Daily Brief – Next UK Chancellor

Next UK Chancellor

Spoiler alert: we do not have a clue as to what is going through Andy Burnham’s mind for his pick for the next UK Chancellor. Instead, we have looked at the bookmaker Paddy Power odds which show that Wes Streeting in return for his loyalty is 10/3, but the clear favourite is Ed Miliband at 5/4 while Yvette Cooper is 6/1 and lastly coming up strongly is Shabana Mahmood also at 10/3. These days predictive betting at Polymarket for example has proven to be a more reliable indicator and that shows a different story: Wes Streeting attracting 70% of market sentiment, with Ed Miliband 14% and Yvette Cooper 11%, while Shabana Mahmood only accounts for 7%. Place your bets if you feel so inclined but it will have to be for UK readers at Paddy Power, SkyBet, Ladbrokes, or Betfair, as Polymarket is not legal in the UK. NB There are no odds quoted for incumbent Rachel Reeves nor does she feature on Polymarket which suggests that her Westminster selfie charm offensive on Andy last week did not work and she is not a runner.

GBP/USD 1.3203.

EU-China

Aswe wrote last week, China has a EUR 1 billion per day everyday trade surplus with the EU. EU supremos Chancellor Merz and EU Commission President Ursula Von der Leyen to name two have been increasingly saying that the trade imbalance between China and the EU is unsustainable. The latest mood music from Brussels and Berlin has been to suggest that China should consider a 1985 Plaza Accord type reset which would see the Yuan revalue by 25% in an agreed move between the EU and China. Hollow laughs from Beijing over the weekend and an article in the South China Post that was to say the least derisive about the chance of that. Best instead that the EU works to get a trade agreement with the Peoples’ Republic.

EUR/USD 1.1392.

Sintra, Portugal

Wednesday this week will see ECB President Lagarde hosting Fed Chairman Kevin Warsh in his first significant away fixture when he meets his counterparts from the EU, UK, and Canada at the ECB Annual Forum. Top of the agenda will be the change implied by the Fed no longer giving forward guidance on monetary policy to the markets under Chair Warsh. The ECB has already moved away from forward guidance but Governor Bailey of the Bank of England still presides over detailed commentary on the evolution of the UK economy under different scenarios.

EUR/JPY 184.04.

UK Benefits

A chart which should serve to electrify our government into taking action from renowned market commentator Gerald Ashley over the weekend. It shows the percentage of UK individuals who receive more in benefits than they pay in taxes. It’s a fairly straight line over the past 50 years. In 1977 it was 37% but now has soared to 53.3%. That cannot and should not continue.

EUR/GBP 0.8627.

She

This day 52 years ago in 1974 when romance was alive and well and songs were songs, Charles Aznavour became the oldest male singer aged 50 to notch up a Number 1 with this diamond of a song. French and Armenian Charles Aznavour led a storied life and enjoyed a 70-year career and is known as being possibly the greatest singer songwriter ever.

She may be the face I can’t forget
A trace of pleasure or regret
May be my treasure, or the price I have to pay
She may be the song that summer sings
May be the chill that autumn brings
May be a hundred different things
Within the measure of a day

She may be the beauty or the beast
May be the famine or the feast
May turn each day into a heaven or a hell
She may be the mirror of my dream
A smile reflected in a stream
She may not be what she may seem
Inside her shell

She who always seems so happy in a crowd
Whose eyes can be so private and so proud
No one’s allowed to see them when they cry

She may be the love that cannot hope to last
May come to me from shadows of the past
That I remember ’til the day I die
She may be the reason I survive
The why and wherefore I’m alive
The one I’ll care for through the rough and rainy years

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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