Daily Brief – Swiss Ingenuity

Swiss Ingenuity

It started with the Swiss Federal Institute of Technology in Lausanne or EPFL who were approached by start up company Sun-Ways which has developed a removable system of solar panels that can be laid on top of railway tracks over which trains can pass. Removable panels are important given the need for maintenance of the tracks to ensure that those Swiss trains continue to run precisely on time. Switzerland has 5317 kms of railway tracks and if the initial test was extended it would create a solar farm the same size as 70 football fields. To start off, a 3 year pilot is being launched in the spring of next year in Neuchatel.

GBP/CHF 1.1234.

Australia and USA

Both account for approximately 10% of global beef production but due to droughts in the USA US beef production has slumped and Australia is picking up extra business. Australian beef shipments to the USA stood at 11000 tonnes a month just two years ago but are now at 40,000 tonnes and that means an increase from USD 100 million to USD 290 million in August this year alone. For example Australia has now captured more than 45% of both the Japanese and Korean beef markets.

AUD/USD 0.6683.

Trump and Tariffs

Described as the most beautiful word in the world of trade by Trump, there is a growing appreciation of what a further Trump Presidency might mean for tariffs and consumers: 10-20% on all imports, 60% on US imports from China and 200% on products from companies such as tractor manufacturer John Deere should they press ahead with plans to move production to Mexico. So what does that mean? In short the US importers are obliged to levy the tariffs which means that US consumers will pay more for imported goods which is…. inflationary as well as being expensive for consumers.

GBP/USD 1.2985.

European Central Bank

As widely expected the ECB duly cut interest rates by 25bp yesterday. This was the third such cut this year as the ECB attempts some cardiac massage on the sluggish EU economy. The fear now in EU land is that the overall EU economy will not even manage zero growth in 2024 but will contract. For all these reasons as well as the geo political stress gripping the world, USD is strong. Meanwhile citing lower inflation and the strength of ECB monetary policy transmission – i.e. the ECB doing a good job, President Lagarde announced the cuts congratulating herself and her colleagues in passing on all data heading down. What was apparent is that not only bad data (inflation) is heading down but so are small healthy price growth and economic growth which are both long term EU problems.

EUR/USD 1.0852.

Viva Elvis

Sadly not, but this album released in 2010 included a reworked version of the King’s song Suspicious Minds. The idea was to release more contemporary newer versions of many of his hits but despite the hopes of Elvis’ heirs and not to forget his business managers who continue to wring every Dollar from his Estate, the album did not enter the charts.

We’re caught in a trap
I can’t walk out
Because I love you too much, baby

Why can’t you see
What you’re doing to me
When you don’t believe a word I say?

We can’t go on together
With suspicious minds (with suspicious minds)
And we can’t build our dreams
On suspicious minds

So, if an old friend I know
Stops by to say hello
Would I still see suspicion in your eyes?

Here we go again
Asking where I’ve been
You can’t see the tears are real, I’m crying
(Yes, I’m crying)

We can’t go on together
With suspicious minds (suspicious minds)
And we can’t build our dreams
On suspicious minds

Oh, let our love survive
I’ll dry the tears from your eyes
Let’s don’t let a good thing die
When, honey, you know I have never lied to you, mm

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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