Daily Brief – EU Consumers

EU Consumers

While no one would pretend that the past week has been good for savers and investors, there is a glimmer of hope for EU consumers. The argument goes as follows: the EU exports EUR 500 billion of goods to the USA and imports EUR 350 billion. Conversely, the EU’s service sector is exactly the opposite importing more services than it exports. If EU exporters of goods lose a good proportion of their US market demand, they will want to offload those goods within the EU. At the same time, Asia, in particular Greater China and Japan, will be facing the same problem. That means that EU and probably UK consumers will be offered deals and discounts on those goods.

Meanwhile energy costs have dropped sharply post the tariffs being announced as markets assume a slowdown in economies and demand dropping for energy. That is also good for EU consumers given the high proportion of imported energy in the EU.

At the same time the Euro has strengthened sharply making all those imports whether of goods or energy cheaper. Something more cheerful at the start of the week?

EUR/USD 1.0956.

Hong Kong

As part of China, Hong Kong’s exports to the USA will be subject to 54% tariffs for US consumers. However, while Hong Kong’s exports to the USA are large at USD 37.9 billion, that number is a relatively small proportion of Hong Kong’s GDP at USD 380 billion i.e. 10%. The other factor in Hong Kong’s favour is that it is a Free Port, and as such is able to apply its own tariff on the USA or otherwise. As of now Hong Kong has no plans to do so. In the meantime, some of those USD 37.9 billion of goods will find their way on advantageous terms to European consumers – see above.

GBP/USD 1.2887.

European Alcohol Consumption

The headline statistic is that it is almost 25% down per Capita since 1980 for citizens in European countries over the age of 15. Each successive decade has seen a decline on average consumption. The Germans and French top the league for the big countries but it’s Latvia that stands at the very top when it comes to alcohol consumption and, for good measure(no pun), are still increasing, which bucks the trend for more responsible drinking these days. Surprisingly, the UK is a respectable mid ranker-doubtless flattered by the Gen Z propensity towards teetotalism and gym memberships.

GBP/EUR 1.1760.

Conspiracy Theories

In these good news strapped times, a report over the weekend was released and, despite being well hidden nevertheless, it came up on the SGM-FX radar; the report ranked the best music industry conspiracy theories. Most are ancient history but here are some of the better(worst) ones: Elvis Presley faked his own death; Jim Morrison of the Doors is alive; Paul McCartney is dead; Stevie Wonder is not blind. But the best worst one is about Justin Bieber: he can turn himself into a lizard according at least to Australian news publication Perth Now.

USD/CAD 1.4219.

Bird on The Wire

This day in 1969 Leonard Cohen released his second album called Songs from a Room which featured more great songs from the Canadian singer including this number which was subsequently made even more famous by Bob Dylan.

Like a bird on a wire
Like a drunk in an old midnight choir
I have tried in my way to be free
Like a worm on the hook
Like a knight bent down in some old-fashioned book
It was the shape, the shape of our love that twisted me

If I have been unkind
Oh, if I have beyond kind
I hope you can find the way to let it all go right on by
If I have been untrue, if I have been beyond true
It’s just that
I thought a liar as out of lover had to be some kind of liar too

Like a babe stillborn
Like a beast with his horn
I have torn everyone who reached out for me
But I swear by this song
I, I swear by all that I have done wrong
I will make it all up to thee

I saw this beggar, he was leaning on his wooden crutch
He says to me, “Leonard, you just can’t ask for all that much”
And pretty woman, standing in her darkened door
She cries out to me, “why not ask for just a little bit more”

Like a bird on the wire
Like a drunk in an old midnight choir
I have tried in my way to be free

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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