Daily Brief – Greenland Deal

Greenland Deal

Do not expect details of the deal here since only a select few know what was discussed between POTUS and Mark Rutte, Head of NATO or indeed even if there is a deal as opposed to a face-saving way forward between POTUS and NATO/Europe. The suggestion is that (finally) senior Republicans have woken up and interceded, expressing their lack of support for the POTUS Greenland aggressive acquisition idea, and it was that, rather than Mark Rutte’s negotiating skills, that led to the de-escalation between POTUS and Europe on Wednesday. However, Mark Rutte should not be under-estimated having pulled off the unlikely coup of being PM of the Netherlands for some years without having anything like a working majority. Whatever did or did not take place in Davos between POTUS and Mark Rutte, the result was positive for market sentiment and the USD weakened.

EUR/USD 1.1727.

China’s wind farms

Despite POTUS taking the opportunity to list several of his achievements in his Davos speech on Wednesday while including a potpourri of almost correct facts and many wide of the mark fictions, it was his attack on China for making and selling wind turbines but not using them that was the most obvious outright lie. China has many very large wind farms including the largest windfarm in the world in the desert area of Western Gansu. Construction started in 2009 and is still not fully completed but it has 7000+ wind turbines which ultimately will produce 20GW enough to power 15 million homes. Incidentally, it is also just like the Great Wall of China sufficiently large to be visible from space. Whether the lack of fact checking in POTUS speeches is down to his own hyperbole or the fault of his speechwriters, the result is to diminish POTUS and the USA in the eyes of the world.

GBP/EUR 1.1485.

UK Borrowing

On the face of it, the fall in UK government borrowing from GBP 11.6 billion in December 2024 to GBP 7.1 billion in December 2025 is of course good news for public sector finances, but that difference between public spending and tax income is a result from both spending declining and tax receipts increasing. Neither of those are positive for the UK economy although less profligate spending in the short run is good for a country addicted to borrowing. Servicing that debt is costing the UK almost twice what it currently spends on defence, and defence spending is due to rise which is an added imperative for the Bank of England to control inflation and to enable it to cut interest rates. A significant cloud overhanging the UK is that neither the Labour Government nor its likely successor, the Reform party are trusted to run the UK economy by more than 15% of a poll taken last week.

EUR/JPY 185.84.

Safe Hands Ltd

This is a Midlands, UK funeral plan company that sold “peace of mind” policies to elderly people – in fact 46,000 elderly people – that went into administration in 2022. To the sound of the closing of the stable door, such funeral plan companies were only regulated by the FCA after July 2022. Meanwhile, the unlucky plan owners in Safe Hands Ltd will receive around 10% back after almost GBP 71 million has gone missing.

GBP/USD 1.3476.

Station to Station

Today it is exactly 50 years since David Bowie released his tenth and what many consider to be his finest album with this gem described as experimental in those more innocent times. What it still is 50 years on, is indecipherable:

The return of the Thin White Duke
Throwing darts in lovers’ eyes

Here are we one magical moment
Such is the stuff from where dreams are woven
Bending sound, dredging the ocean lost in my circle
Here am I, flashing no colour
Tall in this room, overlooking the ocean
Here are we. one magical movement
From Kether to Malkuth
There are you, drive like a demon from station to station

The return of the Thin White Duke
Throwing darts in lovers’ eyes
The return of the Thin White Duke

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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