Tag Archives: best currency rates

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Morning Brief – GBP

GBP

 

Having fallen to USD 1.14 last night, GBP has bounced off that level and against all currencies including EUR it is stronger this morning. It has been a very long week and it is not over yet(!). Just to remind you, GBP started the week on Sunday night in the Far East at USD1.24.

 

 

Oil

 

With WTI now at $25.62 and the Saudis and the Russians engaged in their high stakes game of poker with oil supplies and prices, the world’s capacity to store oil is being severely tested given the slow down in demand due to the economic impact of Covid19. As land based storage facilities are filling up, traders are looking to water based storage ie using oil tankers as storage rather than transport. Last week Glencore rented 1 of only 2 ULCC or Ultra Large Crude Carriers which can take 3 million barrels. Tanker rates are soaring for super tankers: a 6 month contract is now $85K per day or $15.3 million, while a 3 month contract is $150K per day or $13.5 million. Ship owners are enjoying the ride while OPEC members are nervously hoping that Russia and Saudi Arabia patch things up soon…..

For those of you who are wondering about the price history, I have gone back to the end of WW2 and yes that was 1 of the 3 times that WTI has been at this price level. The others being 1973 and 1999. At the other end of the scale, the high in the past 75 years was in June 2008 when it was $165.

 

 

E scooter and Bike rentals

 

The two largest companies Lime and Bird started by suspending their services in 11 states in the USA and have now suspended their services in many European cities with the restrictions in place on people movement. With e scooters already an increasing feature of many cities, many are hoping that there is some clear legislation regarding their usage and in particular which part of the road they should stick to.

 

 

A story for our times….

 

The last time that I can recollect people in this country stocking up or less charitably hoarding supplies of staple goods was much earlier in my foreign exchange career when I was trading Swiss Francs (CHF). On 24-04-80 President Jimmy Carter gave the go-ahead to invade Iran for the purpose of rescuing the 44 American hostages that Ayatollah Khomeini had detained. Operation Eagle Claw was launched and included the USS Nimitz the high tech symbol of the USA’s fearsome nuclear power as well as 8 helicopters. As is well known the mission was a conspicuous failure as only 5 helicopters made it to the landing zone. Upon the advice of his generals, Carter then aborted the mission which prompted the Ayatollah to declare it an act of God or as he put it “Angels of God” which had intervened to protect Iran, him and his theocratic government from the Great Satan.

Meanwhile back on the trading desk, all hell was breaking out and suddenly the CHF was the most wanted currency in the world and I was in the hot seat. The spectacle of the mighty USA humbled in this way prompted a run on bottled water, baked beans, candles, torches and batteries. Epilogue: Some of my then colleagues who “went long” baked beans were feeding them to their luckless children for the next 2 or 3 years.

 

 

Popular Mechanics Magazine

 

Amazingly this publication still exists today with a website and also is popular……despite or maybe because of their 1949 prediction: Computers in the future may weigh no more than 1.5 tons. SGM-FX’s IT guru, Michael shook his head sadly as he headed off home with his ultra light PC weighing just 1.35 kg. “Just tragic” he muttered.

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Down, down, down, down, down

Down, down, down, down, down

 

The chorus lyric of Flo Rida’s hit song echo the title of this market briefing. Two confessions: 1) yes I had to google the song to check 2) yes I spelled his name wrong. It might be erroneous to assume that just because the hit song was recorded in 2008 that Mr Rida was commendation on the global financial crisis and Great Recession he saw unfolding before him. But it seems more fun to do so than not, so I will.. After all, his co-star on the track (Ke$ha) even spells her name with a Dollar symbol! Coincidence?! Yeah probably.

 

Self-defamation and flippancy aside, the title of our budding musical FX analysts’ song was “right round”. My conviction to the belief of a sharp and deep recession followed by a period of rapid and unprecedented millennial growth mimicking a V-shape has only grown. I agree therefore with Flo Rida CFA and Ke$ha CPA, we should see valuations come right round.

