Daily Brief – EURO

EURO

ECB President Christine Lagarde delivered a speech last week at Hertie School in Berlin, setting out the ECB ambition of making the EURO a larger/ the largest global reserve currency. At 20% versus USD ‘s 57%, EUR is already the challenger, but unlike CL’s calling for the deficit to be made up simply by establishing deeper capital markets in the Eurozone, there is a lot more to do than that, including a single insolvency law across the EU (unlikely), Central Bank swap agreements (possible but dependant on changes in the derivatives and payment clearing systems to become independent of the USD), and agreement for a single Eurozone debt market (dependant on overcoming the North South EU divide: prudence versus profligacy). So, while it may suit the narrative of a ECB President with her eye on the French Presidency, it will require much structural, financial, and legal change which will take years.

EUR/USD 1.1345.

M*A*S*H

Farewell to Hot Lips Houliha whose offscreen persona Loretta Swit checked out on Friday at the age of 87. The 1970’s series was a gem and the other characters Hawkeye, Trapper, Klinger, Radar and Colonel Henry as well, of course, as fall guy Frank Burns delivered a top flight package of satire on the Viet Nam war amid slapstick pranks and crisp one liners. Worth looking up. R.I.P.

USD/JPY 144.02.

UK Defence Spend

More vagueness about UK Defence spend from the Government as a percentage of GDP which currently stands at 2.3%. The Prime Minister in his desire to distract from his woeful performance in the local elections has pledged to increase it to 2.5%. The Defence Minister has not read the memo and come up with 3%. That memo is not from his boss but from POTUS who has much loftier ambitions for the West at 5%. To put it in perspective in the post Korea era of 1960 the UK spent 8% and since then it has been a straight line downwards.

GBP/USD 1.3455.

Le Train

In France, more than 1 million people took a sleeper train last year. At nearly 80% occupancy, operators are on to a good thing and scrambling to satisfy demand. It’s fun, it’s green and it’s fairly priced. In the traffic clogged UK we can only look on in envy.

EUR/GBP 0.8432.

Wake Me Up Before You Go Go

Back in 1984 on this day Brit pop duo George Michael and Andrew Ridgley released this song which was based supposedly on a note left by Ridgley for his parents as he dreamt of forming a boy band named Wham!

Never mind how, it was a sensation in the UK, USA, Australia, Europe and Canada and it was memorable for being Wham!’s first smash hit as well as debunking the snooze and you lose myth.

Jitterbug
Jitterbug
Jitterbug
Jitterbug

You put the boom boom into my heart
You send my soul sky high when your lovin’ starts
Jitterbug into my brain (yeah, yeah)
Goes a bang-bang-bang ’til my feet do the same

But something’s buggin’ me
Something ain’t right
My best friend told me what you did last night
Left me sleeping in my bed
I was dreaming
But I should’ve been with you instead

Wake me up before you go-go
Don’t leave me hanging on like a yo-yo
Wake me up before you go-go
I don’t wanna miss it when you hit that high

Wake me up before you go-go
‘Cause I’m not planning on going solo
Wake me up before you go-go
Take me dancing tonight
I wanna hit that high
Yeah, yeah

You take the grey skies out of my way
You make the sun shine brighter than Doris Day
You turned a bright spark into a flame (yeah, yeah)
My beats per minute never been the same

‘Cause you’re my lady, I’m your fool
It makes me crazy when you act so cruel
Come on, baby, let’s not fight
We’ll go dancing, everything will be alright

Wake me up before you go-go

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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