Daily Brief – O Canada

O Canada

With much of the world’s North American focus on the USA rather than Canada, it is worth taking a look at what has been happening in the past few months in Canada. Government initiatives have been directed towards mitigating the effects of the US tariffs including new strategic response funds and extra loan programs for the automotive and agriculture industries. The economy after the resultant wobble in the wake of those tariffs has stabilised. Contrast that to the political, economic, social, and financial woes that outgoing/gone French Premier Francois Bayrou articulated in his all in one Vote of Confidence manifesto and what turned out to also be his resignation speech to the French electorate and the two G7 nations are clearly on markedly divergent paths. Worth also taking a look at EUR/CAD with the graph showing that it is on its highest level since 2009 at 1.6235 having gone up on a virtually straight line in the last 3 years from 1.30 in July 2022 and looking toppy to say the least given the above. As we wrote yesterday, France at present is a national problem rather than EU wide but depending on how the situation develops that could well change.

EUR/CAD 1.6235.

Debt to GDP Ratio

In the past this has been a ratio that was mostly followed by economists and market participants. Now, since Covid, with the explosion of national debt globally, it is and rightly should be on everyone’s radar. The UK stands at Number 6 in the Top 10 of the most indebted nations at a whisker below 100% i.e. its National Debt is almost exactly the same as its Gross Domestic Product. Market leader by a long way is Japan at 256% then Italy at 135%, followed by the USA at 119% then France at 110% and Canada at 107%. At the bottom of the Top 10 is Germany at 63%, which helps understand firstly the strength of Germany’s economic heritage as well as Chancellor Metz having the leeway to borrow more and release the “debt brake” despite the hard nuts at the ECB resisting that strongly.

EUR/USD 1.1743.

Cyberslavery

Pause for thought when you receive a scam email as to its author and source. The latest example of cyberslavery involves African nations such as Kenya, Ethiopia, and Uganda from where men and women are lured with the promise of earning money overseas to Thailand. Very often, those Africans end up being trafficked from Thailand to Myanmar where they are kept locked up and forced to send messages to, for example, US investors to swindle them into participating in cryptocurrency scams. A lack of application or success is met with punishment beatings and starvation. With high unemployment rates and young populations, Africa is a ripe hunting ground for unscrupulous South East Asian gangs.

EUR/GBP 0.8659.

Battery Power

The race to store as much power as possible in the smallest lightest container continues, but in parallel there is as much effort being put into energy storage in batteries which is known as flow battery storage, where batteries are crammed into a shipping container and positioned close to renewable energy sources such as solar, wind, or wave. The challenge is time shifting or storing energy in batteries until such time as it is required, while also acknowledging that the sun does not always shine, wind does not always blow, and waves can vary in strength. Step forward Scottish battery company Invinity valued at GBP90 million and AIM listed with the energy (sorry) and vision to become a world leader in battery tech.

GBP/USD 1.3561.

Don’t Shut Me Down

This day in 2021 after an absence of nearly 40 years, ABBA returned to the Top 10 in the charts with this number which was last up there in December 1981. 40 years on the words do not stand up to much examination – well hardly any – but they definitely qualify as being fittingly Swedishly moody.

A while ago, I heard the sound of children’s laughter
Now it’s quiet, so I guess they left the park
This wooden bench is getting harder by the hour
The sun is going down, it’s getting dark
I realize I’m cold
The rain begins to pour
As I watch the windows on the second floor
The lights are on, it’s time to go
It’s time at last to let him know

I believe it would be fair to say
You look bewildered
And you wonder why I’m here today
And so you should, I would
When I left, I felt I’d had enough
But in the shape and form I appear now
I have learned to cope
And love and hope is why I am here now

And now you see another me, I’ve been reloaded, yeah
I’m fired up, don’t shut me down
I’m like a dream within a dream that’s been decoded
I’m fired up, I’m hot, don’t shut me down
I’m not the one you knew
I’m now and then combined
And I’m asking you to have an open mind
I’m not the same this time around
I’m fired up, don’t shut me down

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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