 

Until the exogenous shock of Coronavirus the one world associated with GBP was Brexit. The most obvious feature of Brexit upon the Pound aside from a massive depreciation following the June 23rd referendum was a tight channel trade for more than three years. The range had a top (around 82.5 on a trade-weighted basis) that had been well tested and proven. It also had a firm bottom that had been reached and tested some three times in the course of post-referendum Britain at around 74 on a trade weighted basis. The average value was about 77.5 on the same scale. We have commented several times that this tight range is not sustainable and, eventually, volatility must come back into the underlying market and the Pound’s tight range broken. We also said that when the range is broken it won’t just crack, it will shatter and price action will be violent.

 

Following a rally at the end of 2019 following the result of the general election it looked as though the overdue range-break could have been to the upside. Unfortunately for Pound sellers and importers, the lack of a trade-deal and a stubborn PM in number 10 who was willing to leave without a deal capped Sterling’s gains in line but ultimately below the upper level. Given the above-average value of the Pound our expectation was for a correction at least towards the median and a move lower in Sterling. Well, we got it but the move was turbocharged by Coronavirus. As such we have broken the post-referendum price floor and Sterling is in free fall. See the graph below to see the Pound’s post-referendum performance and recent fall. Markets in normal times go up like an escalator. In bad times, they perform like a lift. Just in Sterling’s cash we’ve got a loose wire. Within the week, GBPEUR could well trade at 1-1.

 

On the desk we have been asked a lot why is Sterling taking the beating of international market’s angst at Coronavirus. Four reasons.

 

  1. Unpreparedness/Inaction

 

The UK government has been accused of inaction quite rightly. Despite a severe outbreak quarantine has not been enforced. Limitations on social interaction are value and not enforced. On top of that the amount spent and pledged by the UK government is pathetic in comparison with other developed European and US peers. Markets don’t like the UK government’s complacency and think it could deepen the Coronavirus crisis and ultimately the UK economy.

 

2. External deficit

 

Trust me, it isn’t just the Pound that’s taken a beating. All currencies whose underlying domestic economies have a large external deficit – i.e. they import considerably more than they export – are proving vulnerable to speculative flows. A weak current account balance can be likened to an over-leveraged debtor; in bad times their credit line is the first to be cut.

 

3. Brexit

 

With the political change that the UK was already attempting to undertake still underway and the time still ticking on a deal, there is a level of political risk that sours the taste of Sterling in investors’ mouths even further.

 

4. Oil

 

Whilst the UK may not be affected by the value of oil to the same degree as the true commodity currencies (CAD, NOK, RUB), Brent Crude (North Sea Oil) does still have an important influence on the capital flows around Great Britain. The sell-off in Crude Oil prices can still be seen to weaken Sterling slightly.

 

 

 

 

Discussion and Analysis by Charles Porter

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Morning Brief – Laura Ashley

Laura Ashley

 

Sales having fallen by the relatively small margin of 10% is enough to have pushed the company into appointing Administrators. Sloane Rangers from yesteryear scarcely able to believe it are pinching themselves at this news given the vice like grip those designs had on Middle England for so many years. The virus outbreak has had an immediate and terminal effect on this high street perennial and the clear message is that we should brace ourselves for further chains to go the same way. With 150 stores and 2,700 staff it is a sad day to see Laura Ashley fail despite it being clear that those floral designs had had their day. Tempus fugit….

 

 

Australia

 

So obvious but why haven’t other countries adopted this excellent idea until now? In order to allow elderly shoppers in these extra-ordinary times to avoid aggressive shoppers and their hoarding, and to buy much needed food and other grocery supplies, supermarkets down under are opening one hour earlier for the elderly and advertising a so called Elderly Hour. Bonzer!

 

 

Iran

 

Political correctness gone mad: Students in Iran have made a film as part of a university project which appears to show it raining aubergines. Seems just the thing to jolly us all up in the circumstances. But the Iranian regime has taken a dim view of this “inappropriateness.” The 5 fun and aubergine loving students having been arrested were then paraded on public TV to make their apologies for causing “public disquiet.”

