Daily Brief – EU-China

EU-China

The EU has a trade deficit of almost exactly EUR 1 billion per day every day with China and there is an increasing debate within the EU as to what to do about it. At some point, China can expect a plea from Brussels to let the Yuan appreciate given that it is being kept low to the tune of approximately 25%. The other issue is that China keeps much of its overseas earnings in Hong Kong rather than repatriating them which serves artificially to cheapen the Yuan. EU Commission President Ursula Von der Leyen has described the EU trade deficit as unsustainable while Chancellor Merz has woodenly clocked the fact that a cheaper Yuan is a problem for the EU. So far it is just grumbling talk among the EU brass, but it is worth noting that the topic was not mentioned by them at last week’s G7 when it so easily could have been raised under the agenda topic of Global Imbalances.

EUR/USD 1.1396.

Millionaire Exits

Maddened by Macron, seething with Starmer, or miffed with Merz, millionaires are increasingly upping sticks and leaving respectively France, the UK, and Germany according to wealth consultancy Henley and Partners. While distant UAE, Singapore, and New Zealand are all quality destinations based on tax, living standards and quality of life, they are for most European rich simply too far from family and friends. Step forward the European winners for those migrant millionaires: Cyprus, the Netherlands, and Portugal. However, when proper consideration has been made and further investigation undertaken, it is the more traditional Italy, Greece, and Switzerland that offer the best homes for millionaires… and their millions.

EUR/GBP 0.8627.

Asset Class Returns

Taking a look at the best returns by asset class in the past 100 years throws up some interesting facts: 1930’s Gold; 1940’s and 1950’s Equities; 1970’s Real estate and Gold; 1980’s and 1990’s Equities, 2000’s Commodities and Gold, 2010’s Equities and that takes us to the 2020’s where Equities are strong but Gold and Real estate are also strong while Bonds the normally reliable boyfriend have done poorly, delivering negative real returns. In the past 96 years Equities have averaged 10.3%, Gold in second place 5.6%, Real estate 4.7% and Bonds 4.3%.

GBP/USD 1.3191.

Down Under

Two Australian men in their 20’s decided on the basis that if they were going to import Class A drugs into Australia to meet what must be considerable Aussie demand that they should go large. Worth EUR 500M or GBP 433M, the less than dynamic duo stashed 2.7 tons of Cocaine in a bunker in Western Sydney. Unfortunately for them, Sydney’s finest were on to them and had mounted Operation Minjiang which meant they were arrested and will appear in court where if guilty (if?!) they face life sentences. The arrests were based on them importing and possessing a commercial quantity of the drug. So that’s the answer: AUD 816 million of cocaine is considered to be a commercial amount down under.

EUR/JPY 183.88.

Just the Way You Are

This day in 1992 American singer Billy Joel received his Hicksville High School Diploma on Long Island New York 25 years after he failed to graduate with the rest of his class in 1967 due to skipping gym and dipping out on gaining the requisite English credits. Hardly a rock n roll career start but rather behaviour symptomatic of his goody two shoes image carefully nurtured as part of his quest to wed for the second time to a super model and become Mr Christie Brinkley in 1985. Sadly the 1977 song lyrics foretold their incompatibility and they split in 1994.

Don’t go changing to try and please me
You never let me down before, mmm
Don’t imagine you’re too familiar
And I don’t see you anymore

I would not leave you in times of trouble
We never could have come this far, mmm
I took the good times, I’ll take the bad times
I’ll take you just the way you are

Don’t go trying some new fashion
Don’t change the color of your hair, mmm
You always have my unspoken passion
Although I might not seem to care

I don’t want clever conversation
I never want to work that hard, mmm
I just want someone that I can talk to
I want you just the way you are

I need to know that you will always be
The same old someone that I knew
Oh, but what will it take till you believe in me
The way that I believe in you?

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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