Daily Brief – UK Election

Humphrey Percy
Chairman and Founder
Fri 5 Jul 2024

UK Election

With the UK Voting exit poll at 2200 last night confirming what all of the polls had been saying in the lead up to Polling Day, while the result was never in doubt, contained within it there will be plenty of surprises on seat changes although short term it is far too early for the markets to be impacted by the verdict of international market investors on the UK and its new government simply because there is nothing much yet in the way of detail for international investors to pronounce on. However it seems unlikely that new Chancellor Rachel Reeves will unveil a blitzkrieg of Liz Truss-like suite of policies, so on this the first morning of a new UK government the UK markets are calm.

GBP/USD 1.2770.


Just to recap, after the first round of voting the Right Wing RN won 33% of the vote; not enough for an outright win but enough to frighten the markets which concluded that in a departure from centrist politics either the Far Right or the Far Left would recklessly increase spending. This was followed earlier in the week by a relief rally when the CAC40 bounced back, government bond spreads eased and the EUR steadied and rallied. At the end of the week the thinking is that France will be less likely to see a Far Right victory and more likely to experience a period of political wrangling followed by a divided parliament making it hard for anything radical to be enacted. Government bond spreads have fallen from a high of 85bps over Germany to 69bps. Just two months ago this premium stood at 50bps and then blew out to 65bps after the EU elections. So where will the EUR go? A number of Moving Averages as well as the Relative Strength Index all point to key resistance in the 1.0790 area which for chartists puts a solid cap on the EUR at around 1.08. It will all come down to whether the Far Right does prevail or whether France enters a period of political paralysis after the vote on Sunday which for the benefit of doubt is BIG.

EUR/USD 1.0810.

Carbon Emissions

In the dash towards net zero by 2030, there is at least one of the Fab Five US tech companies that is moving in the wrong direction: Google which is the only one so far to own up. Google’s emissions have increased by 13% in 2023 and by 48% since 2019. The reason for this is being blamed on the growth of AI which uses up vast amounts of electricity. This surge in electricity needs in the frenzy that is AI to me at least is new news.

USD/JPY 160.61


Travellers in a rush and travelling to NYC in the next two months might consider staying in one of 6 NYC luxury hotels which are all offering free helicopter rides from JFK and Newark. These free helicopter rides come with a cost and in this case it is important to read the small print as NYC hotel rooms are always pricey and to qualify travellers will have to go for the more/most expensive accommodation which at those 6 luxury hotels will give them more than pause for thought. Instead of spending an hour or even two in a car, the helicopter will take just a few minutes so it will come down to just how much of a rush you are in. And how you value your time.

GBP/EUR 1.1823

That’s Alright

Fifty years to the day that the King released this song in 1954 it was re-released in 2004 when it promptly went straight to Number 3 in the charts thereby bringing a whole new generational audience to Elvis Presley’s memory and of course it goes without saying, a further influx of funds for the Elvis Presley Foundation.

Well, that’s all right, mama
That’s all right for you
That’s all right mama, just anyway you do
Well, that’s all right, that’s all right
That’s all right now mama, anyway you do

Well mama, she done told me
Papa done told me too
Son, that girl you’re fooling with
She ain’t no good for you
But, that’s all right, that’s all right
That’s all right now mama, anyway you do

I’m leaving town, baby
I’m leaving town for sure
Well, then you won’t be bothered with
Me hanging around your door
But that’s all right, that’s all right
That’s all right now mama, anyway you do

Ah da da dee dee dee dee
Dee dee dee dee, dee dee dee dee
I need your lovin’
That’s all right

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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