La Belle France and La Bella Italia
The French Government in the past 3 years has been able to fund itself at between minus 0.75% and minus 0.25%- it now is at pretty much in the middle of that range. In other words, lenders to France are paying 0.50% for the privilege of lending the nation of La Belle France led by President Macron despite the rise of populism defined by Les Gilets Jaunes. Italy on the other hand over the past 3 years has funded itself at minus 0.25% and….plus 1.75% following the rise of populism defined by the Five Star Movement- it now stands at plus 0.50%. The question is: will populism in France feed through to the markets? And what does that mean for Europe and the European Project?
A fillip for FTSE up at 7151 last night on weaker GBP as realisation of likelihood of a resounding Government defeat for the Brexit deal dawned- subsequently confirmed by 149 votes. Gold steady at $1296. Oil at $56.93. While the result of the vote was not a surprise, it does mean that the likelihood of a NoDeal Brexit has materially increased given the inability of both the UK and the Eurozone to find common ground in the time that remains with the prospect of an extension dependant on their being real grounds to expect resolution in the next 3 months before the European Parliament returns following the May elections. Consequently, we are entering a period of uncertainty and greater and more frequent one day moves in GBP such as the one we saw yesterday.
Last week saw a monthly jump in the index of almost 6% the biggest rise since the 1980’s. So some rebound after a 2.9% fall in January plus shortages of housing plus a disproportionate number of sales in the South East of the UK which tend to be at higher prices are the reasons for this according to the economists. More likely it’s a combination of poor data and distortions due to the ongoing disastrous effects of Stamp Duty on the market-thank you George Osborne.
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Milan, Italy
Humphrey Percy
Wed 24 Apr 2024
Milan, Italy The City of Milan has a late night noise problem and so it has acted unilaterally to resolve it-Italian style. A ban on the sale of take away food including ice cream and pizza after midnight is being imposed to protect the “peace and health of residents.” Here in the UK late night […]
Morning Brief – Coal tinted spectacles
Charles Porter
Tue 23 Apr 2024
Coal tinted spectacles If you had to boil down the global economy into one category from the options of bad/fair/good, what would you choose? We all experience the economy vastly differently down to an infinite number of variables. But by and large the current phase we are in, characterised by strong global growth rates, record […]
Morning Brief – British Pound
Humphrey Percy
Mon 22 Apr 2024
British Pound Reports that the UK may cut its interest rates before the USA cut their interest rates were the final straw this past week for Sterling. A slew of less than helpful inflation, employment and finally retail sales saw GBP weaker , but then the suggestion that with the background of that less than […]
