At the end of 2018, Italy agreed a budget with Brussels and that sorted things out right? Wrong. Italy has debt of EUR 3 Trillion or 3 thousand billion. According to the OECD the Italian economy will contract in 2019 and Italian debt will grow to between 2.5 and 3% of GDP in 2019 despite agreeing a 2% limit with Brussels. Unemployment is forecast to reach 12% in 2019 and public debt will reach 134.8% of GDP. In a nutshell Italy is not making enough money-economic growth is negative- and is spending too much thereby increasing the deficit. Unlike Greece which is a small economy, Italy is the fourth largest European economy and is 30% larger than Russia. Italy will be back at the very top of the agenda in Brussels this year. Expect Italy to weigh heavily on the EUR.
Focus on the oil price with WTI sharply up at $63.08 on the back of civil war threat disruption to the supply in Libya. USD remains a better performer against developed market currencies and weaker against emerging market currencies. In the case of GBP on the back of PM May asking for a 30/6/19 extension and little cross party progress on Brexit over the weekend, GBP weakened in early Asian trading this morning.
Bad news for cat owners including moggy loving James of sgm-fx
Cats according to a study released last week recognise their own names but often ignore their owners when they call them, out of sheer bloody mindedness. It also turns out from a separate study that came out over the weekend (they are like number 11 buses these cat studies) that cat owners are significantly less happy than dog owners. Cheer up James it’s only Miaouw-day !
Discussion and Analysis by Humphrey Percy, Chairman and Founder
EU Inflation Paving the way for a 25bp rate cut tomorrow, EU inflation came in at 1.9% on the back of uncertainty, lack of consumer confidence and people sitting on their cash. So overall good on inflation but a sign of less good things in the EU. As ever, the overall inflation figure had some […]
British pound Sterling finds itself in the limelight and trading at its recent highs as somewhat improbably a couple of bolder market commentators have suggested the UK will benefit as a result of the disaffection with the USA and the USD at present. Those commentators have obviously not been following the commentary about UK Chancellor […]
UK Employment Real life consequences of policies that fulfil Chancellor Reeves’ agenda: this time we will not dwell on the plainly evident politics of envy stuff about targeting the higher earners, stuffing the non-doms, and even deciding to double tax those wishing to pay for private education or invest in property through second homes. This […]