Morning Brief – Eurozone

Humphrey Percy
Chairman and Founder
Wed 31 Jan 2024


At the beginning of 2023 the ECB forecast was for the Eurozone to grow by 0.5%: hardly earth shaking but in the circumstances following the interest rate rises and the rocketing energy costs in 2022 and not at all to overlook the war in Ukraine, understandable. With no sense of schadenfreude -or the enjoyment of someone else’s unhappiness-it gives no pleasure at all to write that the latest figures show that for 2023 overall the Eurozone overall is flat in terms of growth as is Germany the largest component of the Eurozone. The Q4 Eurozone growth picture was also flat with Germany falling by 0.3% in Q4. The contrast to the USA is marked with the Q4 USA growth coming in at a truly muscular +3.3%. Given both its proximity to the UK and the size of the Eurozone market in global terms, from a London perspective, it is not only desirable but essential to have the 500 million population EU market growing, and growing significantly.
EUR/USD 1.0815

UK Own Goal

By scrapping tax free shopping for visitors, the UK Treasury has admittedly increased VAT by a decent amount. However the benefit of collecting that VAT has been outweighed by the loss to the Retail Sector in lost sales as visitors to this time zone chose to do their high end item shopping in the more friendly VAT regime of the EU which allows them to reclaim it. In addition there is the small matter of the latest estimate of how many visitors to Europe chose not to visit the UK at all. So a knock on effect to hospitality, transport, visitor attractions and ….
GBP/EUR 1.1720


At the end of 2022 we wrote how the Norwegian Sovereign Wealth Fund had somehow managed to lose NKR 1.64 Trillion. A different story in 2023 when, thanks to many well judged Big Tech investments, the Fund has reported a profit of NKR 2.22 trillion or USD 213 billion. A year ago USD/NKR stood at 10 and after two bouts of weakness where it broke 11, it now stands at 
USD/ NKR 10.47


Not to be a spoilsport but those advertisements we all see in the weekend press for investing in whisky are very carefully worded. Like any market, prices go up and down but the time to jump in and buy whisky and then flip it shortly afterwards is over. Why? Firstly whisky is normally sold at auction and profits on those auction sales are now taxable. Secondly due to the cost of living increases, there are more sellers emerging as they seek to crystallize profits which will cap any sizeable gains for others. Having said that, if one is prepared to take a long term view and not worry too much about it, whisky like any real asset can perform well. The not worrying too much part now comes in as, if all else fails, you can drink it without any tax consequences.
GBP/USD 1.2680

Bend Me Shape Me

This was The American Breed who this day in 1968 had a smash hit with this song that sold a million and went to the top of the charts. The American Breed went on to write Brandy, a song that Barry Manilow made famous as….Mandy!
You are all the woman I need
And baby, you know it (know it, know it, know it)
You can make this beggar a king
A clown or a poet (poet, poet, poet)

I’ll give you all that I own
You’ve got me standing in line
Out in the cold
Pay me some mind
Bend me, shape me
Anyway you want me
‘Long as you love me
It’s all right
Bend me, shape me
Anyway you want me
You got the power
You to turn on the light
Everybody tells me I’m wrong
To want you so badly (badly, badly, badly)
But there’s a force driving me on
I follow it gladly (gladly, gladly, gladly)

So, let them laugh, I don’t care
‘Cause I got nothing to hide
All that I want
Is you by my side
Bend me, shape me
Any way you want me
‘Long as you love me
It’s all right…

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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