China is taking advantage of weakness in the Italian economy to increase its influence and strengthen ties between the two nations. China is keen to gain ownership of Italian ports such as Genoa to give them access to the Northern European markets by road from the Italian port. Italy is the European country with the largest Chinese population. Additionally Chinese have taken control of Italy’s power grid, some luxury brands and also high tech companies-all strategic assets. China has ploughed more than EUR 13 billion into more than 600 companies in the past 20 years. Belatedly the USA and Brussels have woken up to the fact that Italy has become the first European country to endorse China’s investment strategy. More thoughtful analysts see all this as China achieving its strategic objectives in gaining greater European and global influence by taking advantage of Italy being on the economic back foot.
In this game the Italians will be wondering like ABBA if indeed The (Chinese) Winner Takes It All.
Dow had a good day rising to 25,703. FTSE steady at 7,159. Gold at $1309. Oil put in a strong performance to close at $58.36 following the Saudi decision to reduce output. GBP strengthened on the later subsequently confirmed news that a NoDeal Brexit was not the desired outcome by the UK Parliament and has continued to strengthen this morning.
It may have passed readers by, but earlier this week the UK’s Office for National Statistics quietly removed the 3 piece suite from the index it uses to measure inflation as it was no longer representative of buying habits. Research on that gold standard of middle class proprietaryness the John Lewis site revealed that John Lewis stopped stocking sets of furniture two years ago. Increasingly we all buy statement sofas, mismatched furniture and have replaced more traditional materials with brass, marble, copper or velvet. So all change as we couch potatoes lounge around in our onesies!
More tea, vicar?!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Renminbi Reserves?
Charles Porter
Tue 3 Feb 2026
Renminbi Reserves? The Dollar debasement debate hasn’t finished but should now take a breather whilst some stability has been restored to the currency. A combination of the nomination of Kevin Warsh, as we noted yesterday, as well as some robust US data are to thank for that recovery. To note here whilst on the subject, […]
Daily Brief – A Dollar Vacuum
Charles Porter
Tue 27 Jan 2026
A Dollar Vacuum If you’ve ever heard the phrase, ‘a rising tide lifts all boats’, you already know everything you need about today’s FX market. That is provided of course you’re not trying to analyse the rising tide itself, in this case our US Dollar. The Dollar is the counter currency to most key pairs […]
Daily Brief – Secondary effects
Charles Porter
Thu 29 Jan 2026
Secondary effects Despite the Federal Reserve decision last night offering momentary relief to the Dollar, a structural shift in USD remains underway. There were two themes to the Federal Reserve’s decision last night. Firstly, the Fed presented a decision to hold based upon the resilience that the US economy is showing. Secondly, Powell staged a […]
