Humphrey Percy Chairman and FounderWed 17 Jan 2024
The greatest risks to the US economy in 2024 at least according to 1200 US business leaders polled last week are in order as follows: Recession, Inflation and Interest Rates. Nothing unexpected there. However tacked on to the end was the fourth greatest risk at least to domestic US corporate chiefs, although outside the US, it would rate a higher ranking: political risk and more particularly political polarisation making government much harder. That would look after Monday night’s Iowa out turn to be more than an afterthought risk and one that is looking more likely to overshadow the US and its business prospects.
UK Wage Growth
The news that UK wage growth fell more than expected to 6.6% for the period September to November 2023 down from 7.2% in the previous period, was on the face of it good news for UK inflation. Except in the topsy turvy world we live in, the market concluded that rates would therefore fall sooner and faster than previously anticipated. That meant the GBP sold off smartly.
With no sense of irony two stories about USD popped up yesterday evening. The first was one that might well have been written and published a year ago with the theme that the Dollar’s days were numbered and it would be increasingly replaced by EUR, CNY and other BRICS currencies including INR. The second one reported that USD had strengthened and was at a 2 month high after reports emerged suggesting that the Federal Reserve was less urgent in its view of interest rate cuts in the USA than the wider market. Cue USD buying. And that really sums up the argument: for every fan of alternative currencies and Crypto, there are just as many if not more of the status of USD as the world’s reserve currency. That leaves the ebb and flow of interest rate expectations to determine the short term fortunes of USD.
In case you missed it Bobi was a Portuguese dog that held the title of the world’s oldest dog at 31 years and 163 days. That was until October last year when Bobi departed this world for Dog Heaven. The (strict) monitors at GWR or Guinness World Records however are now holding a stewards’ enquiry as there is some doubt as to whether Bobi was quite as old as it was claimed. Should his title be removed, it looks good for Spike from Ohio. Spike is a relatively youthful chihuahua at 23 years. Woof.
And to continue the canine theme, it was this day in 1994 that Donny Osmond, teenage frontman heartthrob of family band, The Osmonds donned a pair of boxing gloves and stepped into the ring in Chicago with Danny Bonaduce of the equally syrupy band, The Partridge Family for a charity bout. The unmemorable boxing goes largely unreported but doubtlessly hairspray sales went through the roof when Danny Bonaduce won the match on a split decision.
And they called it puppy love Oh, I guess they’ll never know How a young heart really feels And why I love her so
And they called it puppy love Just because we’re in our teens Tell them all, please tell them it isn’t fair To take away my only dream
I cry each night my tears for you My tears are all in vain I’ll hope and I’ll pray that maybe someday You’ll be back in my arms once again
Someone, help me, help me, help me please Is the answer up above How can I, oh how can I tell them This is not a puppy love
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 […]