Morning Brief – German Manufacturing Sector

Humphrey Percy
Chairman and Founder
Fri 8 Sep 2023

German Manufacturing Sector

Until recently the powerhouse of both Germany and Europe, the manufacturing sector has suffered a difficult year with falling orders, lower output and high prices. Now the July production figures have been released and at a worse than expected fall of 0.8% they have done nothing to cheer the sector.

EUR/USD 1.0700.

UK Government Wind Auction

It looks as if someone has got their sums wrong: in the past, the auction mechanism has worked fine whereby energy companies bid for 15 year contracts to operate wind turbines and supply energy at a cost to the UK National Grid. However the electricity price that they will receive under the new auction is capped at a level that makes the wind turbines uneconomic to build given the cost of steel and operate given the revenues on the supply of electricity. Result: the auction is likely to flop. A prime example of being out of touch with market movements. As some wag observed of the pricing in the FX market which is notorious for its continuous price movements: they are not door numbers.

GBP/EUR 1.1635.


A surprise cut of 75bps instead of the expected 25bps by the Polish Central Bank yesterday sent the Zloty sharply lower. Although the reason given by the National Bank of Poland of inflation falling faster than expected might be credible, the absolute level of 10.1% somewhat undermined that excuse. Look no further than there being parliamentary elections on October 15 rather than economic logic for the cut.

USD/PLN 4.2860.

IAA Motor Show in Munich

This week there have been a number of very small cars on display which resemble the Bubble Car of the 1960’s. First off the chocks was the Italian Isetta, followed by the Swiss Microlino and the Italian-Chinese Yoyo from XEV. All of these cars are aimed at the European city market due to the small streets and lack of parking. In case you are wondering, the cheapest Microlino is a touch below EUR 18,000.

Play That Funky Music

This day in 1976, the band Wild Cherry enjoyed a smash Number 1 with this number that has been getting party people to their feet both at the time and ever since:

Hey, do it now

Hey, once I was a boogie singer
Playin’ in a rock-and-roll band
I never had no problems
Burnin’ down the one-night stands

And everything around me
Got to start to feelin’ so low
And I decided quickly
Yes, I did
To disco down and check out the show

Yeah they were dancin’ and singin’
And movin’ to the groovin’
And just when it hit me
Somebody turned around and shouted

“Play that funky music, white boy
Play that funky music right
Play that funky music, white boy
Lay down that boogie
And play that funky music ’til you die.”

‘Til you die?

I tried to understand this
I thought that they were out of their minds
How could I be so foolish
To not see I was the one behind

So still I kept on fighting
Well, losing every step by the way
… we can do
I said, I must go back there
I got to go back
And check to see if things still the same

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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