Daily Brief – Gold and Oil

Gold and Oil

Gold is still firm at USD 2716 but flat whereas oil is perky with Brent at USD 73.22. The reason oil is firmer despite the hopefully de-escalating Middle East situation is that there is hope being injected into the price by the Chinese economic stimulus and the hope that the expected imminent US rate cut will drive global economic growth.

EU Growth

0.7% in 2024, 1.1% in 2025 and 1.4% in 2026 GDP Growth forecasts by the ECB say it all. Governor Lagarde is rightly sticking to her mantra of caution when it comes to slaying the inflationary dragon, but the pressure is intense for the ECB to inject some growth into the EU economy. Two telling admissions from Christine Lagarde in her presser last week: firstly that the EU economic recovery has been slower than the ECB expected and secondly that last week they did consider an economic bazooka to the EU of a 50bp cut. Watch this space for that big cut sometime next year rather than the choreographed regular 25bp cuts that are currently in the market.

EUR/USD 1.0501.

British Pound

Friday was a classic example of when the market gets complacent: the UK economy was expected to show a barely discernible growth number of 0.1% so there was little focus on the release. In the event when it came out as a fall of 0.1% it sent a tremor through the mind of the market. The obvious question of the now not so new UK Government’s impact on confidence, investment and performance had been lost in the end of year dog days of Christmas parties and shopping days. Suddenly it was back front and central: just exactly how and why would the UK economy flourish under Chancellor Reeves? Needless to say GBP was marked down – sharply.

GBP/USD 1.2619.

EU Gender Pay Gap

On average in the EU women earn 12.7% less than men, In Estonia the gap is at its widest at 21.3% while in less than progressive Switzerland, Czechia and Austria it is around 18%. Money is one thing but stats reveal that when it comes to it, senior positions, labour force participation and employment are all less open to women than men. There is only one lone beacon in Europe and that is Luxembourg where men on average earn 0.7% less than women.

EUR/GBP 0.8322.

How Deep Is Your Love?

This day in 1977 this number by the Bee Gees went Gold. At which point a Ronald Selle stepped forward and filed a suit claiming that his song called “Let It End” had been plagiarised by the Aussie-Mancuncian mopheads (in those days). The Bee Gees contested the claim vigorously and duly lost, but due to their determination and let’s not forget their deep(er) pockets, they went on again and won on appeal. How deep indeed.

I know your eyes in the morning sun
I feel you touch me in the pouring rain
And the moment that you wander far from me
I wanna feel you in my arms again
And you come to me on a summer breeze
Keep me warm in your love, then you softly leave
And it’s me you need to show
How deep is your love?
How deep is your love? How deep is your love?
I really mean to learn
‘Cause we’re living in a world of fools
Breaking us down, when they all should let us be
We belong to you and me
I believe in you
You know the door to my very soul
You’re the light in my deepest, darkest hour
You’re my saviour when I fall
And you may not think I care for you
When you know down inside that I really do
And it’s me you need to show
How deep is your love?

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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