Oil WTI easier at $56.32, FTSE at 7134 and Dow at 25,819. GBP has given up the gains made last week and is now back to previous levels against USD and EUR as markets weigh the likely path towards 29-03-19 and more immediately to 12-03-19.
With just over a week to go until the key votes on Brexit next week, the schematic below describes the path towards resolution on the past months of turmoil in UK politics which has flowed through into world markets given not only the effect on the UK and GBP but also the impact on the Eurozone. What the chart does NOT show is what might happen in the words of PM Harold Macmillan when asked what he most feared as a politician: “Events dear boy, events.” With the previous history on Brexit, markets and clients would do well to bear that in mind!
Supermarkets and Brexit Deal-less: Spam, Spam, Spam?
Taking our minds neatly off the competitive pressures that they are all under all the way from M&S to Sainsbury’s (perhaps with the exception of Tescos which is making a stronger fist of things than some others,) we are being warned by supermarket chiefs that we might face shortages of fresh food together with price rises and fewer food choices if we Brexit with NoDeal.
Logjams at the borders will cause problems for lorries backed up with fresh produce becoming …less fresh. The last time we remember similar problems with food supplies was during the fuel protests of 2000 which forced some supermarkets to ration milk and bread.
Britain imports approximately 40% of its food with some coming in by airfreight but most by road and most via Dover. At peak times 130 lorries per day come through Dover just with citrus fruit.
While some food with a longer shelf life can of course be stockpiled, options are limited on fresh produce. In the short term we will all have to get used to eating an English apple rather than a Spanish orange. However markets always self correct so don’t expect Spanish suppliers to shrug their shoulders and leave their exports rotting in the sun!
Meanwhile dust off your memories and watch the Monty Python Spam sketch
-it might just come in useful!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Dollar Correction
Charles Porter
Tue 21 Jan 2025
Dollar Correction The infamous grab, hold, pull repeat handshake of President Trump almost sent several tumbling down during his inauguration at the US Capitol yesterday. Meanwhile, the actions and rhetoric surrounding his inauguration categorically did send the US Dollar lower following weeks of strong appreciation. Volatility had been expected moving into Trump’s inauguration yesterday. Whilst […]
Daily Brief – Reckoning Days
Charles Porter
Tue 14 Jan 2025
Reckoning Days Despite it being less than one week until Donald Trump’s inauguration, markets are still fixated on the evolution of the UK’s bond market and its currency. The Chancellor may well have been hoping for some distracting headlines from the incoming President-elect. Unfortunately for her, those that have come from the Trump administration and […]
Daily Brief – Markets In Reverse – Inflation to the Rescue
Charles Porter
Thu 16 Jan 2025
Markets In Reverse – Inflation to the Rescue Particularly in the case of the beleaguered GB Pound, it may be time to do away with the textbook. Instead of attracting further demand as UK yields have risen, GBP has registered one of its worst starts to a year on record. It is a narrative of […]
