At the end of 2018, Italy agreed a budget with Brussels and that sorted things out right? Wrong. Italy has debt of EUR 3 Trillion or 3 thousand billion. According to the OECD the Italian economy will contract in 2019 and Italian debt will grow to between 2.5 and 3% of GDP in 2019 despite agreeing a 2% limit with Brussels. Unemployment is forecast to reach 12% in 2019 and public debt will reach 134.8% of GDP. In a nutshell Italy is not making enough money-economic growth is negative- and is spending too much thereby increasing the deficit. Unlike Greece which is a small economy, Italy is the fourth largest European economy and is 30% larger than Russia. Italy will be back at the very top of the agenda in Brussels this year. Expect Italy to weigh heavily on the EUR.
Focus on the oil price with WTI sharply up at $63.08 on the back of civil war threat disruption to the supply in Libya. USD remains a better performer against developed market currencies and weaker against emerging market currencies. In the case of GBP on the back of PM May asking for a 30/6/19 extension and little cross party progress on Brexit over the weekend, GBP weakened in early Asian trading this morning.
Bad news for cat owners including moggy loving James of sgm-fx
Cats according to a study released last week recognise their own names but often ignore their owners when they call them, out of sheer bloody mindedness. It also turns out from a separate study that came out over the weekend (they are like number 11 buses these cat studies) that cat owners are significantly less happy than dog owners. Cheer up James it’s only Miaouw-day !
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Onto June A slew of strong US economic data over recent weeks had boosted expectations for how the culmination of the Fed’s two-day meeting would be presented to the public last night. The story goes back further. The narrative dominant in late-2023 of a US economy in need of restrictive monetary policy was unavoidable. The […]
Germany and the EU The Germany Supply Chain Act came into force in 2023 as a result of Germans wanting to do something good for employees in other countries in particular with respect to human rights and environmental issues. So far so good. But a combination of cost and bureaucracy overlaid with the difficulty of […]
Emergency Stop In the early hours of trading on Monday morning, sudden and significant buying pressure within USDJPY has markets wondering: is this the signal that local authorities are taking another stab at active market intervention? In a critical week for FX, with central bank decisions and a slew of top-level economic data from across […]