Daily Brief – China

China

An excellent Economist magazine analysis of China’s energy pivot last weekend describes it as an electrostate as opposed to the USA under President Trump which is a petrostate. The former is focused on alternative energy and its oil buying strategy while the latter is not only fixated on pumping oil but on stopping offshore wind farm projects given POTUS’ antipathy to them. Recent US government compensation payments to wind farm projects total USD 4 billion to abandon them. Between February and June this year China astonishingly cut its oil imports by 50% or 5.5 million bpd by buying 200m barrels cheaply in January and then after restricting oil consumption, switching the economy to renewable energy and to green transport. As a footnote, that reduction in China’s oil consumption would normally have cut the global oil price by as much as USD 30 i.e. almost half where oil stood before March 1 2026.

Brent Oil USD 94.39.

UK Food Price Inflation

We have written previously about this aspect which has together with energy become the largest contributors to the inflation rises that central banks and consumers alike are struggling with worldwide. Consumers must struggle with a range of food price pressures that span items that some do not use much if at all, such as olive oil which has risen more than 100% to bread that has gone up 30%. Cheese is up 42% and eggs 58% while chocolate and pasta are both up by around 50%. The Ukraine war, the disruption to and rise in energy prices, and the rise in fertiliser costs (30%) are all to blame and these 3 factors are not within the power of new UK PM Burnham to influence. So when the listening tour phase is over next month as we enter Party Conference Season swiftly followed by the Autumn Budget on 28-10-26, the UK will discover whether PM Burnham is capable of leadership rather than merely capable of populist soundbites.

GBP/USD 1.3644.

EUR Cash

Those who feared that the dawn of the Digital EUR would herald the demise of cash can relax: the ECB is planning to roll out a new suite of banknotes in 2029 – ironically, the same year as for the scheduled launch of the Digital EUR. At present, EUR banknotes feature abstract buildings that do not exist. Nearly 30 years after the inception of the EUR,  the ECB is proud to be getting real: the new notes will have pictures of real people, real birds and real buildings. Yes really.

EUR/USD 1.1559.

The Way You Tell’em

Upon being arrested while hiding in a dustbin, a 23 year old speeding dangerous driver attempting to evade the Northern Irish Police came up with what he felt were compelling mitigating reasons for his reckless driving. The reason he explained that he was speeding was because his passenger was wanted by the Police. The Police explained to the Londonderry court that he was driving at 84mph before they set off in pursuit and it was that speed which resulted in the pursuit that culminated in the arrest beside the dustbin. The District Judge was as unimpressed by the excuse as he was by the dangerous driving and sentenced the driver to 4 months gaol and a 2 year driving ban.

EUR/GBP 0.8563.

Bohemian Rhapsody

This day in 1975 Queen settled into Rockfield Studios, Monmouth, Wales and began what was to be an intensive 3 week recording session when led by Freddie Mercury they sang their parts for between 10 and 12 hours a day which resulted in a 6-minute suite that is officially named as the most streamed song of the twentieth century.

Is this the real life? Is this just fantasy?
Caught in a landslide, no escape from reality
Open your eyes, look up to the skies and see
I’m just a poor boy, I need no sympathy
Because I’m easy come, easy go
Little high, little low
Any way the wind blows doesn’t really matter to me, to me

Mama, just killed a man
Put a gun against his head, pulled my trigger, now he’s dead
Mama, life had just begun
But now I’ve gone and thrown it all away
Mama, ooh, didn’t mean to make you cry
If I’m not back again this time tomorrow
Carry on, carry on as if nothing really matters

Too late, my time has come
Sends shivers down my spine, body’s aching all the time
Goodbye, everybody, I’ve got to go
Gotta leave you all behind and face the truth
Mama, ooh (any way the wind blows)
I don’t wanna die
I sometimes wish I’d never been born at all

I see a little silhouetto of a man
Scaramouche, Scaramouche, will you do the Fandango?
Thunderbolt and lightning, very, very frightening me
(Galileo) Galileo, (Galileo) Galileo, Galileo Figaro, magnifico

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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