Daily Brief – EU Stagflation

EU Stagflation

With inflation blipping up and business activity turning down, the S word is back on the table. Not only manufacturing but also the services sector fell sharply in November with the Purchasing Managers Index at its lowest level this year. The EUR facing a rampant Dollar is increasingly undermined by its own weakening economy but does, positively for the UK currency, result as a consequence presently keep GBP above the €1.20 level.

EUR/USD 1.0418.

Congress

With a strong chance of overturning India PM Modi’s ruling but increasingly unpopular BJP Party, opposition Congress Party have not one but two candidates from India’s most famous political dynasty. Brother Rahul and sister Priyanka Gandhi whose father(Rajiv), grandmother (Indira) and great grandfather (Mahatma) were all PM and of course were all tragically assassinated. Rahul looks to be the pick but his sister is moving up the rankings and is becoming both better known and popular so may yet pick up the baton in future to run for the office of PM.

EUR/JPY 161.24.

EU Gas

Still way below the prices in 2022 but EU Natural Gas prices are much higher: 16% up in November to date on a mix of supply side concerns, cold weather and geo political tensions. The EU has vulnerability to gas supplies and consequently prices in the wake of the decision to hitch its wagon to Russia as its main source of gas. Worth also looking at the levels of EU reserves: they are depleted with stocks falling below the 5 year average. Prices are on a 1 year high and look unlikely to fall as we head (further) into winter.

GBP/EUR 1.2030.

NEWBrew

Delegates at COP29 can try a Singapore beer which is displayed on the Singapore stand at the climate summit in Baku: NEWBrew. Low carbon footprint-definitely not having travelled from Singapore to Baku – but moving on swiftly from that, its eco credentials are right up there since it’s made from “waste water” which has less charmingly earned it the less than charming sobriquet of “sewage beer”. Costing SGD7 or EUR5 per can in a Singaporean supermarket NEWBrew is not for the faint hearted nor the poor eco warrior.

GBP/USD 1.2530.

True Colors

This day in 1986 for the first time in Billboard history the top 3 spots were filled by female artistes: Cyndi Lauper with True Colors, Tina Turner with Typical Male and Janet Jackson with When I Think Of You.

You with the sad eyes
Don’t be discouraged
Oh I realize
It’s hard to take courage
In a world full of people
You can lose sight of it all
And the darkness inside you
Can make you feel so small

But I see your true colors
Shining through
I see your true colors
And that’s why I love you
So don’t be afraid to let them show
Your true colors
True colors are beautiful
Like a rainbow

Show me a smile then
Don’t be unhappy, can’t remember
When I last saw you laughing
If this world makes you crazy
And you’ve taken all you can bear
You call me up
Because you know I’ll be there

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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