Morning Brief – EU Wage Growth

Humphrey Percy
Chairman and Founder
Fri 19 Jan 2024

EU Wage Growth

In recent years wage growth has been the Cinderella of the inflation index but it now it is more a case of militant tendency when it comes to pay settlements. The wage growth pencilled in by the ECB consistent with their inflation targeting is 3%. Clearly the German railway workers’ union has not seen the memo- they have turned down 11% and a shorter working week- and nor has France’s EDF (Electricite de France) whose union is threatening to strike unless they get 6%. The key development in Europe is the return to popularity of the trade unions which with inflation having ratcheted up the cost of living so much, have a cause to fight for. 
EUR/USD 1.0890.

China Economy

If the health of an economy is reflected in the employment statistics, then China has good reason to suspend the employment index which has not been updated since June last year. There are 100 million Chinese aged between 16 and 24; of those 1 in 4 are unemployed. In a country of the size of China such a situation feeds through in many ways including most importantly the aspirations of this key age group.
USD/CNY 7.1915.

Oil Demand 2024

The Paris based International Energy Association sees oil demand rising by 1.24 million barrels per day due to economic growth and lower crude oil prices. OPEC unsurprisingly see it higher at 2.5 million. While the demand is understandable given the prospective interest rate cuts , the lower crude price looks more of an ask.
Brent $ 78.23.

I’ll be Back

A charity auction, an Audemars Piguet watch, German customs officers at Munich Airport and The Terminator: what could possibly go wrong? The eagle eyed officers had spotted that the opening bids at the auction were € 50,000 and Arnie was donating a watch. The Terminator was taken aside for 3 hours of questioning and Arnold Schwarzenegger was calm although bemused by the 3 hour bit, but still in trouble since travellers are obliged to declare money and any individual item of a value in excess of €10,000. 
GBP/EUR 1.1640.

The Boss

This day in 1974 at Kent State University, Ohio, USA USD4 would have been enough to buy a ticket to see Bruce Springsteen in concert when he opened for Black Oak Arkansas. Fans of the Boss who would like to catch him in the UK this Spring face paying USD 275 to see him on May 22 at the Stadium of Light in Sunderland. Here’s the song that defines the Boss.
Born to Run

In the day we sweat it out on the streets
Of a runaway American dream
At night we ride through the mansions of glory
In suicide machines

Sprung from cages on Highway 9
Chrome wheeled, fuel injected, and steppin’ out over the line
Oh, baby this town rips the bones from your back
It’s a death trap, it’s a suicide rap

We gotta get out while we’re young
‘Cause tramps like us, baby, we were born to run
Yes, girl, we were
Wendy, let me in, I wanna be your friend
I wanna guard your dreams and visions
Just wrap your legs ’round these velvet rims
And strap your hands ‘cross my engines

Together we could break this trap
We’ll run ’til we drop, baby, we’ll never go back
Oh, will you walk with me out on the wire?
‘Cause, baby, I’m just a scared and lonely rider

But I gotta know how it feels
I want to know if love is wild
Babe, I want to know if love is real
Oh, can you show me
Beyond the Palace, hemi-powered drones
Scream down the boulevard
Girls comb their hair in rearview mirrors
And the boys try to look so hard

The amusement park rises bold and stark
Kids are huddled on the beach in the mist
I wanna die with you, Wendy, on the street tonight
In an everlasting kiss
The highway’s jammed with broken heroes
On a last chance power drive
Everybody’s out on the run tonight
But there’s no place left to hide

Together, Wendy, we can live with the sadness
I’ll love you with all the madness in my soul
Oh, someday, girl, I don’t know when
We’re gonna get to that place
Where we really wanna go
And we’ll walk in the sun
But ’til then, tramps like us
Baby, we were born to run
Oh honey, tramps like us
Baby, we were born to run
Come on with me, tramps like us
Baby, we were born to run

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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