Daily Brief – USA

USA

The question being posed over the weekend is whether the Federal Reserve has left it too late to engineer a soft landing for the US economy by not cutting interest rates last week. July’s unemployment has risen to 4.3% the highest level for 3 years. Having said that GDP has seen growth of an annualized 2.8% in Q2 but as highlighted in recent Daily Briefs, the challenges faced by the Federal Reserve are complex and often conflicting. So instead of a glide path with 25bp reductions, it may be that the Fed gets bounced into catch up in September with a 50bp cut.

EUR/USD 1.0911.

PPR

Put down your list of financial  acronyms: PPR stands for Peste des Petits Ruminants which is better known as goat flu. A virulent disease, PPR can wipe out 70% of livestock and it has been detected for the first time in Greece which is causing big problems for farmers already struggling with soaring temperatures and a lack of rainfall. Those temperatures have sparked multiple fires in Evia, Greece’s second largest island. Greece is also in the news over the weekend due to a luxury yacht sinking near Kefalonia which is off the West coast of the Greek mainland. Red faces all round due to a crew member leaving a door open near the waterline which meant that when sea conditions became choppy, water poured in and the yacht sank. Whoops.

EUR/GBP 0.8521.

Shaken Not Stirred -yet

Last week it was time for Aston Martin to raise more debt to bolster its loss making performance. USD 90m at 10%pa and GBP65 million at 10.375% pa both for 5 year finance. A strong second half is forecast predicated on the success of the Vanquish and the Valiant Special models.

GBP/USD 1.2801.

If You Go Down To the Woods Today

Shock horror: following the EU measures to re-introduce wolves to the forests of the Union, they have multiplied in number and now present a risk. There are now estimated to be 19000 wolves in the EU 27 and at least 1000 in each of Poland, Romania, Spain, Italy, Greece and Bulgaria. So now parents are being warned of the dangers of taking children to forested areas-and that is just in the Netherlands not generally known for either forests or wolves.

USD/JPY 146.53.

Like a Rolling Stone

This was the Bob Dylan number that beat off all challengers in 2005 to top the poll for being the one that changed the world the most from all music, films, TV shows and books. Some purists might disagree with that diagnosis, but it would be churlish to deny the contribution that the one time Robert Zimmerman has had on the world’s culture and arts scenes in the past 60 years.

Once upon a time you dressed so fine
Threw the bums a dime in your prime, didn’t you?
People call say ‘beware doll, you’re bound to fall’
You thought they were all kidding you
You used to laugh about
Everybody that was hanging out
Now you don’t talk so loud
Now you don’t seem so proud
About having to be scrounging your next meal

How does it feel, how does it feel?
To be without a home
Like a complete unknown, like a rolling stone

Ahh you’ve gone to the finest schools, alright Miss Lonely
But you know you only used to get juiced in it
Nobody’s ever taught you how to live out on the street
And now you’re gonna have to get used to it
You say you never compromise
With the mystery tramp, but now you realize
He’s not selling any alibis
As you stare into the vacuum of his eyes
And say do you want to make a deal?

How does it feel, how does it feel?
To be on your own, with no direction home
A complete unknown, like a rolling stone

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter