Daily Brief – European Fuel Prices

European Fuel Prices

The nearly 7-month Gulf conflict is doubtless the topic of most note for European delegates to the UN General assembly this week as well as weighing heavily on POTUS given the impending midterm US elections. The European electorates are suffering petrol pump prices as follows in EUR: Netherlands 2.43, France 2.27, UK 2.02 and Austria 1.93. Diesel is even more expensive in EUR: Denmark 2.52, Netherlands 2.49, France 2.4 and UK 2.3. Apart from driving commuter motorists towards going electric, a continental motoring holiday has become a luxury unless of course you live in North Macedonia or In Andorra where diesel is 80 cents cheaper than Denmark at EUR 1.70.

Brent Oil USD 105.58.

US Inflation

Yesterday we wrote about the strengthening USD and the reasons behind what has been a 1% plus appreciation this week. After that it was the turn of the Federal Reserve Bank of Cleveland President Beth Hammack to weigh in with the view that US inflation persists and she was candid enough to admit that the longer it does persist, the harder it is to bring the rate of inflation back to the 2% target. 30 Year US Treasury Bonds now yield 5.40% and 10 Years yield 5.11% which have taken US Treasury Bonds to the highest yield levels since 2004. As a reminder, the base case is for one more 25bp hike in rates before year end, but if Beth Hammack is proved to be correct in her view, it is only a matter of time before not one but two rate hikes become priced into markets. Meanwhile USD will remain strong.

EUR/USD 1.1369.

Alliance for the Future

This is the catchy name for what EU Commissioner Ursula Von der Leyen unveiled last week as the path from CETA between the EU and Canada. In case it has passed you by, CETA stands for Comprehensive Economic and Trade Agreement which was signed in 2016 and came into provisional effect in 2017 despite 10 of the EU countries not signing it- being Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia not ratifying it for reasons of food safety and environmental standards. Nor is there a timetable for ratifying CETA in those recalcitrant countries as that process is effectively blocked: for example, in France the Senate rejected it and so the government stopped it being put in front of the National Assembly fearing outright rejection. It was ever thus: if there is a failure to approve, then block a measure to prevent it being denied. Meanwhile the EU Commissioner serenely glides on in denial with over a third of the EU not buying into her vision.

GBP/USD 1.3218.

St Cuthbert’s Way

With the soaring cost of plane fares and the ever improving UK climate, it may be time to dust off the walking boots in 2027 and set out for Melrose in the Scottish Borders where you can pick up the 62 mile route which charts the life of St Cuthbert who began life as a shepherd and died as Bishop of Hexham in Holy Island, Lindisfarne off the Northumberland coast where he was buried for the first time in 687AD. The route has been named by Lonely Planet as one of the iconic experiences available to the more adventurous along with the Darjeeling Himalayan Railway and the Route Napoleon in South Eastern France. Subsequently St Cuthbert was re-interred in Durham Cathedral in 875AD to protect his grave from marauding Vikings who were prone to create such havoc in those days.

GBP/EUR 1.1623.

Those Were The Days

Indeed they were on this day in 1968 when in another millennium/century/age, Welsh singer Mary Hopkin was at Number One. The song was billed as a nostalgic reflection on youth, lost romantic idealism and the passage of time. All in a tavern lalalala etc

Once upon a time there was a tavern,
Where we used to raise a glass or two.
Remember how we laughed away the hours,
think of all the great things we would do.
Those were the days my friend,
We thought they’d never end,
We’d sing and dance for-ever and a day,
We’d live the life we choose,
We’d fight and never lose,
For we were young and sure to have our way.
Lalala lah lala, lalala lah lala
Just tonight I stood before the tavern,
Nothing seemed the way it used to be.
In the glass I saw a strange reflection,
Was that lonely soldier really me.
Those were the days my friend,
We thought they’d never end,
We’d sing and dance for-ever and a day,
We’d live the life we choose,
We’d fight and never lose,
For we were young and sure to have our way.
Lalala lah lala, lalala lah lala

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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