-31
The Prime Minister of Lebanon said that a ceasefire deal with Israel would be reached within days; the UK's government raised taxes by £40 billion in the new budget plan.

[Quick Facts]

1. Lebanon's PM sees a ceasefire deal with Israel within days.
2. Poll: Harris leads in Wisconsin and Michigan, ties with Trump in Pennsylvania.
3. BOJ is expected to hold rates steady amid political turmoil.
4. US pending home sales rose greatly MoM in September.
5. UK's government raised taxes by £40 billion in the new budget plan.
6. US private sector added 233,000 jobs, driven by services growth.

[News Details]

Lebanon's PM sees a ceasefire deal with Israel within days
The Lebanese Prime Minister on Wednesday said that a ceasefire deal with Israel would be announced within days. Israel's public broadcaster shared a draft agreement outlining an initial 60-day ceasefire. According to the leaked proposal which was written in Washington, Israel would begin withdrawing troops from Lebanon within the first week of the 60-day ceasefire, aligning with earlier reports by Reuters.
Hezbollah has not yet commented on the ceasefire proposal, though the group's new leader, Naim Qassem, said earlier on Wednesday that Hezbollah would consider a ceasefire under certain conditions if Israel wished to stop the conflict. However, Israel has not yet accepted any agreeable proposal.
 Poll: Harris leads in Wisconsin and Michigan, ties with Trump in Pennsylvania
A new CNN poll reveals that Democratic Presidential candidate and current Vice President Kamala Harris leads former President Trump by a slight margin in Michigan (48% to 43%) and Wisconsin (51% to 45%). In Pennsylvania, both candidates are tied at 48%. The "blue wall" states (Michigan, Wisconsin, Pennsylvania) were crucial in Biden's 2020 victory over Trump. Now, the November 5 election is less than a week away.
BOJ is expected to hold rates steady amid political turmoil
The Bank of Japan (BOJ) is expected to maintain its ultra-low interest rates on Thursday and signal a cautious approach to unwinding large-scale monetary stimulus, as political uncertainty and market unease cast a shadow over the policy outlook.
Japan's ruling coalition lost its majority in last weekend's election, heightening concerns about policy paralysis and raising the bar for further rate hikes. Given the lack of inflationary surges and Japan's fragile economic recovery, the BOJ is unlikely to hastily increase borrowing costs. However, if the BOJ adopts an overly dovish stance on the policy outlook, this could provide speculators with a reason to sell off the yen, potentially deepening its decline.
These conflicting considerations may prevent the BOJ from sending a clear signal on the timing and pace of further rate hikes, especially ahead of the U.S. presidential election on November 5. The BOJ may also offer subtle hints by amending sections of its report on future policy guidance. In its July report, the BOJ indicated it would continue rate hikes if economic and price conditions met forecasts. Sources suggest that the committee may discuss adding descriptions of risk factors or triggers for policy shifts in the guidance.
US pending home sales rose greatly MoM in September
The National Association of Realtors (NAR) reported that the U.S. Pending Home Sales Index rose from 70.6 in August to 75.8 in September, marking the highest level since March, marking a month-over-month increase of 7.4%, which is the largest since June 2020 (14.9%). The national sales rose by 2.6% year-over-year, the highest since May 2021.
NAR Chief Economist Lawrence Yun noted that contract signings increased across all regions as buyers took advantage of lower mortgage rates and increased inventory at the end of the summer. If employment continues to grow, inventory rises, and mortgage rates stabilize, sales are expected to keep climbing. Although mortgage rates have been rising since last September, Yun believes the housing market outlook will become clearer in the next two years.
UK's government raised taxes by £40 billion in the new budget plan
UK Finance Minister Rachel Reeves announced her autumn budget plans to parliament on Wednesday, October 30, which includes tax hikes of £40 billion ($51.8 billion) to address the public finance deficit and invest in public services. Reeves said that the UK government aims to achieve a budget surplus in the 2027 and 2028 fiscal years.
Key tax increase measures include:
National Insurance (NI) contributions for employers will increase from 13.8% to 15% from April 2025, and the NI contribution threshold will be reduced from £9,100 to £5,000. The increase in NI contributions is expected to generate an additional £25 billion a year for the government, making it the largest source of tax revenue in the budget.
Capital Gains Tax (CGT) will also be raised. The lower rate of CGT (for basic rate taxpayers) will rise from 10% to 18% and the higher rate of CGT (for higher rate taxpayers) will rise from 20% to 24%. The tax rate on capital gains for fund managers from investment, known as carried interest, will increase to 32%. No changes will be made to the 18% and 24% rates of Capital Gains Tax that apply to residential property gains.
The inheritance tax threshold will remain frozen until 2030. The threshold for ordinary property is set at £350,000, while the exemption can rise to £500,000 if the estate includes a home passed to direct descendants. Defined contribution pension pots will be subject to inheritance tax liability at the death of the holder from April 2027.
From April 2025, the controversial Non-Dom tax status will be abolished, and a new tax system based on residency will be introduced. The current Non-Dom system allows non-UK residents to avoid paying tax on overseas income for up to 15 years. Its abolition will end the tax relief provided to wealthy foreigners, with Reeves stating that this move will generate an additional £12.7 billion in tax revenue for the government over the next five years.
US private sector added 233,000 jobs, driven by services growth
The ADP reported on Wednesday a change of 233,000 jobs in the U.S. for October, surpassing market expectations. Service sector jobs grew rapidly, while the manufacturing sector lost 19,000 jobs. Wage growth slowed, with a 6.2% wage increase for workers changing jobs. The U.S. economy's GDP grew by 2.8% in the third quarter and consumer spending increased by 3.7%.
Despite the lingering effects of recent hurricanes, U.S. companies significantly accelerated their hiring pace in October, marking the highest job growth in over a year, which reflects unexpectedly strong labor market demand. Meanwhile, job vacancies have dropped to their lowest level since January 2021.

[Today's Focus]

11:00 – BOJ Interest Rate Decision
14:30 – BOJ Governor Ueda's Press Conference
17:00 – ECB Executive Board Member Panetta Speaks
18:00 – Eurozone CPI YoY Prelim (Oct)
20:30 – Canada GDP MoM (Aug)
20:30 – U.S. Core PCE Price Index YoY (Sept)