Morning Brief – British Pound 

British Pound 

Trading at a 1-year high, British Pound is buoyed by the market being pretty much unanimous on a 25 bp rise in rates tomorrow by the Bank of England. 98% of respondents to a survey have opined as such. The three choices are No Change, plus 25bps or plus 50bps so it is perhaps unsurprising given the inflation background for the consensus to be a rise of 25bps. However, if the unthinkable were to occur, and the BoE elects to keep rates unchanged, British Pound would fall sharply. Otherwise stand by on Thursday for the 12^th rise since December 2021.

GBP/USD 1.2620.

China

Post Covid, markets need strong stomachs given the sharp gyrations in China’s economic releases: yesterday April exports came in at +8.5% after a March figure of +14.8%. Inflation is due out tomorrow but is expected to slow to a year-on-year increase of 0.3%. What all this adds up to is what Goldman Sachs describes as “residual seasonality” which is translated as meaning the return to more normal economic activity following the Lunar New Year Festival. Another way of interpreting this is that China has passed the fastest stage of its economic bounce back.

USD/CNY 6.9270

Zero Deposit UK Mortgages

Aimed squarely at Generation Rent, there are a number of zero deposit mortgage products now on offer, but the latest from Skipton Building Society offers mortgages at 5.49% which is more expensive than other products and simply requires a record of a year’s on time rental payments. Since 2001 the number of households renting rather than buying their properties has doubled and now 1 in 5 households rent, hence the initiative from mortgage providers to help renters get on to the property ownership ladder.

Alberta, Canada 

Apart from oil, Alberta is known for its cattle ranches and some magnificent ski areas West of Calgary around Banff. But featured in the news, the sheer scale of the oil wildfires in Canada’s Alberta Province is worthy of mention: 98 separate fires of which a third have been designated as being out of control. It is estimated that it will take several months before they burn themselves out and meanwhile 30,000 people have had to flee their homes. To put this in perspective 319,000 barrels per day of oil production are affected or 3.7% of total Canada oil production. 

USD/CAD 1.3395

Eurovision

Last night we supported our colleagues in Malta by rooting for the Malta Eurovision entry, The Busker at the semi-final stage. All to play for and by the look of it, it’s going to be a torrid week leading up to Saturday’s Grand Final. While Malta did not make the cut in the end, the standard in this year’s competition is as consistent as ever.

EUR/USD 1.0965.

Jim Morrison and The Doors

This day in 1968 frontman Jim Morrison incited a riot at a Doors concert in Chicago. All it took was “jumping and writhing and sticking a maracas down his pants(trousers)” and the crowd went wild. That was 1968 for you. Jim Morrison shone brightly as a star before flaming out tragically in Paris on July 3 1971. Here is one of his finest songs: Riders on the Storm:

Riders on the storm
Riders on the storm
Into this house, we’re born
Into this world, we’re thrown
Like a dog without a bone
An actor out on loan
Riders on the storm

There’s a killer on the road
His brain is squirmin’ like a toad
Take a long holiday
Let your children play
If you give this man a ride
Sweet family will die
Killer on the road, yeah

Girl, you gotta love your man
Girl, you gotta love your man
Take him by the hand
Make him understand
The world on you depends
Our life will never end
Gotta love your man, yeah

Riders on the storm
Riders on the storm
Into this house, we’re born
Into this world, we’re thrown
Like a dog without a bone
An actor out on loan
Riders on the storm

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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