 

 

Lots of tips on what diet to follow to ward off Coronavirus: funnily enough pretty similar to diet tips before it was ever heard of:

 

Citrus fruit, broccoli, yoghurt, garlic, ginger, spinach.

 

 

And (working from) home exercise when you have watched all the box sets and can’t reach any co-workers to talk to:

 

Running on the spot-self explanatory

Push ups- brutal

Jump squats-worse

Side plank rotations-excruciating

Mountain climbers-heart rate higher than when you discover there’s no gin on a Friday night

Lateral shoot throughs-think high plank on one hand and leg combined with a kick.

Bunny hops-sounds benign, but it’s nothing like Watership Down.

Lateral lunges- you will be semi-unconscious by now so no need for explanation.

Bench dips-your arms and hips will be on fire two hours after stopping.

Bear crawls-this will finish you off.

Repeat…but look on the bright side, it has at least taken your mind off the news.

 

 

Meanwhile at SGM-FX….

 

The CEO has arranged for a flu vaccination top up to strengthen stalwart SGM-FX staff’s immune systems: a nurse is due this morning. Huge excitement from Euan on the Client desk who has apparently been re-watching Carry on Doctor.

Better hope it’s Barbara Windsor and not a Hattie Jacques lookalike…Ooh Matron!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Deep and sharp

Deep and sharp

 

Alarm bells are still ringing. Households are on lockdown. Authorities are seemingly powerless to overcome the Coronavirus pandemic. Yesterday the Fed’s almost unprecedented 1% weekend cut in the target rate and a $700bn ramp up in quantitative easing failed to placate markets. If you’re not sure what that means it’s the Fed filling more than 116 Air Force Ones with $100 bills and throwing it over Washington DC for spending. Even a G7 commitment in true Super Mario form to do “whatever is necessary to ensure a strong global response” failed to stem the value bleed from risky investments. The problem Coronavirus presents is becoming ever more pervasive. But surely someone’s got to focus on the silver lining…?! I’ll give it a crack.

 

The global economy looks like it is emerging from one of its longest and largest expansions in history. Without sounding like I’ve suddenly converted to a socialist economy ideology, the world was over indebted and that puts a strain on the very growth that facilitated the debt’s creation. The economy’s natural response is to contract – we get a recession – something like that which we saw during the Great Depression of 2007/8. It’s econ101 – a squiggly line on top of a straight one – the business cycle. In 2007/8 the recession and crisis in the real economy was caused by a financial crisis. That’s particularly damaging because the banking system stops handing out money at the very time when the world needs it. Lending for mortgages, asset purchases and business funding dries up because banks themselves are the subject of immense balance sheet strain and need all the cash they can get their hands on!

 

In fact, a financial crisis has often preceded a crisis and recession in the real economy and the two have seldom been separated. The world was due a correction and, in the absence of an exogenous shock like the coronavirus, and like the oil price shock that we’ve been ‘double punched’ by in recent weeks it might not have come for as long as a couple of years. It would have been long and laborious and cost thousands if not millions of jobs worldwide.

 

Now though, because of the sudden collapse in supply chains, travel, consumer spending and productivity, it’s taps open on monetary and fiscal accommodation. What’s more than that is we have well capitalised banks that can still lend to individuals and business to weather the storm. Many have been offered a deposit ratio of 0% to encourage spending meaning that when its back to business as usual (likely in summer once the peak of the virus has been and gone) the global economy should soar in one of the most aggressive periods of growth in modern history. The combination of oil at $20-30 and cash aplenty will mean that business conditions are optimal once the world is back online. The downturn should in summary be deep and sharp with an impressive V-, not U-, shaped recovery.

 

If that wasn’t enough good news for you, never have I had so much room in which to stretch my arms and accommodate the full majesty of a broadsheet on my morning commute… every cloud!

