Daily Brief – German Inflation

Humphrey Percy
Chairman and Founder
Wed 31 Jul 2024

German Inflation

Nothing to do with zeppelins this time, but more to do with German Consumer Price Inflation coming in higher than expected yesterday at up 2.6%. This was a set back for those calling for a cut in EUR interest rates as the mood swung towards the likelihood of the European Central Bank holding off and exercising more caution on that front.

EUR/GBP 0.8421.

Two Speed EU

It was ever thus but in a further example of the challenges faced by the ECB due to some countries being at different stages of the economic cycle to others, in Q2 the EU as a whole grew by 0.3% while Germany contracted by 0.1%. Ireland, Lithuania and Spain were at the top of the performance tree ranging between +1.2% and +0.8% while Latvia, Sweden and Hungary languished at the foot of the table ranging between -0.2% and -1.1%.

EUR/JPY 166.95.

McDonalds

Unusually Q2 earnings for the USA’s largest fast food chain disappointed with net profits falling 12%. Some blame pro Palestinian boycotts due to the USA and McDonalds being viewed as apologists for Israel but sales overall have certainly declined. This is in the wake of a price war with Burger King for a $5 meal. For that at the Golden Arches in the USA you get the following: a sandwich, fries, chicken nuggets, a soft drink and I would think, indigestion.

GBP/USD 1.2825.

Footballers

In the good old days when footballers made money they bought a bar, then they lost lots of money and then they went back to football. Yesterday Kylian Mbappe went one better and bought 80% of a football club: French Ligue 2 Caen for EUR 20 million. Worth checking who the seller is: US investment fund Oaktree. Maybe the same money recycling process as the bar but larger scale. On vera.

EUR/USD 1.0820.

We’re Not Gonna Take It

This day in 2019 Woodstock 50 i.e. 50 years since 300,000+ hippies/rockers/curious descended on Max Yasgur’s Farm for 3 days of mind expanding music and self medication in 1969, the plug was pulled on a re-run despite many if not most of the acts having enthusiastically agreed to participate. It was unclear quite why the organisers took the decision but all in all it was subsequently agreed that it was probably better to preserve the spirit of Woodstock as a memory rather than as  a 21st century reality. Here is the best known anthem of 1969 rebellion by the Who from their rock opera, Tommy:

Welcome to the Camp,

I guess you all know why we’re here

My name is Tommy

And I became aware this year

If you want to follow me,

You’ve got to play pinball

And put in your earplugs

Put on your eye shades

You know where to put the cork

Hey you getting drunk, so sorry!

I’ve got you sussed

Hey you smoking Mother Nature!

This is a bust!

Hey hung up old Mr. Normal

Don’t try to gain my trust!

‘Cause you ain’t gonna follow me any of those ways

Although you think you must

We’re not gonna take it

Etc Etc.

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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