Some of the market’s Great Minds spent yesterday afternoon debating whether Japan could get away with raising interest rates at the same time as the Central Banks from the other major markets are starting to cut their interest rates. In short, Japan can and probably will, since its monetary policy has been effectively in a bubble of its own for many years now. Yesterday the market was particularly exercised because of one word the Bank of Japan Governor used. Rather than saying if the BoJ were to raise interest rates, he said once the BoJ raised interest rates. What that means for GBP/JPY is a much weaker exchange rate -off over 3 Yen at GBP/JPY 181.22.
One of the largest coffee traders in the world, Mercon with operations in the largest coffee producing countries in the world such as Brazil and Vietnam and Central America, has filed for bankruptcy in the USA last night following its financing banks having declined to continue extending credit. The reasons given are ongoing disruption following the pandemic, frosts, drought, rising interest rates and price volatility. While all those sound ultra reasonable reasons for any business, for a coffee trader, those are the very staples of their profitability or the opposite of course….so it sounds as if they have been long and wrong and very probably caught and short as well. In 2023 the Euronext Robusta Coffee contract started the year at $1,900 before rising to $2,900 in June and is now back to $2,591.
UK House Prices
With a rise of 0.5% in November in the Halifax Index reported, it would be misleading to draw any conclusions about either the change given the regional discrepancies or indeed the direction of travel in 2024 with predictions broadly ranging from plus2% to minus 2%. Unless of course you are in the UK’s South East which has dropped 3.8% in 2023.
Fans of Taylor Swift known as Swifties are getting ready to celebrate her 34th birthday on December 13. Taylor Swift is doubtless also celebrating her newly minted billionaire status and the fact that she is the only female artiste ever to have 4 albums in the Top 100 at the same time. Meanwhile her current concert tour is earning Taylor Swift between USD 10 and 13 million a night. Plenty of cheer there!
Only in America: “a beverage led concept… inspired by nostalgia” is the strap line for an initially small chain that McDonalds is trialling in Texas, USA. We would probably call it an old fashioned coffee shop in English, but if it takes hold, McDonalds will be taking the battle to Starbucks.
Marriage By Numbers
This day in 2011 Irish singer Sinead O’Connor celebrated her 45th birthday by marrying her 4th husband in a 10 minute drive-thru ceremony in Las Vegas. The couple split up 16 days later. That year Sinead achieved just 1 Top 40 single but what a smash that one was:
Nothing Compares to You
It’s been seven hours and 15 days Since you took your love away I go out every night and sleep all day Since you took your love away Since you been gone, I can do whatever I want I can see whomever I choose
I can eat my dinner in a fancy restaurant But nothing I said nothing can take away these blues ‘Cause nothing compares Nothing compares to you
It’s been so lonely without you here Like a bird without a song Nothing can stop these lonely tears from falling Tell me baby, where did I go wrong? I could put my arms around every boy I see But they’d only remind me of you
I went to the doctor, guess what he told me Guess what he told me He said, “Girl you better try to have fun, no matter what you do” But he’s a fool ‘Cause nothing compares, nothing compares to you
Discussion and Analysis by Humphrey Percy, Chairman and Founder
British Pound There really was something for everyone in Bank of England Governor Bailey’s comments yesterday. Firstly he said that the BoE was comfortable with the market’s view of the decline in UK interest rates -meaning one presumes both on extent and timing. Then he followed it up by saying that the UK labour market […]
EU Commission Instead of November’s EU growth forecast of 1.2%, the EU Commission has revised back its prediction to 0.8% for the growth in the gross domestic product of the 20 countries. The 2025 year however will see growth of 1.5%. Back to 2024, it is difficult for the EU bloc to grow much when […]
Germany With the German IFO or Business Climate Index down from 90.10 a year ago to its current level of 85.20, Germany’s business leaders are more realistic about the outlook for Europe’s largest economy than their political leaders. Chancellor Scholz wisely passed the speech making duties yesterday to one of his cohorts who managed with […]