Morning Brief – Confident

Humphrey Percy
Chairman and Founder
Mon 9 Oct 2023


In what is an uncertain world, there was a certain reassurance to reading the comments from European Central Bank President Christine Lagarde yesterday. Firstly Mme Lagarde is confident that the 4% record high interest rates in the EU will succeed in getting the inflation genie back in the bottle and a return to the 2% target rate. Secondly she is relatively confident that going into the winter season that the EU is well placed for natural gas having succeeded in replenishing 90% of its reserves that had been depleted last winter. So that’s all right then. Without wishing to rain on the ECB President’s parade, the outlook for EUR according to the options market is far from rosy with the implication that EUR/USD is going to return to parity or break through the 1.00 level early next year.
EUR/USD 1.0585.

US Dollar

With last week’s surprisingly strong job figures in the USA, the market concluded on Friday night that a further rate rise might not be necessary, so USD sold off. Over the weekend, those same market sages have started worrying about this week’s US inflation figures and saying that the economic situation needs to be confirmed when they are released. Meanwhile 2 Year Treasury Bond Yields are at 5.15%, 10 years at 4.88% and 30 Years at 5.05%.
GBP/USD 1.2245.


While some pundits suggest that Gold has weakened a lot this year, it’s a mixed story: true that Gold has fallen USD 174 since the end of March but it is still USD 120 up on the year since October 2022. However with US Treasury yields as high as they are, the outlook at best is sideways rather than up.
Gold USD 1,833.


Leading the world in the large vegetable field Vince Sjodin from the Vale of Glamorgan, Wales not content with record breaking potatoes, marrows, tomatoes and pumpkins, has now smashed the world record for a cucumber: 1.2 meters long and 13.4 KG. Vince puts it down to having the right seeds. Difficult to argue with that or indeed him given his track record in the outsize vegetable field.
GBP/EUR 1.1560.

Je T’aime Moi Non Plus

Apart from being an all time great song sung by breathy duo Serge Gainsbourg and Jane Birkin, it provided a masterclass in getting it wrong by the following:
1. The record label which released it, Fontana who sold it for a song to Major Minor which promptly cleaned up.
2. The BBC’s Top of the Pops which banned it thereby ensuring instant and permanent success.
3. America where it did not even chart.

Je t’aime, je t’aime
Oh oui, je t’aime
Moi non plus
Oh, mon amour
Comme la vague irrésolue
Je vais, je vais et je viens
Entre tes reins
Je vais et je viens
Entre tes reins
Et je me retiens
Je t’aime, je t’aime
Oh oui, je t’aime
Moi non plus
Oh, mon amour
Tu es la vague, moi l’île nue
Tu vas, tu vas et tu viens
Entre mes reins
Tu vas et tu viens
Entre mes reins
Et je te rejoins

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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