News of the death of I.M.Pei the inspirational architect at the age of 102 late last night. At this time of US Sino stresses it is worth looking at the simply staggering array of work produced by Pei the son of a bank manager born in Canton(Guangzhou) China and who arrived in the USA where he was educated at Harvard and MIT before building his iconic career. A true collaboration.
As highlighted last month the 2018 Italian debt position is 132% of GDP which is due to rise to 133% this year and 135% next. This is in contravention of EU rules that insist that such a deficit must be reduced but Italy is going in the opposite direction. 10 year Italian Government Bonds now yield 2.75% versus that of Germany’s which yield….Minus 0.7%. Deputy PM Salvini has indicated that Italy  is ready to break those rules which calls into question the EU financial rules structure and hence the value of EUR. Markets have sold EUR while they watch the Italian government and the EU closely as to how they deal with this.
Saudi Arabia and the Oil Price
In the past 8 years the oil price has halved to $60 and this has resulted in Saudi Arabia borrowing $10billion in 2016 to meet their budget gap and reducing supply to even maintain the oil price even at this level. Last week we wrote that there is the prospect of a $15 oil price due to huge advances in the production of shale oil combined with a reduction in demand. Growth in the Kingdom is still at 2% but contrast that with the healthy 9% that the aspirational and growing and young population had become accustomed to. A new (huge) revenue source is required and quickly. The size of the Saudi economy makes the rest of the Gulf economies a relative side show so expect that region to feature heavily in the news in the next five years-and not in a good way.
Monet and Les Meules-Giant Haystacks
In 1986 it would have taken a brave heart to have written a cheque for $2.53 million for this painting. In 8 minutes and with a reserve price of $55 million, that savvy investment from the heart paid off with someone this week paying $110 million for this depiction of a stack of harvested wheat. In the 33 years that the previous owner of the painting enjoyed the painting-assuming it was not stored in a vault-as a US resident it might have been a matter of supreme indifference to them that at one time that $110 million was worth GBP 92 million and at another GBP 52 million. Quite a swing. For the rest of us 25 quid at myartprints.co.uk will buy you a nice poster of a similar looking Monet haystack!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – France
Humphrey Percy
Wed 10 Apr 2024
France Quite simply the numbers do not add up for President Macron and his future in government, never mind La Belle France and its citizens : France is the third most indebted EU country after Greece and Italy with a debt to GDP ratio of 110.6%. In the past year the deficit has increased by […]
Morning Brief – EUR
Humphrey Percy
Mon 15 Apr 2024
EUR European Central Bank President Madame Lagarde made two bold statements last week: the ECB does not target exchange rates and the ECB is not dependent on Federal Reserve policy. While at one level both are sometimes true, it is brave to explicitly make those statements at a ECB press conference and more than risks […]
Morning Brief – Once, twice..
Charles Porter
Thu 11 Apr 2024
Once, twice.. Three times a Dollar rally? With the market having been delivered a strong jobs report last week, all eyes were on yesterday’s US CPI print for greater clarity on the macro data set. As a reminder, on Friday of last week, non-farm payrolls data showed the US economy added 303,000 jobs in March. […]
