Daily Brief – Back to Basics

Back to Basics

As we know, back to basics means different things to different people and most memorably for PM John Major it meant back to my place for Edwina Currie who for the benefit of younger readers was not his wife. In her keynote address to the world’s top Central Bankers in Sintra, Portugal what ECB President Lagarde meant by using that phrase was that the past years of bond buying, cheap loans to banks, and other economically supportive measures were over. The ECB will revert to using interest rates as its main policy tool and for good measure the ECB has explicitly said that it will not be offering forward guidance to markets. This new regime is possible, Mme Lagarde averred due to the more stable nature of the EU economies which she demonstrated by citing the success of Spain, Portugal, and France in weaning themselves off fossil and onto solar/wind energy. While that argument would not play well to other EU countries – especially Germany, the message is clear: the ECB is reverting to managing stability and focusing on interest rates rather than the economic triage that it has been forced to undertake especially since Covid.

EUR/USD 1.1401.

The Price of Cool

Conscious that the current European heatwave will evaporate in the next weeks and may consequently make the following irrelevant, some readers may still appreciate such information while the heat dome remains firmly in place. It turns out that there is quite a range of handheld, wearable and fixed room coolers available. At the entry level at GBP 63 is the Jisu Life Neck Fan Life 3 which as the name suggests one wears around one’s neck which boasts 5 speeds and lasts 16 hours between charges. Then from Dyson is the Mini Cool handheld at a premium price GBP 85. A jump up from that is Sony’s wearable air-conditioning device, the Reon Pocket pro that will set you back GBP 139. For a taking no heat prisoners solution consider the top of the range Dreo Turbocool 765s at GBP 199.99 that promises to lower the temperature in a room by 15.5c.

EUR/JPY 185.11.

Shanghai

Historically, Hong Kong has played the role of the springboard for Chinese companies expanding into international markets but there is a move afoot to have another go at challenging that by Shanghai establishing itself as a global business hub. In the past 30 years while Shanghai has developed as a powerhouse of an economic region, it has not achieved the status of a global financial centre. Yesterday in what was described as a closed door event which nevertheless was well reported in the South China Morning Post, Liu Xiaochun of the Shanghai Financial Institute set out Shanghai’s stall if not to take Hong Kong’s crown, but certainly challenge it by offering an alternative Chinese international superconductor financial centre for Chinese companies. Watch this space.

GBP/USD 1.3225.

Swiss International

Forget the mile high club, if hot dogs at 35,000 feet do it for you, advance immediately to buy yourself a first class ticket this summer on Swiss International, settle back in your seat and order a “Bastardo.” It may not sound that appealing but it is the Swiss answer to the gourmet hot dog and consists of course of a Swiss-made sausage, coleslaw, apple chutney, sour cream and roasted walnuts all in a Swiss multigrain roll. After some test flights when the Bastardo refused to remain upright, some deft Swiss surgery on the roll did the job and the Bastardo now stands proud on Swiss International’s porcelain tableware for discerning first class jet setters.

GBP/EUR 1.1594.

A Day in The Life

In case you are wondering in these sultry summer days as to which year the actual Summer of Love was, it was 59 years ago in 1967. That summer, apart from all the hippy dippy stuff, the music scene was dominated by the Beatles and their album Sgt Pepper’s Lonely Hearts Club Band. The best song on the album is generally thought to be a Day in The Life:

I read the news today, oh boy
About a lucky man who made the grade
And though the news was rather sad
Well, I just had to laugh
I saw the photograph

He blew his mind out in a car
He didn’t notice that the lights had changed
A crowd of people stood and stared
They’d seen his face before
Nobody was really sure if he was from the House of Lords

I saw a film today, oh boy
The English Army had just won the war
A crowd of people turned away
But I just had to look
Having read the book
I’d love to turn you on

Woke up, fell out of bed
Dragged a comb across my head
Found my way downstairs and drank a cup
And looking up, I noticed I was late
Found my coat and grabbed my hat
Made the bus in seconds flat
Found my way upstairs and had a smoke
And somebody spoke and I went into a dream

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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