Daily Brief – Bank of England

Humphrey Percy
Chairman and Founder
Fri 4 Oct 2024

Bank of England

In an interview with the Guardian newspaper, Governor Bailey made it clear that Central Banks could afford to cut interest rates more sharply. Markets correctly interpreted that statement as him preparing the way for cuts at pretty much every Bank of England MPC meeting for the next 6 months until they reach 3.25%-3.50%. Chancellor Reeves will be most appreciative of this well timed announcement by her old boss Governor Bailey, as it will make the bitter pill of her 31/10/24 Budget slightly more palatable. GBP did not share this happy pill and sold off sharply yesterday afternoon.

GBP/EUR 1.1902

Oil

Volatile oil markets which have ranged between USD 69 and USD 76 in the past week alone. The latest threat by Israel yesterday afternoon to bomb Iran’s oil facilities was enough to result in a rash of forecasts for the Gulf oil supply to be disrupted and prices to shoot through $80 and upwards from there.

Brent Oil USD 76.92

X

The story is that Fidelity the mega fund manager and repository of many UK readers ISA investments has marked its relatively small stake in X to market. They bought just under $20 million of shares at the same time as Elon Musk took X private and have now revalued those shares at $4.2 million. That implies that Elon Musk’s $44 billion investment is now worth $9.4 billion or a decline of just under 80%. Before readers reach for the gin, X is a private company and therefore if Fidelity chooses to mark its investment down as they have, then it may be due to it being a conservative company with equally conservative valuation policies. Also in the scale of Fidelity’s colossal holdings it is a rounding error. Elon Musk may not take the same sanguine view.

GBP/USD 1.3108


Formula One

For the first time Rolex is about to sever its ties with F1 which it has sponsored for many years. Louis Vuitton Moët Hennessy or LVMH largely owned by Bernard Arnault, the world’s richest man when Mark Zuckerberg is not, will replace Rolex in a deal said tom be worth USD 1 billion over the next 10 years. This says more about the state of the Swiss watch industry than about F1; quite simply when it comes down to financial firepower, Rolex is not able to compete with LVMH and F1 is about big bucks.

EUR/USD 1.1016

Another One Bites The Dust

This was Queen’s second US Number 1 and it cemented their fame and fortune in the consciousness of their global fan base-as well as being a particularly fine record.

Let’s go!

Steve walks warily down the street
With the brim pulled way down low
Ain’t no sound but the sound of his feet
Machine guns ready to go

Are you ready? Hey
Are you ready for this?
Are you hanging on the edge of your seat?
Out of the doorway the bullets rip
To the sound of the beat, yeah

Another one bites the dust
Another one bites the dust
And another one gone, and another one gone
Another one bites the dust (yeah)
Hey, I’m gonna get you too
Another one bites the dust

How do you think I’m going to get along
Without you, when you’re gone?
You took me for everything that I had
And kicked me out on my own

Are you happy, are you satisfied?
How long can you stand the heat?
Out of the doorway the bullets rip
To the sound of the beat, look out

Another one bites the dust

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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