Daily Brief – Federal Reserve

Federal Reserve

Today’s US inflation figures will be even more closely watched than usual given that the path of the Federal Reserve’s interest rate policy will in large part depend on how they look. Add into the mix the on-off and hopefully on nature of the Iran-US peace talks which alternatively drives USD down and up plus the strength of the US employment market as evidenced in last week’s growth in non-farm payrolls that came out much stronger than expected and it all adds up to continuing volatility in USD and therefore in FX markets.

EUR/USD 1.1538.

Ageism

Recently, the tone of most commentary has been directed towards bemoaning the ageing and therefore decline of some economies such as those of Japan and Western Europe. Switzerland and the UK as typical examples have 20% of their populations in the Senior category. Let’s look instead at those countries with a much smaller percentage of Seniors or over 65’s. Funnily enough, the young go-go emerging top end economies of India 7%, Brazil 11%, Mexico 9%, and Indonesia 8% will increasingly pick up the economic growth batons. There are even lower numbers of Seniors in some countries, but the populations are smaller, or life expectancy is low in the case of Gulf countries such as Saudi Arabia or the UAE.

GBP/USD 1.3370.

European Value

An article in Forbes magazine aimed at transactionally focused cash strapped US tourists visiting Europe concluded that there are 5 countries in Europe that offer great value, which is defined as the cost of a Cappuccino coffee being more than 30% cheaper than the USD 6.50 it costs typically in NYC or California. Those countries where the USD goes furthest are Cyprus, Montenegro, Hungary, Poland, and Slovenia. All of course are already popular with European tourists and not just because of their bargain coffees but rather more due to the weather, scenery, culture, and cuisine, none of which feature more than in passing in the article which is $ centric.

EUR/JPY 185.03.

Gelato Corner

Wales’ finest are investigating a mystery crime that began at St Mellon not far from Cardiff when a JCB was stolen from a farm. The JCB was driven to Cardiff and was rammed into a fast-food outlet named Gelato Corner. The police are focusing their enquiries on motive but it is unclear whether it was the motive that inspired the thief to pinch a JCB, the decision to ram Gelato Corner, or whether it was a misplaced attempt to remove a cash machine which is the more usual crime de jour when it comes to JCBs and urban centres. Meanwhile, somewhat after the event an appeal has been made for information to be submitted to Crimestoppers.

EUR/GBP 0.8630.

Pyramid Song

English band Radiohead has a strong following and fans will recall their 2001 album Amnesiac which featured this hit for the band which was reportedly inspired by the Egyptian underworld. Yes really.

I jumped in the river, what did I see?
Black-eyed angels swam with me
A moon full of stars and astral cars
And all the figures I used to see

All my lovers were there with me
All my past and futures
And we all went to heaven in a little row boat
There was nothing to fear and nothing to doubt

I jumped into the river
Black-eyed angels swam with me
A moon full of stars and astral cars
And all the figures I used to see

All my lovers were there with me
All my past and futures
And we all went to heaven in a little row boat

There was nothing to fear and nothing to doubt

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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