With an absence of liquid London markets and a dearth of political news with President Trump in Iraq, it is a chance to turn to the city of Yiwu in north eastern China. Why and what? This is a city of 1.2 million comparable to our own Birmingham (1.1 million) with an enormous market and more specifically an enormous ecommerce market supplying the likes of Amazon UK and US with goods manufactured in China. With all eyes on a US/Sino trade war one might expect Yiwu to be traumatised as to what might become of their market business. While understandably concerned, Yiwu has a different take on this: instead of sending goods direct to the US, they have developed a cost effective export business to other countries such as Mexico where the goods are then on shipped to the US-job done! So what can we deduce form this? While a trade war is hugely concerning if it were to develop further, there is a separate parallel but nevertheless huge ecommerce market that circumvents national borders and allows consumers to access goods at favourable prices avoiding expensive tariffs. One thing is for sure: those huge container ships one sees with forty foot containers piled up on top of each other delivering every conceivable consumer good to all points of the globe will be busier than ever in 2019.
Yesterday admittedly after some woeful pre-Christmas performances, saw the Dow Jones Industrial Average gain 4.98% or 1086 points-the single largest one day gain EVER! As I have written before get ready for a return to higher volatility in all markets in 2019.
Meanwhile le petit Napoleon himself, President Macron has been forced to cancel his ski-ing holiday in the completely obscure French Pyrenees resort La Mongie and go into hiding such is the strength of feeling that has been ignited by his “progressive” policies. This will mean that his ability to shape the succession politics of the new ECB head will be curtailed and the Finn, Erkki Liikanen is currently in the lead position to be announced on February 15 as the successor to Mr Draghi.
Have a great day!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
UK Wages Bank of England Governor Andrew Bailey yesterday warned of the pressure on wages that are threatening to lead to a wage price spiral as the effects of inflation on the cost of living together with the 12 consecutive interest rate rises that consumers have experienced. The market has not enjoyed the poor inflation […]
UK inflation – June hike worthy? Yesterday’s inflation data surprised markets. The data was released slightly ahead of European core trading hours. The lighter liquidity available at this time could have resulted in the short-term spike towards 1.2450 on cable and around half a cent to the mid-1.15s within GBPEUR. However, you could, and perhaps […]
International Monetary Fund With no sign of insouciance despite its 180 degree turn in a two month timeframe, the IMF yesterday reversed its downbeat if not disastrous forecasts for the UK and stated the UK is no longer heading for a recession and nor is it the weakest member of the G7 when it comes […]