 

 

 

Discussion and Analysis by Charles Porter

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Morning Brief – Unprecedented Action

Unprecedented Action

 

Last night’s Federal Reserve action underlined the commitment of global monetary authorities’ to tackle the economic fallout from the virus. The Currency Market is opening steady from the move late on Friday night which no doubt lay behind the weekend decision. GBP a cent stronger versus USD but still sharply lower than London’s close. Markets overall highly nervous and equities selling off again.

 

 

Hydro-Electric Relief for Zambia and Zimbabwe

 

After the worst drought since 1978, it’s been pouring with rain in Angola, and that means that the Zambezi River having been flowing at a comparative trickle has turned into a raging torrent 250 miles away but now coursing towards the Victoria Falls and the very under used hydro-electric dam in Lake Karina the largest man made reservoir in the world which will in turn generate plenty of electricity. At 3,307 cubic meters of water per second coming their way, people in Zimbabwe and Zambia are now sure of an end to the 18 hours a day that they have been without power.

 

 

Bitcoin

 

New word on Friday and it applied to Bitcoin: halfening. It means if you hadn’t worked it out, that the price of Bitcoin in this case, halved in just 2 days from $8,000 to $3,914. Plucky buyers in Hong Kong took it back to $5,250 by lunchtime in Asia. If you were kicking yourself for not having bought and watched it up to $10,367 on Valentine’s Day, you might want to buy some. Or…you might not. Remember like any share if there is a dash to cash, all that valuation stuff goes out of the window. The added challenge with Bitcoin is that liquidity is not always forthcoming. Mind your eye.

 

 

Happy To Help

 

That is of course if Asda is qualified to do so. While filling up with petrol on Friday, I noticed a man with two plastic cans at the pump opposite-unremarkable except that he was talking animatedly on his phone. The tannoy of the unmanned station squawked indignantly followed by the announcement that the use of phones was not permitted on the forecourt and that all pumps would be switched off on the grounds of safety. After 10 minutes an Asda employee arrived and castigated the man with the petrol cans for being on the phone and then told him that in any case cans were not permitted to be filled -also on the grounds of safety. Having brought the petrol station to a halt and with queues of irate Isle of Dogs motorists shouting the odds, plastic can man pushed off.

 

The Asda employee said he was Happy to Help and being fully qualified to do so that he would re-set the system and the pumps would be working again shortly. With that he disappeared into a concrete safety bunker marked Entry Strictly Forbidden. Nothing happened for a time other than that the messaging on all the pumps flickered into life and now read : Out of Service. A further 20 minutes and I, having had enough, opened the bunker door to find the Asda employee punching numbers into the phone. You don’t know how to reset the system, do you? I said. He hung his head and admitted that he did not, and that he was unable to get through to Asda central control to get help.

 

The moral which is especially appropriate in these strange times, other than that one should leave immediately in similar circumstances, is that a disaster recovery plan should always be operated by er….qualified operators. Petrol? 114p if you are wondering. And yes having lost 30 minutes of my life I went up the road and paid 125p. Older, wiser and poorer for the Asda experience.

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Aussie Rules

Aussie Rules

 

F1 fans expected this weekend’s opening race in Melbourne to be officially postponed despite F1 fiercely resisting it given the costs of staging each race and the tight timetable between races in different countries. It all requires detailed and flawless planning and execution to move the F1 circus every week during the racing season. However the market is probably the most reliable indicator on the cancellation with a whopping $600 Million in value being wiped off F1 shares yesterday which takes the hit to $2.6 Billion since January. It is estimated that each F1 car costs $15.5 Million before costs such as development, drivers, fuel, transport etc etc. So no wonder that F1 organisers and manufacturers are more than a little hot and bothered at the implications of no revenues from advertising for all that investment. China has already cancelled their Grand Prix, Bahrain will be holding their Grand Prix but without spectators and Vietnam’s inaugural Grand Prix is under threat.

