Morning Brief – Central Europe

Central Europe

 

Leading hawks at the Hungarian and Czech central banks are setting the pace which means that with their pre-emptive anti-inflationary measures of rate rise programmes, their currencies respectively the HUF and CZK are likely to be the leading Eastern European currencies in the next few months. In third place comes Poland whose central bank is more dovish which means the PLN will strengthen but just not as much as the HUF and CZK versus EUR. At the other end of the scale is Romania where the Romanian Leu or RON is expected to weaken by 1.3% to 4.98 versus EUR. Central European economies are recovering well from the pandemic and manufacturing activity grew sharply in July despite supply chain problems acting as a drag on output.

 

China

 

Jittery markets sensitive to Chinese regulators’ comments on the following sectors: e cigarettes and spirits-both bad for you with disapproving statements about minors gaining access too easily to e cigarettes and liquor being linked to cancer; fertilizer companies-investigation coming in respect of suspected price manipulation. This followed comments on property, technology and education which are all vulnerable to state intervention. Just for good measure the gaming industry has also come under fire for its adverse impact on Chinese youth and the description of video games as “spiritual opium.” Tencent Holdings, China’s largest gaming company duly lived up to its name by falling….10%. USD/CNY at 6.46.

 

Canada

 

The largest trade surplus for 13 years was posted by Canada yesterday for June-CAD 3.23 billion in fact-on the back of higher amounts of production of oil and cars. Markets had expected a surplus of only CAD 0.7 billion so unsurprisingly on the back of this and exports up 8.7% at CAD 53.76 billion, the CAD was half a cent stronger at USD 1.25.

 

Procul Harum

 

Previously named The Paramounts and based in Southend, Essex, England having been formed in 1967, such was the innocence of the age that rock band Procul Harum came into being having been named after a Burmese cat whose cat fancy name was…Procul Harum. Their best known hit is of course Whiter Shade of Pale, but this one comes a close second even if it is hard to dance to, so sway along, as we all did to: Conquistador

 

Conquistador your stallion stands in need of company
And like some angel’s haloed brow
You reek of purity

I see your armor plated breast
Has long since lost its sheen
And in your death masked face
There are no signs which can be seen

And though I hoped for something to find
I could see no maze to unwind

Conquistador a vulture sits, upon your silver sheath
And in your rusty scabbard now, the sand has taken seed
And though your jewel-encrusted blade
Has not been plundered still
The sea has washed across your face
And taken of its fill

And though I hoped for something to find
I could see no maze to unwind
And though I hoped for something to find
I could see no maze to unwind

Conquistador there is no time, I must pay my respect
And though I came to jeer at you
I leave now with regret
And as the gloom begins to fall
I see there is no, only all
And though you came with sword held high
You did not conquer, only die

And though I hoped for something to find
I could see no maze to unwind
And though I hoped for something to find
I could see no maze to unwind

And though I hoped for something to find
I could see no maze to unwind

 

 

Have a Great Weekend!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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