Daily Brief – UK Quantitative Tightening

UK Quantitative Tightening

It’s hard enough making tough calls on whether to stick to a GBP100 billion bond selling program or not when debating with fellow members of the Monetary Policy Committee, but for Governor Bailey things have got a lot trickier with not 1 but no less than 4 ex MPC members calling for him to ratchet back bond sales. The logic is that cutting bond sales will cost the government less since it will reduce the cost of that debt. Well yes but that will in turn mean that the BoE is unable to reduce the post Covid multi crisis fuelled debt mountain which in turn is costing the UK a frightening amount to service. I did say it was tricky. Meanwhile interest rates remain unchanged.

GBP/USD 1.3557.

Muscular EUR

Following Wednesday’s Fed interest rate cut, the EUR remains strong at just over a cent below its recent high of EUR/USD 1.1920, a level not seen since 2021. Stephen Miran the newly appointed and POTUS propelled Fed Governor inevitably called for a 50bp cut rather than the 25bp that went through on the nod from the FOMC and the message for a further 2 X 25bp cuts this year is very much in line with expectations before this week’s Fed meeting. So whither EUR from here? Steady to up and that will of course depend on further pronouncements and economic releases in Euroland but EUR looks set fair for Q4.

EUR/USD 1.1776.

Hotel Chains

When it comes to the relative size of the top 10 largest hotel chains in the world, there is a vast gulf between the largest and smallest chains with the USA’s Marriott at the top with 1.5 million hotel rooms five times the size of fellow USA chain BWH, owner of Best Western. The UK comes in at number 4 with IHG owner of Intercontinental at just under 1 million rooms and France at number 7 with Accor at 800,000 rooms. Other than that, the top 10 is very much a US and China story.

GBP/EUR 1.1515.

Edinburgh

Edinburgh, Scotland’s oft touted moniker of the Athens of the North due to its distinctive skyline on the city’s Calton Hill is endangered for the most mundane of reasons: the municipal groundsmen have cut the grass surrounding the Calton Hill National Monument of Scotland so short that in concert with the un Scottish dry weather has killed the grass. That has caused the ground to break up and cause the Monument to subside leading to the need to underpin if not shore up the National Monument.

EUR/JPY 174.26.

Pictures of Matchstick Men

This day in 2005 the Book of Guinness World Records reported that perma tanned evergreen Brit band Status Quo had notched up more hits than any other band anywhere with 61 chart busters. Here is one of their seminal hits from 1968 – did I mention they were evergreen?

When I look up to the sky
I see your eyes a funny kind of yellow
I rush home to bed I soak my head
I see your face underneath my pillow
I wake next morning, tired, still yawning
See your face come peeping through my window

Pictures of matchstick men and you
Mirages of matchstick men and you
All I ever see is them and you

Windows echo your reflection
When I look in their direction now
When will this haunting stop?
Your face it just won’t leave me alone

Pictures of matchstick men and you
Mirages of matchstick men and you
All I ever see is them and you

You’re in the sky and with the sky
You make men cry, you lie
You’re in the sky and with the sky
You make men cry, you lie

Pictures of matchstick men and
Pictures of matchstick men and you

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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