 

 

FTSE history

 

Unsurprisingly equity markets had a very bad day yesterday. With the FTSE down at 5,250, 1-6-18 and 7860 the all time high seems another world. At SGM-FX we believed that the UK offered value at the beginning of the year given that the UK market had been weighed down for the previous 18 months by the Brexit debate saga. So it’s tin hats on and if readers do have ISA money or other liquid savings, the consolation is that the UK now offers great value. For those of you who have short memories we have been at 5,250 before: in fact in 2012, 2011, 2010, 2008, 2005, 2002, 1998 and 1997 all immediately come to mind. As for GBP it has become caught up in the further Dash for Dollars movement which in tandem with the expectation that the Bank of England will not hesitate to ease further, means that GBP continues to look weak.

 

 

Himalayas and the flatlands of….Essex

 

Talking of high peaks rather than low troughs, climbers of Mount Everest have been banned from climbing up the Chinese side of the mountain but the Nepal side remains open to teams determined to scale the highest mountain in the world at 29,000 feet or 8,848 metres. Nearer to home, SGM-FX’s James and keen scout (Motto: Be Prepared) is downcast at the news that August’s Scout Jamboree due to be held In Essex, UK for 9,000 scouts from all over the world has been cancelled. At least we have been spared the sight of James’s knees- never mind his woggle!

 

Nice weekend everybody…and stay safe and well!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Bears

Bears

 

Last night’s price action was tumultuous. Asian and US trading sessions are normally characterised by widespread, sluggish price moves and limited volume. It’s unsurprising given that some 80% of foreign exchange sales and trading takes place in Europe and the lion’s share of that in London. However, when serious geopolitical or economic events take place, markets are forced to react no matter what the time zone. Algorithmic trading from London and Europe will contribute to the price action but market participants in the active time zone will also play their part. In turn, market orders placed by European market participants will add to the moves.

 

Last night was one of those occasions. President Trump addressed the United States to announce a travel ban and stimulus package. All travel from Europe to the United States for the next thirty days has been banned effective midnight on Friday. Those outside of the Schengen (borderless travel zone) Area will not be subject to the ban – including the United Kingdom. The reaction from the White House comes as the World Heath Organisation declared Covid-19 a global pandemic. To support business Trump also called upon congress to afford a $50bn line of funding to support SMEs through the pandemic.

 

Around the same time last night Italy, a nation under lockdown, ordered the closure of all businesses with the exception of pharmacies and grocery stores. Italy’s reaction came as deaths climbed by 200 in just 24 hours. Earlier on Wednesday Rishi Sunak, Chancellor of the United Kingdom, announced a stimulus package of £30bn to weather the storm. He also took the cap off of NHS funding in order to bolster the national service’s ability to tackle the virus. The taps on financial, monetary and medical support have been opened across the globe to curb the impact of Coronavirus on the world. Yet still, overnight, the same risk-off trade emerged in force. Emerging market currency was sold in droves and equity markets sunk.

 

The risk-off trade emerged despite the strong response and call for economic stimulus. The sell-off has been so severe that many equity markets have entered bear territory – i.e. they’ve sold off in excess of 20%. The Dow Jones industrial average, a US stock index that tracks the performance of 30 large US corporations, has entered bear territory with many others following close behind. Following the announcement by President Trump Asian equities sold off rapidly. US futures point to a sluggish start for the US stock market later this afternoon.

 

Over the last 20 days the Euro has gained close to 7% versus the US Dollar. The majority of this shift has taken place since the Federal Reserve announced a 50 basis point emergency cut in interest rates. Central banks around the globe have come to the rescue of their domestic economies creating a synchronised monetary response. Despite admonitions to the world the ECB has yet to adjust policy in response to the virus. Today, however, President Christine Lagarde will lead the European Central Bank in a monetary policy decision. The ECB employs three interest rates: the deposit facility, their main refinancing operation rate, and the marginal lending facility. The Bank also conducts huge outright monetary transactions (QE to you and me). The ECB can and should adjust the majority of these instruments to provide support to the ailing European economy. In turn, the ECB will hope, the Euro will weaken in order to provide further stimulus to the ailing economy.

