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Trends & Analysis
News

GBP/USD dips on contraction in UK’s retail sales

News

Week Ahead Preview: 20th of January

News

Crude oil retreats from a 5-month high

News

US banks report better-than-expected earnings

News

Is Salesforce sending bullish signals?

News

Are the oil bulls back?

Trends & Analysis
News

GBP/USD dips on contraction in UK’s retail sales

News

Week Ahead Preview: 20th of January

News

Crude oil retreats from a 5-month high

News

US banks report better-than-expected earnings

News

Is Salesforce sending bullish signals?

News

Are the oil bulls back?

Fiscal policy definition

Fiscal policy is the use of government spending, borrowing, and taxation to influence the economy. Governments can enact fiscal policies to stimulate or slow down economic growth, control inflation, and maintain economic stability. Fiscal policies can have direct and indirect effects on the financial markets across stocks, bonds, forex, and more.

 

Government spending and financial markets

Government spending can impact financial markets. For example, if a government decides to increase spending on the manufacturing industry, it can lead to increased demand for materials suppliers, shipping and logistics companies, and related industries. This can potentially increase share prices in these sectors.

 

On the other hand, if a government decides to cut spending on infrastructure projects, this can lead to decreased demand for construction materials, which may lead to decreased share prices in the sector and related industries.

 

Interest rates and financial markets

Fiscal policy can also impact interest rates, which can have direct and indirect impact on the forex and bond markets. For example, if a government decides to increase spending without increasing taxes, it can lead to a budget deficit. This can lead to the need for borrowing, building pressure on interest rates. This can affect its issued currency and government bond prices.

 

Start trading with ADSS

ADSS offers a range of global markets for traders, with opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.

 

See all glossary trading terms


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ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.