Daily Brief – Advance Australian Fair

Advance Australian Fair

As the national anthem goes. In Asset Management land, more long positions have been built up in the Aussie Dollar than at any time since 2021. The logic is that the Reserve Bank of Australia will keep interest rates high and that China’s economic stimulus will drive regional demand. After a run up in late September the Aussie has fallen 2.5%. Sager minds counsel waiting for a bit more of a sell off until the 0.6630 chart level before entering the trade but the weather looks set fair for a long AUD position.

AUD/USD 0.6711.

Oil

Short term good news in that the rhetoric for now at least from Israel’s PM Netanyahu has lessened and his threat to bomb Iran’s nuclear and oil production facilities has been withdrawn. Consequently oil fell 3% but gold remained pretty much exactly where it was; so markets not fully convinced then.

Brent USD 74.45.

UK Budget

No forecasts here for what Chancellor Reeves will unveil in her maiden Budget on October 30. Living in the UK for the past few weeks has felt a bit like participating in a national real time focus group with Chancellor Reeves posing a series of questions through the UK press and evaluating public reaction. It started with removing tax breaks for the Private Equity sector which was followed by Capital Gains Tax, Pensions, VAT on school fees-that went well when it transpired that the richest private schools like Eton College had benefitted while poorer ones which are already struggling have been further disadvantaged, and now it is the turn of employers who are being threatened with a hike in Employer National Insurance. What Chancellor Reeves has discovered is that she can experiment by pulling on these various levers and measuring the levels of protest but that it is much akin to a phony war. Reality for her will be when she stands to deliver her Budget in the House of Commons and the market reaction to it after October 30.

GBP/USD 1.3080.

Porsche Taycan

The alternative to the iconic Porsche 911 sports car is the Taycan model which is fully electric and costs between GBP86K and GBP100K. Highly unusually for Porsche, the company has seen sales for the Taycan model fall by 47% in Q3 to the lowest level for many years. This is due to falling demand for EVs in Europe and product recalls due to brake hoses and battery modules-both being fundamental to having wind in your hair while enjoying a sports car. In addition demand in China has also cratered as buyers are put off by threats by the Chinese government to impose import controls and presumably restrict spare parts. 

GBP/EUR 1.2010.

Endless Love

It was of course Diana Ross and Lionel Richie who delivered what was to become a Platinum seller when they released this smash hit this day in 1981. For Diana Ross it was a slight case of ho hum because it was her 18^th Number One hit, but in terms of commercial success Endless Love was her biggest by some distance.

My love, there’s only you in my life
The only thing that’s right

My first love
You’re every breath that I take
You’re every step I make

And I, I want to share
All my love with you
No one else will do

And your eyes, your eyes, your eyes
They tell me how much you care
Ooh, yes
You will always be
My endless love

Two hearts
Two hearts that beat as one
Our lives have just begun

Forever (oh)
I’ll hold you close in my arms
I can’t resist your charms

And love, oh love
I’ll be a fool for you I’m sure
You know I don’t mind (oh)
You know I don’t mind

‘Cause you
You mean the world to me (oh)

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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