The post WW2 economic power house that is Germany currently looks a bit dented with economic growth for full year 2021 predicted to be 3.7%. So far so good. However what has market analysts scratching their heads is yesterday’s news of ballooning borrowing but much reduced production due to both supply chain and also Covid issues. This has resulted in a budget deficit of EUR 80.9 billion for H1 2021 which for Germany’s previous adherents to always but always maintaining a balanced budget as a minimum, is a real shock and the worst performance since 1995. Economists are now waking up to the realisation that the damage inflicted on the German economy by that drop in production outweighs the impact of Covid despite the EUR 130 billion shot in the arm that Germany has received. 10 Year German Govt Bond yields at -0.48% and 3 month EUR borrowing rates at -0.32%. EUR/USD at 1.1740.
The largest companies in Asia are now expected to post their first Quarter on Quarter profit decline in 6 Quarters in the Q3 reporting season. The reason for this is down to the rise in the Delta Covid variant combined with the much lower vaccination rates in Asia. For example while shopping malls in Jakarta, capital of Indonesia have re-opened, shoppers must show a Covid vaccination certificate to gain entry. How much South East Asia’s economies suffer in the next Quarter will depend on whether they manage to roll out vaccination programmes. Vehicle sales in China have fallen almost 12% in July versus July 2020. Toyota of Japan has announced it will cut vehicle production by 40% due to chip shortages. USD/JPY at 109.70.
The English alpaca currently on death row having contracted TB, may take a crumb of comfort(if it’s not too late by now) from news just released about llamas in Belgium: in case you are wondering alpacas have small blunt faces with short ears while llamas have longer faces with banana sized ears. Back to Belgium: living there in Genk is a llama named Winter whose antibodies are being used in a search for treatment for Covid. Clinical trials are showing promising early results and the llama antibodies may well be key to supplementing vaccines by being used to treat hospitalised patients and also to protect those with weaker immune systems. Geronimo doubtlessly pricking up his (short) ears on this news. Those wishing to find out more and invest in this early stage bioscience should look up ExeVir. Those wishing to visit Winter will find the llama (with its banana sized ears) enjoying retirement in a private art and animal park in Genk.
Readers who enjoy 1960’s music will both recall and feel tempted to throw some shapes to this one: Locomotion. A hit for Little Eva released this day in 1962 and a song guaranteed to get absolutely everyone on to a dance floor at parties and weddings whether the Little Eva original or the Kylie Minogue cover:
“The Loco-Motion”
Everybody is doin’ a brand new dance, now
(Come on baby, do the Loco-motion)
I know you’ll get to like it if you give it a chance now
Come on baby, do the Loco-motion)
My little baby sister can do it with me
It’s easier than learning your A B C’s
So come on, come on, do the Loco-motion with me
You gotta swing your hips, now
Come on, baby Jump up, jump back
Well, now, I think you’ve got the knack
Now that you can do it, let’s make a chain, now
(Come on baby, do the Loco-motion)
A chug-a chug-a motion like a railroad train, now
(Come on baby, do the Loco-motion)
Do it nice and easy, now, don’t lose control
A little bit of rhythm and a lot of soul
So come on, come on, do the Loco-motion with me
Move around the floor in a Loco-motion
(Come on baby, do the Loco-motion)
Do it holding hands if you get the notion
(Come on baby, do the Loco-motion)
There’s never been a dance that’s so easy to do
It even makes you happy when you’re feeling blue
So come on, come on, do the Loco-motion with me
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Germany The German business climate was slated to rise in July but instead it fell in terms of both current and also future expected business conditions as reflected in the IFO Index made up of manufacturing, services, trade and construction sectors as submitted by 9000 firms. Germans wishing doubtlessly that they could be as strongly […]
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