Daily Brief – Toyota

Toyota

For those without a strong disposition look away. Toyota shares fell 35% in the last few weeks between the beginning of July and now, before recovering 13% in the past days. The reasons are twofold: firstly Toyota has been a major beneficiary of the weak Yen and when that abruptly changed the market reacted. There was also the no small matter of a scandal involving falsified safety certificates. Toyota derives 20% of its earnings from overseas and is therefore running a massive Yen currency position at all times. Moves in the shares such as these recent ones of the world’s largest car maker underline the volatility of the Japanese market and the uncertainties faced by all car manufacturers. All car companies with significant overseas sales have always needed to manage their currency exposure skilfully but if ever one needs a reminder as to what can happen when currency markets move this is it: FX101.

USD/JPY 147.03

Robotaxi

Driverless car progress in the Western world is a tale of fits and starts with the USA in particular being cautious following several failures in the technology. Now clear water is evident between the USA and China with trials taking place in 19 Chinese cities of both robotaxis and robobuses. China has an aggressive rollout plan which will see 1000 driverless taxis in Wuhan by year end 2024 and in over 100 cities by 2030. Not good news for the 7 million taxi drivers in China.

EUR/USD 1.0926

Pole Vaulting

21 year old French pole vaulter Anthony Ammirati missed out on an Olympic medal due apparently to having insufficiently secured the contents of his shorts which meant no podium position for him. Another potentially more lucrative career has opened up to him however in the adult entertainment industry where he has been offered a 60 minute initial video slot for USD250,000 with a different kind of pole on another kind of podium with no shorts at all by porn site Camsoda.

GBP/USD 1.2765

Oil

Brent at $78.06 reflects the fears surrounding the tinderbox of Middle East politics. Supply disruptions as a minimum and a widespread conflict at the other end of the scale are driving intra day price moves of 2-3%. Meanwhile the story of the moment is Western insurance companies providing insurance cover to Russian oil companies despite sanctions being in place and insurers being forbidden to insure cargoes with oil costing more than $60 per barrel. This is being flagrantly disregarded.

White Room

This day in 1968 the first of the so-called Supergroups, Cream released their Wheels of Fire album. It was the most exciting and coolest accessory an aspiring rock fan could possibly have with the album sleeve coloured silver and ornately styled. Wheels of Fire included many of Cream’s trade mark hits including this one which it was de rigueur to play at full volume:

In a white room with black curtains in the station
Black roof country, no gold pavements, tired starlings
Silver horses ran down moonbeams in your dark eyes
Dawn light smiles on you leaving, my contentment

I’ll wait in this place where the sun never shines
Wait in this place where the shadows run from themselves

You said no strings could secure you at the station
Platform ticket, restless diesels, goodbye windows
I walked into, such a sad time, at the station
As I walked out, felt my own need, just beginning

I’ll wait in the queue when the trains come back
Lie with you where the shadows run from themselves

At the party, she was kindness in the hard crowd
Consolation for the old wound now forgotten
Yellow tigers crouched in jungles in her dark eyes
She’s just dressing, goodbye windows, tired starlings

I’ll sleep in this place with the lo-onely crowd
Lie in the dark where the shadows run from themselves

Have a Great Weekend! 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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