Daily Brief – OECD

OECD

The Organisation for Economic Co-operation and Development slashed their forecast for 2025 EU growth this week from 1.3% to 1.0%. Germany with slated growth of just 0.4% down from 0.7% was described with a rare touch of OECD humour as the weakest link. While better described as the prime culprit, the effect of flaccid growth in the EU’s largest economy (by a distance) skews the whole EU picture since Germany as we have written before is rather the locomotive of the EU economy.

EUR/USD 1.0944.

Russian Assets

The frozen Russian Central Bank assets amount to EUR 274 billion and the debate continues as to whether they should be unfrozen and seized to make reparations in damaged Ukraine. So far EUR 50 billion of interest has been used as a compromise. Most of the EUR 274 billion was in short term bonds but they have now matured and the cash is spread across banks and institutions such as Euroclear in Brussels that has EUR 183 billion. The cost of reparations in Ukraine is estimated by the World Bank to be in the region of EUR 524 billion and will take 10 years. Those in favour of seizing those assets include Poland and the UK. Other EU countries favour doing nothing and using it as a bargaining chip in prospective peace talks with President Putin.

EUR/GBP 0.8418.

Tesla in Numbers

In December, Tesla shares stood at $479 and today it is $223. Elon Musk has just under 13% of the shares so it is simply wrong to think that a Tesla share price collapse just affects EM. However the brand is inextricably linked to Elon Musk and that is a problem and that is what lies behind the growing number of short sellers of the stock which so far has conservatively netted them $16 billion in profits.

GBP/USD 1.3003.

London Restaurants

Deposits are one thing to protect restaurants from no shows but a sign of the cash strapped times for the hospitality industry is the growing incidence of minimum spend at restaurants: Gymkhana in Mayfair has set £100, Hutong in the Shard £80 but upmarket sushi restaurant Araki in Mayfair has topped them all with £300. Waitrose Dine In offers suddenly sound a whole lot more attractive.

EUR/JPY 163.34.

Hammond’s Folly

This day in 1962 legendary music producer John Hammond released a record by an unknown artist named Bob Dylan. It was largely ignored possibly because it did not even have a title. It sold badly and quickly became known as Hammond’s Folly. However the singer whom David Bowie later described as having a voice like sand and glue, proved Hammond right and his critics who were consigned to Blowin’ In The Wind, resoundingly wrong.

How many roads must a man walk down
Before you call him a man?
How many seas must a white dove sail
Before she sleeps in the sand?
Yes, and how many times must the cannonballs fly
Before they’re forever banned?
The answer, my friend, is blowin’ in the wind
The answer is blowin’ in the wind
Yes, and how many years must a mountain exist
Before it is washed to the sea?
Yes, and how many years can some people exist
Before they’re allowed to be free?
Yes, and how many times can a man turn his head
And pretend that he just doesn’t see?
The answer, my friend, is blowin’ in the wind
The answer is blowin’ in the wind
Yes, and how many times must a man look up
Before he can see the sky?
Yes, and how many ears must one man have
Before he can hear people cry?
Yes, and how many deaths will it take ’til he knows
That too many people have died?
The answer, my friend, is blowin’ in the wind
The answer is blowin’ in the wind

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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