Morning Brief – USA

USA

Reading some reports over the weekend one could be forgiven for thinking that the administering by the Federal Reserve of stronger economic medicine than say that of the BoE or the ECB, has had the desired effect and it’s a case of job done in the US. Far be it for us to be ne’er says or doom mongers, but that is a mistaken view.

Last week the US employment figures showed an unemployment rate of just 3.5% and that 528,000 new jobs had been created in July. On the face of it, that sounds good news and a matter of congratulation for the Federal Reserve.

Except it is not: such a tight labour market is inflationary and it is clear that wages are not keeping up with price rises which, when corrected will add further inflationary pressure into the economic picture. Simply put, consumer prices are up nearly 11% and both production workers’ and the total workforce’s wages are up by just over 5%.

So expect further rate rises and further USD strength.

USD/JPY 135.00 and EUR/USD 1.0190.

Suits You Sir?

Savile Row in London’s West End is the traditional home of the most elegant gents‘ tailoring and that means the suit. With the still lingering effects of LockDown, WFH and the tendency to replace a bespoke suit with a shell suit, Savile Row is in trouble and tailors are seeking ways to retain their client base by offering a different set of products. it has to be said that it is work in progress and meanwhile male dress code has become a minefield. Last month when the Governor of the Bank of England spoke at the annual Mansion House dinner, for the first time diners were in lounge suits rather than Black Tie. Good news for those readers determined to preserve their sartorial elegance by wearing well cut suits: prices have fallen sharply. GBP/EUR 1.1850.

Europe

More than 50,000 ATMs in Europe are operated by a company called EuroNet which despite its name is based in Kansas City USA. Readers holidaying on the Continent and savvily armed with their SGM-FX Prepaid Currency Cards should not undo that financial prudence by picking the wrong ATM.

In Italy especially last week reports of luckless Brits who are not SGM-FX customers sticking their bank credit or debit cards in the wrong ATMs and even before the heinous charges being charged by their banks, were stung GBP 53 for EUR 50.

That works out to a rate of GBP/EUR 0.94.

Cornish Riviera

Who apart from bolshie teenagers could possibly say that holidaying in Cornwall, UK could be dull in August 2022? Last week unusually a blue shark attacked a swimmer off Penzance on the South coast of the peninsula but if that was not enough, over the weekend a new menace was threatening bathers on the beaches on the North side of the peninsula near St Ives: spider crabs or Hyas Araneus for you Latin scholars with their distinctive long legs, pincer claws and venomous bite normally take refuge near the shore to protect themselves from predators, but not usually in such large numbers. However before you re-route for the madness that is Gatwick or Heathrow and attempt to book tickets for the Costa del Sol, relax: those spider crabs may give you a nip but are not dangerous to humans. Obviously a case of a(nother)slow news day.

Lonnie Donegan

Amazingly even though it was a lifetime ago pop-wise 61 years ago today, this little musical gem from LG went to Number 5. Amazing, given the lyrics and all we can surmise is that there was not much going on in August 1961. Here it is; Does Your Chewing Gum Lose It’s Flavour on The Bedpost Overnight?

Oh me oh my oh you
Whatever shall I do?
Hallelujah,
The question is peculiar
I’d give a lot of dough
If only I could know
The answer to my question
Is it yes or is it no?

Does your chewing gum lose its flavor
on the bedpost overnight?
If your mother says don’t chew it,
Do you swallow it in spite?
Can you catch it on your tonsils,
Can you heave it left & right?
Does your chewing gum lose its flavor
on the bedpost overnight?

Here comes a blushing bride
The groom is by her side
Up to the altar,
Just as steady as Gibraltar
The groom has got the ring
And it’s such a pretty thing
But as he slips it on her finger
The choir begins to sing:

Does your chewing gum lose its flavor
on the bedpost overnight?
If your mother says don’t chew it,
Do you swallow it in spite?
Can you catch it on your tonsils,
Can you heave it left & right?
Does your chewing gum lose its flavor
on the bedpost overnight?

Now the nation rise as one
To send their wanted son
Up to the White House, yes,
The nation’s only White House
To voice their discontent
Unto the Pres-I-dent
The bonny burning question,
What has swept this continent?
If tin whistles are made of tin,
What do they make fog horns out of?
Boom boom

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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