Daily Brief – Autonomy and Atlanticism

Autonomy and Atlanticism

These are the stark choices that European leaders seem to be advocating to their still to catch up partially in denial electorates. At one extreme is French President Macron who is banging the drum for European self reliance and autonomy from US protection having concluded that the USA cannot be relied on. The increasingly lonely position at the other end of the spectrum adopted by Italian President Meloni is for Atlanticism and adherence to the USA given that her belief is that Europe’s defensive security is dependent on US involvement. It is unlikely that either position will be proved to be correct when the history books are written, but hopefully both approaches will be adopted by Europe’s leaders. Meanwhile in the light of the blizzard of pronouncements from the White House the hope is that Winston Churchill is once again on the money: after exhausting all other options America will in the end do the right thing.

EUR/USD 1.0833.

US Economy

A bad week in US markets and when the dust settled on Friday night the feeling was what was all that about? The on-off-on nature of US tariffs on China, Mexico, Canada and Europe was the obvious culprit and especially the pace of their introduction which forces businesses to plan and re-set their pricing. However this was implicitly a fear for the prospects of global economic growth. Federal Reserve Chair Powell soothed markets on Friday night after US unemployment ticked up to 4.1% by saying that the US economy was for now in good shape and that the Fed would be cautious about further rate cuts. Underlining all this Morgan Stanley cut its US 2025 growth forecasts from 1.9% to 1.5%.

GBP/USD 1.2920.

Oil

The USA’s Strategic Petroleum Reserve is the largest store of oil in the world and it has a capacity of 727 million barrels. Currently at 395 million barrels after President Biden ran it down by selling 300 million barrels to depress the price of petroleum the new administration has pledged to refill it up to capacity in short order. Upon examination as has become a pattern of improbable boasts and historical inaccuracies that Presidential statement does not hold water as apart from costing more than $20 billion it will take years to achieve. 

Brent Oil $70.36

Saudi Arabia

According to the Kingdom’s travel supremo who was like his peers hustling tourism in Berlin last week at the ITB, 106 million visits in the past year have taken place. Far be it from us to rain on his parade but visits do not denote tourists but do include construction workers from the sub continent for example. Anyway moving on, the thesis is that international tourists are flocking to sports events, Red Sea resorts and desert camping sites to sample the delights of Saudi Arabia. Stretching credibility still further European visits to the Kingdom are up by 24% of which 44% are women. 

EUR/GBP 0.8383.

I Will Survive

This day in 1979 what was then a B side song found its way onto the A side and soared to the Top of the Charts for Gloria Gaynor as well as becoming both an anthem for the oppressed as well as a standard in gay clubs at that time.

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.

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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