Daily Brief – Runners and Riders

Runners and Riders

Unsurprisingly, this week will see the culmination of the frantic lobbying efforts of Labour Ministers and MP’s to capture the attention and approbation of incoming new Prime Minister Andy Burnham. There are of course the biggest prizes of all the great offices of state, but it is the next Chancellor of the Exchequer’s identity that is sucking most of the oxygen from the febrile Westminster atmosphere at present. That is accompanied by the energy sector pushing as hard as it can for a lifting of the present ban on new drilling licenses in the North Sea and all the other net zero measures worshipped by Energy Minister Ed Miliband. Currently, Andy Burnham is reported to be considering relaxing some of those restrictions on the energy industry giving rise to the theory that Ed Miliband will be moved from Energy to become Chancellor of the Exchequer. This comes under the heading of “be careful what you wish for”. The other major “new” appointment will likely be that of the de facto Deputy PM since he/she will be the PM’s appointee for No 10 North and which given the shift in power, emphasis, and influence northwards is keenly anticipated.

GBP/USD 1.3404.

European Holiday Value

If you have been too busy to book a summer holiday and are casting around for some value-clue, avoid the Côte d’Azur, the Costa Smeralda and Italy’s Portofino. Unsurprisingly, Turkey offers the very best value and on average costs 60% of the EU average for hotels and restaurants, but that assumes you are not going to order anything much in the way of alcohol as, if that is not the case, Turkey’s pricing changes a lot being the most expensive European destination for alcoholic beverages. Croatia at 78% of the EU average represents good value with its stunning Adriatic coastline and pretty islands, but it is Portugal which wins the overall price versus quality trade off at 74% of the EU average. As ever with statistics they can be misleading since there are plenty of expensive destinations in Portugal, but the average is brought down with many inexpensive and out of the way places.

EUR/GBP 0.8521.

Gold and Oil

In case you missed it, Gold has given up more than 25% from its heady high of USD 5589 and currently stands at USD 4113. American banks are still calling for a return to USD 5700-6000. What do they know? Nothing much: they are gloomy about economic uncertainty and geopolitical fallout and given that markets always overshoot in both directions they have a case. Brent Oil at USD 76 reflects the current off switch on the US Iran peace deal. 6 months out it looks broadly unchanged but 12 months the expectation is at least 10-15% lower. But that is based on over supply and no disruptions. Both look questionable.

EUR/USD 1.1425.

Rain Dance

It may seem far-fetched today and after a run of baking days in the heat dome but it won’t last. The first rain indicator landed in my inbox on Saturday when I was reminded to observe the hose pipe ban implemented by SE Water in Kent. The second will be the appointment by new PM Andy Burnham of a Minister for the Drought in the next couple of weeks. If you don’t believe me, check out Denis Howell in 1976 who lasted in post as Minister of the Drought for about a week.

EUR/JPY 184.55.

(Everything I Do) I Do It For You

This day in 1991 Bryan Adams was Number One with this song which had assured continuing success given that it featured in the 1991 hit must see film Robin Hood Prince of Thieves starring male cheesecake Kevin Costner.

Look into my eyes
You will see
What you mean to me
Search your heart
Search your soul
And when you find me there
You’ll search no more

Don’t tell me
It’s not worth tryin’ for
You can’t tell me
It’s not worth dyin’ for
You know it’s true
Everything I do
I do it for you

Look into your heart
You will find
There’s nothin’ there to hide
Take me as I am
Take my life
I would give it all
I would sacrifice

Don’t tell me
It’s not worth fightin’ for
I can’t help it
There’s nothin’ I want more
You know it’s true
Everything I do
I do it for you, oh yeah

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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