Daily Brief – Mission Driven

Humphrey Percy
Chairman and Founder
Fri 31 Jan 2025

Mission Driven

ECB President Christine Lagarde faced some polite but firm questions in the post 25bp interest rate cut presser yesterday afternoon. Given that Germany, France and Ireland which are all on the EU naughty step have the worst Eurozone economic performances and Eurozone inflation is 2.4% or 4% for services inflation versus GDP growth for 2024 of 1.1%, how does that square with the ECB promise to get inflation back into the sub 2% target area? That was just for starters and the steely eyed normally unflappable President was a bit wobbly in her answer resorting to grasping at the somewhat desperate straw of saying that she was confident about getting inflation down because she and her ECB colleagues were “mission driven.” So that’s all right then.

EUR/USD 1.0436.

Meteor Missiles

It were ever thus in the case of French arms deals: while France and Greece have been bound by a defence agreement since 2021 not to mention them both being members of the EU, France has been caught out selling Meteor missiles to Turkey which understandably Greece believes to be against both the spirit and the actualite of their agreement.

GBP/EUR 1.1945.

UK Retail Crime

No surprise to residents of any big city in the UK that we have a problem with what has become the industrialisation of shoplifting with stealing to order and streetwise shoplifters knowing all too well what the goods value stolen will trigger prosecution. 20 million retail theft incidents last year alone. GBP 2.2 billion of goods stolen. Before readers think that it’s not their problem, it is: that GBP 2.2 billion plus the costs of security to protect the people working in retail all come back to us the consumers.

GBP/CHF 1.1307.

Central Bank Irony

In the same way that the ECB is seeking to protect the fragile EU economy with a rate cut as referred to above in the circumstances of still unknown tariffs from the new President of the USA, the irony is that the Federal Reserve is also seeking to protect the robust US economy by pausing on further interest rate cuts in the circumstances of still unknown tariffs from the new President of the USA. If one follows that through, the argument can be credibly made that if US rates stay higher for longer given the inflationary risk of those unknown tariffs, the USD is (right now) looking more likely to stay strong.

USD/JPY 154.28.

Radio Ga Ga

This day in 1984 Queen released this number which went straight into the charts and also the history books as what was to become a hardy annual or even a painful perennial among devotees of the disrespected but not dying art of Dad dancing. You have been warned:

I’d sit alone and watch your light
My only friend through teenage nights
And everything I had to know
I heard it on my radio

You gave them all those old time stars
Through wars of worlds invaded by Mars
You made ’em laugh, you made ’em cry
You made us feel like we could fly

So don’t become some background noise
A backdrop for the girls and boys
Who just don’t know or just don’t care
And just complain when you’re not there

You had your time, you had the power
You’ve yet to have your finest hour
Radio, everybody!

All we hear is radio ga ga
Radio goo goo
Radio ga ga

Have a Great Weekend!


Discussion and Analysis by Humphrey Percy, Chairman and Founder

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