Hard Brexit and the current market environment
Now that markets have dissected the UK Parliament vote on Thursday night, collective wisdom is pointing towards an increase in the likelihood of a hard Brexit ie a NoDeal Brexit.
Guess what? GBP currency traders do not like the sound of that while conversely the FTSE with its large component of Stocks with foreign earnings, ie beneficiaries of a weaker GBP, has rallied and closed Friday at 7236.
As we start the third week of February, the Dow stands at 25,883 the high of the day on Friday. Oil WTI is a whisker below $56 the high for the past month. Gold remains above $1300.
Prime Minister May has put in a strong plea for party unity. President Trump has waded into the row on the 800 or so Westerners turned terrorists who represent an awkward problem for their respective governments now that they want to go home and have their illegal terrorist activities forgiven and forgotten.
Saudi Crown Prince MBS has chosen this particular time at the point of the Munich security conference to demonstrate his own global statesman credentials by proposing a bid of £3.8billion for Manchester United. Inconvenient (for him) references to the Khashoggi murder in Istanbul last year will no doubt be raised again shortly.
Research in 2015 by Mintel reflected that only 13% of consumers chose Cheddar as a special occasion cheese. It’s not only all Brie and Camembert these days when it comes to that celebratory meal: while continental soft cheese sales rose 6.4% in the past year, continental hard cheese sales were up by 6.0% in the year to July 2018.
The men in white coats and clipboards at the Cheesery have totted up the numbers and it appears that 90% of people eat cheese monthly and 67% twice a week. If this trend continues, more and more cheese consumed in the UK will come from abroad despite more than 700 different cheeses being produced in the UK.
So continental cheeses in the same way as imported fruits such as the banana and the avocado before them are becoming an expected and increasingly large part of consumer expectations for that special meal.
The cheese monsters at SGM-FX have been putting their collective minds to this and are ready to provide cheese hedges to protect cheese importers and ultimately the British consumer from unwelcome price rises in the event that GBP weakens.
Will the next development be French Brie in British mousetraps? Sacre Bleu!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Opportunity for a weaker Dollar
Charles Porter
Thu 1 Jun 2023
Opportunity for a weaker Dollar The passing of month-end allows markets an opportunity to reassess currency valuations. Despite a cooling off within the Dollar as forecasted following the agreement between the White House and Kevin McCarthy, month end flows yesterday showed favourable conditions for a short-term Dollar resurgence. The beginning of June coincided with headlines […]
Morning Brief – Turkish Lira
Humphrey Percy
Wed 31 May 2023
Turkish Lira While President Erdogan removed the uncertainty overhanging the Turkish market by winning the election in the run off over the weekend, the news served to cement the certainty that nothing much was likely to change with respect to Turkish economic policy or indeed the subservient role of the Central Bank of Turkey to […]
Morning Brief – Did EURUSD miss the news?
Charles Porter
Tue 30 May 2023
Did EURUSD miss the news? Over the weekend, the President and the Speaker of the House of Representatives reached a much-awaited deal on the US debt ceiling. The impending constraint on debt could have forced the shutdown of government departments and precluded the US government from servicing costs and existing debts, triggering a default. The […]
