Daily Brief – Trumpcession

Trumpcession

A new word coined by the markets to include in the financial lexicon and this word neatly sums up the concern that Trump’s tariffs will result in a US recession which will in turn pervade the global economy. The USD has weakened on the back of the implementation of the first round of tariffs on Monday night with GBP benefitting markedly and looking perky.

GBP/USD 1.2748.

Ukraine Minerals

As markets struggle to work out the strategy of POTUS Trump, there are two conflicting schools of thought (at least): the first is that USD 500 billion which is what was on the table from Trump as a deal to secure mineral rights in Ukraine in exchange for arms and protection is a wildly overstated price given that many of the mining sites for those valuable minerals such as rare earth are in Russian hands and under the putative peace terms are likely to remain so. The second school of thought is that POTUS Trump through that deal is seeking to reduce the USA’s dependence for minerals on China – hence the full price. As ever with the first 40+ days of the new Presidency, both tactics and strategy remain opaque.

EUR/USD 1.0548.

Global Corruption

A helpful table showing the least corrupt countries. At the top of the class are least corrupt and almost squeaky-clean Denmark, Singapore, Finland, New Zealand and Luxembourg all of which score 81-90. In the 70-80 cohort are Switzerland, Australia, Canada, Germany and the UK. Then in the 60’s are France, USA, UAE and Belgium. The corruption is defined as perceived public sector corruption assuming, of course,  that the public sector is measurable rather than working from home.

EUR/JPY 156.35.

Germany

As we trailed earlier this week the Grand Coalition mooted between the CDU/CSU and the Social Democrats lumbered into action yesterday – or rather the talks started about it lumbering into action. The hope expressed by soon to be Chancellor Merz is that the CDU/CSU can come to an agreement with the SPD “by Easter”. There is something almost medieval about expressing a timeline predicated by the Christian festival but that is the way that Germany works: ponderously and it must be said rather at odds with the frenetic pace on the other side of the Atlantic. Given that the key discussion topics between the two factions are all about defence and military spending and that both self evidently will need to be sharply increased given the withdrawal of US support for Ukraine, those talks could or should be accelerated.

EUR/GBP 0.8278.

Evergreen (Love Theme from a Star is Born)

The more recent version of the film of the same name with Lady Gaga has its devotees but few who can remember it would dispute the powerful chemistry between Kris Kristofferson – RIP and Barbra Streisand in the earlier 1977 version which sent this song to Number One this day in 1977.

Love, soft as an easy chair
Love, fresh as the morning air
One love that is shared by two
I have found with you
Like a rose under the April snow
I was always certain love would grow
Love ageless and evergreen
Seldom seen by two
You and I will make each night a first
Every day a beginning
Spirits rise and their dance is unrehearsed
They warm and excite us
‘Cause we have the brightest love
Two lights that shine as one
Morning glory and midnight sun
Time we’ve learned to sail above
Time won’t change the meaning of one love
Ageless and ever evergreen

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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