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
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