While widely anticipated, the new vacancy at 10 Downing Street for a third Prime Minister in 2 months left both the FX and Gilt markets relatively unchanged. That was due more to bemusement at the prospect of the Conservative Party even contemplating bringing back Boris Johnson. Consulting the bookmakers, Rishi Sunak is evens, Penny Mordaunt at 12/5, Boris Johnson at 3/1 and Ben Wallace at 12/1. Given that RS was the MPs choice before the Membership chose Liz Truss and it is the MPs who will select their next leader, it could be assumed that Rishi Sunak will be the next PM. But this is 2022 and we are talking about a wildly divided Conservative Party. In terms of markets, Rishi Sunak would be best for UK plc and Boris Johnson would be worst. The other two leading candidates would be negative in that they are both seen as inexperienced and are also largely unknown political quantities. Despite the chattering classes eg Bloomberg claiming that it makes no difference who is the next leader given the economic situation, wiser heads know that is simply untrue. The UK needs stability after this instability but it also needs clear sightedness. And a true leader. GBP/USD 1.1190 and GBP/EUR 1.1490.
News in that President Vladimir Putin sent Silvio Berlusconi a “very sweet” birthday card and 20 bottles of vodka. Never mind the optics of accepting this birthday largesse and the warmth for Russia emanating from SB, we have researched the very most unacceptable gifts that one can give a Russian. In order, they are: An even number of flowers; sharp objects such as knives or scissors; an empty wallet; a handkerchief; a medical device; a mirror; home slippers; socks; cosmetics and lastly and curiously, pearls. Fortunately Silvio Berlusconi has almost a year to make a suitable choice in return as President Putin’s birthday is October 7. Let’s hope Giorgia Meloni persuades him to reconsider making any gift before then. EUR/USD 0.9820.
Good news for English winery, Chapel Down shareholders who have seen their shares trade within a range of a low of 17p and a high of 44p. Currently at 28p with a market cap of GBP44.3 million, shareholders will not only be looking forward to buying wines from their company at favourable prices, but they will be cheered by the announcement that on the back of a bumper harvest, Chapel Down is expecting to produce 2 million bottles this year.
Farmers are at odds (again) with the NZ government over a proposed new tax to charge them for climate-heating gases released by farm animals when burping. Apart from the challenges of measuring such emissions, the suspicion is that it is only a matter of time before the tax is applied to emissions from the other extremity of the animals. NZ farmers already believed that their government was not supportive of their efforts prior to this news and claim that it will drive animal husbandry to other countries less preoccupied with animal emissions from either end . NZD sharply stronger versus GBP but definitely not on this news with GBP/NZD 1.9725.
It was the Spencer Davis Group that recorded this number in 1965 and 57 years later it is still a staple at parties and weddings. After an uncertain launch when it was mostly played on radio stations that catered for black people in the USA, it was dropped when the publicity pictures subsequently arrived showing the white faces of the band. After that hiatus, the song quickly grew in popularity and was played on all radio stations. Here it is and very much a song for our times in the UK:
Keep on runnin’
Keep on hidin’
One fine day I’m gonna be the one
To make you understand
Oh yeah
I’m gonna be your man
Hey hey hey
Everyone is talkin’ about me
Makes me feel so bad
Hey hey hey
Everyone is laughing at me
Makes me feel so sad
Keep on runnin’
Hey hey
All right!
Keep on runnin’
Runnin’ from my arms
One fine day I’m gonna be the one
To make you understand
Oh yeah
I’m gonna be your man
Hey hey hey
Everyone is talkin’ about me
Makes me feel so bad
Hey hey hey
Everyone is laughing at me
Makes me feel so sad
Keep on runnin’
Hey hey
All right!
Have a Great Weekend!
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 […]