Daily Brief – Central Bank Week

Central Bank Week

This evening marks the start of 3 days of the outcomes of 3 Central Bank meetings when the Federal Reserve concludes its meeting and announces the results of its deliberations. Tomorrow it will be the turn of the European Central Bank and Friday will see the Bank of Japan concluding its own meeting. While the market does not expect any shift in rates from any of them this week, it will be the language and mood music that will be parsed-endlessly given the expectation that rates are in an upward trend over the next 12 months and that will of course shape economic performance and corporate earnings. Japan’s Finance Minister Satsuki Katayama has promised intervention to support the Japanese Yen should it be necessary; with USD/JPY currently at just below 158, that may become necessary sooner than she would like. Meanwhile USD is as firm as it has been in the past weeks, and the EUR remains the worst major currency performer.

EUR/USD 1.1140.

Hong Kong

China has a plan when it comes to making the Yuan Renminbi more international and it involves Hong Kong promoting the currency strategically by building a larger offshore renminbi market infrastructure. New products including Exchange Traded Funds or ETFs, developing gold clearing and the sale of 15 billion Yuan of China’s Ministry of Finance sovereign bonds being just three of a range of initiatives recently undertaken. While characterised as de-dollarisation, this is rather more the promotion of international Yuan trading with the reduction in USD reliance as an inevitable consequence.

GBP/USD 1.3315.

UK Budget Day

More properly tagged as the Autumn Statement, Chancellor Healey has received even more advice than his tin eared predecessor Rachel Reeves did. Given the antipathy that his boss PM Burnham has for unpalatable truths, it is more than likely that the Chancellor will seek to reassure markets with some non-controversial measures such as those in support of housebuilding while at the same time trotting out the mantra of slavish adherence to fiscal discipline. The expectation is for a kick the can down the road performance as, after all, he has the Budget in March when the new top team is better played in, to do something in support of the UK economy including for example for economic growth. Meanwhile the theme will be cost of living and looking after families. As I said earlier: non-controversial.

GBP/EUR 1.1949.

Rybnik

Before you reach for your atlas this is a city in Southern Poland with a population of 122,000. More particularly it was the venue for a fishing competition when 150 European anglers descended on a nearby lake two weeks ago to try and catch carp, zander fish or the much larger catfish which can grow up to 3 meters in length and weigh up to 150 KG. The catfish is not an attractive fish with a scaleless body, 6 barbels that help it navigate in the murky lake waters and a broad head. It poses little risk to humans and has small rasping teeth. The competition for the longest fish was won after a 30-minute fight with a German and a Pole catching a catfish measuring 2.92 meters which was duly returned to the lake as the rules demand.

Brent Oil USD 114.16.

Never Mind The Bollocks, Here’s The Sex Pistols

Never let it be said that the Sex Pistols did not stick to their knitting and do what it said on the tin (album). This was their contribution to the zeitgeist that was 1977 when they released this album on this day 49 years ago. It was of course their only album as successive members of the band were carried off the stage of life together with their squeezes. Here is one of the Sex Pistols’ fan favourites:

No Feelings.
I’ve seen you in the mirror
When the story began
And I fell in love with you.
I love yer mortal sin
Yer brains are locked away
But I love your company
I only ever leave you
When you got no money
I got no emotions for anybody else
You better understand
I’m in love with myself, myself
My beautiful self
I’ve no feeling, no feeling, no feeling
For anybody else
Hello and goodbye
And a run around Sue
You follow me around
Like a pretty pot of glue
I kick you in the head
You got nothing to say
Get out of the way
‘Cause I gotta get away
You never realize
I take the piss out of you
You come up and see me
And I’ll beat you black and blue okay
I’ll send you away

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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