 

 

 

Discussion and Analysis by Charles Porter

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Morning Brief – Exactly One Month to the end of the Tax Year

Exactly One Month to the end of the Tax Year

 

Those seeking to plan their personal and corporate affairs as they traditionally do each March are faced with more challenges than usual. Here in the UK, there is new government with a sufficiently large majority to push through more controversial positive and negative measures for taxpayers, plus a new and largely unknown Chancellor plus a global move to counter Covid 19 by the introduction of easier monetary conditions. However despite optimism generated from the Prime Minister’s enthusiasm for large infrastructure projects, the over riding concern is that it all needs to be paid for. Hence the stories being floated through the press in recent weeks about raids on pensions, the withdrawal of entrepreneurs’ tax relief etc. In the past 24 hours bond markets have rallied, equity markets led by the Dow down by 3.6% have again taken fright on the impact on the global economy of Covid 19 and USD has weakened and GBP has been a beneficiary. History would suggest that USD will stage a recovery before the end of the week in New York tonight. But there again, the sheer pace and size of the swings make for a white knuckle ride.

 

 

Gig economy

 

A landmark ruling by the top French court which last night allowed an Uber driver in France to be considered as an employee. This not only has ramifications for the Uber business model but also for other companies that make up the gig economy such as Deliveroo and Just-Eat Takeaway. Implications include more tax, employment costs and employment benefits such as paid holidays will mean a re-write of business plans-and of course dearer taxi fares: Mon Dieu!

 

 

Bean counters

 

News that EY had sent 3,000 Madrid workers home yesterday as a Covid precaution got the pulses in SGM-FX’s accounts department racing. That led to a discussion about the EY global workforce: 245,000 FYI  of which 114,000 are in Europe, Middle East, India and Africa. With global 2019 revenues of USD 36.45 Billion, EY enjoys a per capita revenue figure of USD 149K.

 

A body temperature of 37C is normal and fortunately there were no signs of that being breeched by any of the SGM-FX early birds -other than when there was a tussle over the Ketchup when the Birley’s breakfasts arrived at the SGM-FX office this morning. Oh what fun!

 

Those bean counters, they do need to get out a bit more!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – How to cure Coronavirus

How to cure Coronavirus

 

Taking lead from the US House of Representatives, Italy, China, and now the IMF, apparently the cure to Coronavirus is to print a ton of money. In fact, more; much more! Ten tons of $100 bills is worth approximately a billion dollars. That means the IMF’s pledge of $50bn for Coronavirus afflicted nations is equal to 500 tons of three-figured green notes. The US House of Representatives is discussing an $8bn (80 ton) relief package of its own following Italy’s discussions of a €5bn Euro spending plan (12 and a bit tons if you use those purple €500 notes!). Yes, I’m being facetious and, no, I’m not trying to incite a metric versus imperial measurement war… But the message is important, the raising of cash for government spending, its dispersal, funding and allocation will all have important impacts upon the global foreign exchange market.

 

Thanks to central bank action that kickstarted on Tuesday, the money being raised by each nation will be essentially free. It will have little impact other than to add another drop into an already enormous pool of liquidity and debt. The Fed’s surprise cut two days ago precluded similar cuts in the cost of borrowing in Australia, Malaysia and Canada. Canada’s decision to mirror the Fed’s 50 basis point cut weakened the Loonie yesterday against its neighbouring Dollar. The way an exchange rate reacts to interest rate decisions is simple; it changes the fundamental cost/reward for getting into respective currencies and therefore appetite for them. But shifts in the rate currencies trade at with respect to each other have huge impacts in determining how effective those very rate decisions will be.

 

Consider this: the United States’ Federal Reserve cut rates in order to nurture a flickering flame of late-cycle US economic expansion. In particular, it did so to buffer firms whose global supply chains that frequently originate in or prevalently involve China. Additionally, companies exporting from the United States get some respite from the headwinds of a flagging global economy when their currency conveniently depreciates, making it cheaper to purchase internationally. This really does happen – the expectations and realisation of an interest rate cut in the US saw the Dollar lose about 4%. Great! But at the same time the Canadian Dollar, lost 1% versus it’s US counterpart meaning that the relative cost of trade across the US-Canada border moves in favour of the latter, partially limiting the demand stimulus to US exporters. The diminished impact of US monetary easing means that yet further cuts are priced in this year and even as soon as their next scheduled policy announcement in a little under two weeks. All that could equal a yet-weaker US Dollar.

 

Central banks and nations alike will therefore be very careful to call the easing cycles that they have wholeheartedly embarked upon as a coordinated global policy response. Not, as some might more pragmatically conjecture, a race to the bottom in monetary policy and exchange rates. The BoE so far has been left out of this race largely explaining its trend-breaking 1.5% appreciation so far in March. With incoming Governor Andrew Bailey pledging to take ‘swift action’ to soften the economic impact of Corona virus, that could all be due to change.

 

 

 

Discussion and Analysis by Charles Porter

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Morning Brief – Markets Maelstrom

Markets Maelstrom

 

News early on in the day yesterday that Central Banks were ready to inject a stimulus by way of more liquidity and to create still easier monetary conditions to combat the economic effects of Coronavirus cheered stock and oil markets further. Then statements from the G7 in the morning and the pre-emptive 0.5% rate cut by the Federal Reserve early in the afternoon underpinned that sense that there would be concerted action when necessary-with the clear implication that further action is likely to be taken-talk of a further 25bps at the March Fed meeting. Equity markets led by the Dow Jones paused for thought, considered and then sold off on the Fed Chairman’s comments. Currencies showing smaller movements than in the past week but still sizeable especially the ZAR which strengthened sharply against GBP and EUR. Safe haven currencies Yen and CHF both gained versus the USD.

 

 

Cap’n Birdseye

 

It is exactly 90 years ago today in 1930 when Clarence Birdseye opened for business with 18 stores in Springfield, Massachusetts, USA having taken a handy $22 Million investment a year earlier from none other than Goldman Sachs to secure his trademarks and patents. Clarence knew a thing or two about preserving things having started his career as a taxidermist. In 1912 he had set off on a wildlife survey in Labrador while at the same time working as a fur trapper. Quickly he became alive to the possibilities of freezing fish having noticed that if frozen quickly and then defrosted the flavour was preserved as well as the fish. Clarence had plenty of opportunities to experience this at first hand since the temperature was often minus 40c. Having mastered fish, Clarence branched out and successfully used his freezing technique successively on chicken, vegetables, meat and fruit. Goldman Sachs for their part having bought out Birdseye in 1929, made a small but significant change to Clarence’s firm renaming it Birds Eye Frozen Foods.

The rest is history!

 

 

It’s the way you tell ‘em

 

And this time it is Vladimir Putin re-writing history. Yesterday he decreed that Christianity and only traditional ie heterosexual marriage should be defined in the Russian Constitution thereby outlawing homosexual partnerships. At the same time the President proposed an amendment to the Constitution on historical truth. This may be the way forward to what is a challenge since Russia has many famous sons who preferred the company of other sons rather than that of the female sex: starting with Ivan the Terrible who, while prodigious in producing children, was more inclined to spend time with young men in dresses. This is awkward for the Russian Orthodox Church who are under pressure to make Ivan a Saint but are unable to reconcile that with his favourite proclivities. And that is before taking Pyotr Tchaikovsky, composer of Swan Lake and the Nutcracker fame, plus ballet dancers Rudolf Nureyev and Vaslov Nijinsky into account and the list goes on…and on. So the fine print on that Constitutional amendment on historical truth will be key….

The Russian Rouble has weakened sharply in fact by nearly 9% versus the USD in the past 2 months, but that is rather more due to other factors than “historical truth….!”

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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