Daily Brief – EU Inflation

EU Inflation

Now up at 3.8% at almost double the 2% target rate, Eurostat ( the clue is in the name) would have us look at core EU inflation which is 2.5%. That begs the question as to whether it is really sensible to strip out energy, food and tobacco which accounts for almost half the total inflation rate. Doubtless the ECB will come to the right conclusion and take some action on rates sooner rather than later ie at their next meeting on October 28/9.

EUR/USD 1.1255.

G7 Oil

Murky brinkmanship once again last week as POTUS threatened to block shipments of diesel from the USA unless Europe drew on its own reserves to ease the shortage and price hike. President Macron who currently Chairs the G7 has said that the G7 will release 50m barrels of crude oil and 50m barrels of diesel. The G7 membership comprises Canada, France, UK, Germany, Japan, Italy and the USA. Is that what POTUS had in mind when he specified Europe? The most recent release suggests that indeed POTUS is satisfied as he announced that Europe had “agreed to release a massive amount of their heavily stocked Diesel Oil.” While helpful it is no more than a temporary reprieve as the only solution is to get oil supplies from the Gulf flowing freely.

Brent Oil USD 102.25.

Uber Driver

An Uber driver on the way home after a long day at the SGM-FX coal face late volunteered that by day he worked for the Financial Ombudsman and had done so for many years in the Complaints section. Never mind the Ombudsman by day and Uber driver 7 nights a week question, when I suggested that as many as 50% of all complaints were spurious, he rejected that out of hand. In his view only 40-45% of complaints were without any foundation and were rejected. So that’s all right then.

GBP/USD 1.3241.

EU Gas Reserves

At a record low and with prices rising, the question is when a price problem becomes a full scale supply problem. If the winter is cold and the situation on supply remains unchanged , it is entirely realistic to expect gas prices in the EU to double. To pile on further misery, if that happens, as night follows day, electricity prices will also sharply increase leading to an electricity crisis.

GBP/EUR 1.1766.

Help Me Rhonda

3 million copies and multiple years at the top of the charts for the Beachboys with their album, Endless Summer followed the release of this fine collection of songs this day in 1974. One of the very best of the tracks is this 1965 gem Help Me Rhonda. Nothing to do with the Rhonda Valley in Wales and in fact the girl in the song, Rhonda is fictional.

Well, since she put me down, I’ve been out doin’ in my head
I come in late at night and, in the mornin’, I just lay in bed
Well, Rhonda, you look so fine (look so fine)
And I know it wouldn’t take much time
For you to help me, Rhonda
Help me get her out of my heart
Help me, Rhonda
Help, help me, Rhonda (help me, Rhonda)
Help me, Rhonda
Help, help, me Rhonda (help me, Rhonda)
Help me, Rhonda
Help, help me, Rhonda (help me, Rhonda)
Help me, Rhonda
Help, help me, Rhonda (help me, Rhonda)
Help me, Rhonda
Help, help me, Rhonda (help me, Rhonda)
Help me, Rhonda
Help, help me, Rhonda
Help me, Rhonda, yeah
Get her out of my heart
She was gonna be my wife
And I was gonna be her man
But she let another guy come between us
And it ruined our plan
Well, Rhonda, you caught my eye (caught my eye)
And I’ll give you lots of reasons why
You gotta help me, Rhonda
Help me get her out of my heart
Help me, Rhonda
Help, help me, Rhonda (help me, Rhonda)

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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