Daily Brief – European Central Bank

European Central Bank

As widely expected the ECB duly cut EUR interest rates by 25bps yesterday. However the orderly conduct of EU monetary policy is currently anything but orderly in the light of the German coalition partners agreeing to bypass the long standing debt rules. (see below) While the services inflation element is down to 3.7% which supported the cut in interest rates, the announcements yesterday sent 10 year Bunds up by more than 20bps to 2.8%. That would seem to be it for further cuts for the time being.

EUR/USD 1.0795.

National People’s Congress

The annual week long meeting in Beijing would normally command more airtime than it has this year. In the face of tariffs and the rolling TV coverage of the not even two month old US administration, the fact that President Xi has claimed that despite US tariffs China will still achieve a 5% growth in its economy has been reported but not examined in as much detail as it might otherwise be. That is because Germany released news of its big defence spending bazooka and the relaxation of its strict borrowing rules yesterday. At this time the focus is more on Ukraine and the geo-political play between the USA and European leaders.

GBP/USD 1.2881.

Best Beaches

As it’s a Friday and the time of year that residents of the Northern Hemisphere emerge blinking from their winter and can begin to contemplate summer holidays only a few months away, a survey of the world’s best 50 beaches just published is worth summarising. Some are the other side of the world, but some are closer and easily reached being within Europe. In 5^th place is Voutoumi in Antipaxos, Greece, while 4^th is Entalulu in Pelawan, Philippines, 3^rd is Meads Bay in Anguilla in the Caribbean, 2^nd is Cala Mariolu, Sardinia, Italy but the official best beach anywhere is Trunk Bay, St John in the US Virgin Islands. Trunk in this context is the local word for a turtle so if beaches and turtles are your thing, get packing as that’s the place to go.

USD/JPY 147.78.

Glastonbury 2025

The sheer genius that has made Glasto a success for 50 years plus is the ability to select acts and no year more so than in 2025. Acts already announced include Olivia Rodrigo, the 1975 and Charli XCX. More senior performers number Rod Stewart and Neil Young – now that his artistic differences have been smoothed over with the organisers. Charli XCX apart from scooping multiple awards last week at the Brits while not widely known for this, but we are continuously reminded that she was a fellow pupil and his contemporary at SGM-FX’s own Charles Porter’s school. History does not relate however whether they served on the same netball team.

EUR/GBP 0.8383.

River Deep Mountain High

Incredible to think that this number by Tina Turner and produced by Phil Spector was released 59 years ago this day in 1966. Tina’s abusive husband Ike was determined to get in on the action and while he was informally credited with the song, it was Tina whose name was on it. Ike’s contribution was restricted to Phil Spector paying Ike $20,000 to stay away from the studio while recording was in progress.

When I was a little girl, I had a rag doll
Only doll I’ve ever owned
Now I love you just the way I love that rag doll
But only now my love has grown
And it gets stronger in every way
And it gets deeper, let me say
And it gets higer day by day
And do I love you, my oh my
Yeah, river deep, mountain high – yeah, yeah, yeah
If I lost you would I cry
Oh how I love you baby. Baby, baby, baby.

When you were a young boy, did you have a puppy
That always followed you around
Well, I’m gonna be as faithful as that puppy
No, I’ll never let you down
‘Cause it goes on and on, like a river flows
And it gets bigger, baby, and heaven knows
And it gets sweeter, baby, as it grows
And do I love you, my oh my
Yeah, river deep, mountain high – yeah, yeah, yeah
And if I lost you would I cry
Oh, how I love you baby.
Baby, baby, baby.

Have a Great Weekend! 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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