Daily Brief – Mansion House Dinner

Mansion House Dinner

Last week’s dinner attended by guest of honour still fairly new Chancellor Rachel Reeves turned out not to be much of a surprise from her due to the now well worn habit of leaking what she was going to say ahead of time. The surprise came rather from Bank of England Governor Andrew Bailey who chose to reopen the topic of Brexit by suggesting that the UK should rebuild bridges to the EU. Often accused of having a tin ear the Governor lived up to his reputation by suggesting despite the self evident lack of EU economic growth that the UK should hitch its trade wagon to that of the EU. Instead of focusing on domestic issues such as productivity or planning both of which are much easier targets that was the message from the Governor. The audience was bemused and that message is unlikely to resonate much with the wider public.

GBP/USD 1.2618.

USD Strength

The good news is that there are 15 European companies -at least- that will benefit from a strong USD due to their Dollar revenues being worth more but without incurring significantly higher USD costs. Among them are Danish healthcare Novo Nordisk, Swiss Nestle, UK’s Diageo, Compass, Astra Zeneca and BAT, Spain’s Ferrovial and France’s Thales. Meanwhile the EUR continues on its path towards Dollar parity.

EUR/USD 1.0540.

Hops

In 1872 the UK had 72,000 acres dedicated to beer generating hops which was its highest ever. Since then it has been a story of decline falling to 2,500 in 2011 mostly in Kent, Worcestershire and Herefordshire. However COVID drove a stake through the heart of that diminished hop growing with production falling 42% between 2019 and 2023. While tastes have changed over the years with drinkers preferring the more citrusy tasting European beers to traditional English ales, it is the increase of supermarket sales and the closures of so many pubs that have decimated demand. We are long way from Charles Dickens’ Pickeick Papers where Sam Weller says: Kent , Sir everybody knows Kent : apples, cherries, hops and women.

EUR/GBP 0.8352.

HLD

Or High Latitude Dust is a thing and it is important to Europe. In case it has passed you by, the largest active European desert encompassing 44,000 square KMs is in Iceland. That expanse of mostly black volcanic dust gives off HLD which has been found as far away as Serbia. Understanding it better is key to predicting weather and climate change scientists now believe.

EUR/JPY 162.66.

Annuity Income

This day in 1979 Paul McCartney released his all time cheesiest ever song (and that’s saying something) Wonderful Christmastime on which he plays all of the instruments himself. Although it only rose as far as Number 6 and failed to get onto the Billboard Hot 100, it reputedly reliably makes Macca USD 400,000 a year… every year which means after 45 years… cheesy or not it’s earned him a lot of cheese: USD18,000,000.

The mood is right
The spirits up
We’re here tonight
And that’s enough

Simply having a wonderful Christmas time
Simple having a wonderful Christmas time

The party’s on
The feeling’s here
That only comes
This time of year

Simply having a wonderful Christmas time
Simply having a wonderful Christmas time

The choir of children sing their song
Ding dong, ding dong
Ding dong, ding ohhhh
Ohhhhhhh

Simply having a wonderful Christmas time
Simply having a wonderful Christmas time

The word is out
About the town
To lift a glass
Ahhh don’t look down

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter