Daily Brief – Evens

Evens

That is the bookies’ betting on PM Starmer being gone by the end of June following the UK Council Elections, which were even worse than had been expected for the Government. Whether that does indeed happen, equity prices are set for greater volatility, gilt yields, and therefore interest rates will likely remain at their high levels or go higher depending on who replaces the Prime Minister with markets expecting a less stable Labour leadership. 

EUR/JPY 184.66.

EUR CBDC

A Euro denominated Central Bank Digital Currency has been more than a gleam in the eyes of the ECB team that has been slaving away on the project for the past 2 years. President Christine Lagarde made a speech in Madrid on Friday which would, if it has been accurately reported, more than have spoilt her ECB Digital Team’s weekend. CL contends that if the aim is to widen the appeal of the EUR as a global currency, then Digital EUR is not the efficient way to do it as she sees that tokenized Commercial Bank deposits would be a better way forward. Clearly CL has not been reading the carefully worded policy papers produced by her own team which set out the case for a well thought out introduction of the digital EUR. The audience might have been forgiven for thinking that Madame Lagarde should have stuck to the safer but elusive ground of Euro wide issued debt to deepen the EUR market and the establishment of a fully functioning EUR capital market as the best ways to get the EUR to global reserve currency status. 

EUR/GBP 0.8640.

Potato Futures

Could it be that the potato futures market sees the outcome of the Iran-USA conflict rather more clearly than the financial markets? In the last 2 months, potato futures have risen in price per 100kg from €2.11 to €18.50. Fertiliser, passage through the Strait of Hormuz and supply fears are of course the factors that have moved the price but the real driver in the 700% increase is price volatility as expectations shift daily.

EUR/USD 1.1754.

TOWIE

Essex has long been known in politics as being a bellwether area: Mondeo Man whose centre of gravity is of course Dagenham. Basildon is not only the home of TOWIE it’s also the town which Margaret Thatcher focused her Essex attention back in the last millennium. The remarkable thing that is most striking in Essex on Thursday apart from the redrawing of the political map which by now is well known is that the turnout was 43%. Despite that high turnout the Tories did worse than they feared and it is indeed a sad day when the only positive headline for them was “Tories hold Harlow.” This high turnout is if not unprecedented certainly highly unusual for local elections and may be the forerunner of a return of the electorate to political engagement rather than the recent years’ default of inertia bordering on insouciance.

GBP/USD 1.3588.

Macarthur Park

This song released this day in 1968 and sung by Irish tearaway and top actor Richard Harris, is one of pop’s enduring mysteries. It did well for RH but better many years later for Donna Summer. It’s the lyrics which continue to arouse heated debate over quite what they meant in general and what the significance of leaving that cake out in the rain really was, but it’s safe to suppose that amphetamines were involved:

Spring was never waiting for us, girl
It ran one step ahead
As we followed in the dance
Between the parted pages and were pressed
In love’s hot, fevered iron
Like a striped pair of pants

MacArthur’s Park is melting in the dark
All the sweet, green icing flowing down
Someone left the cake out in the rain
I don’t think that I can take it
‘Cause it took so long to bake it
And I’ll never have that recipe again
Oh no!

I recall the yellow cotton dress
Foaming like a wave
On the ground around your knees
The birds, like tender babies in your hands
And the old men playing checkers by the trees

MacArthur’s Park is melting in the dark
All the sweet, green icing flowing down
Someone left the cake out in the rain
I don’t think that I can take it
‘Cause it took so long to bake it
And I’ll never have that recipe again
Oh no!

There will be another song for me
For I will sing it
There will be another dream for me
Someone will bring it
I will drink the wine while it is warm
And never let you catch me looking at the sun
And after all the loves of my life
After all the loves of my life
You’ll still be the one

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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