Morning Brief – Japan

Japan

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.

Coffee

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.

GBP/EUR 1.1640.

Swifties

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!

GBP/USD 1.2575.

CosMcs

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.

EUR/USD 1.0785.

Marriage By Numbers

This day in 2011 Irish singer Sinead O’Connor celebrated her 45^th birthday by marrying her 4^th 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

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