Daily Brief – US Election

US Election

It would be distinctly odd on the eve of such a closely fought election not to comment on it, but it really is too close to call even though the Trump trade is cited as evidence that he is expected to win(at the time of writing). But what might markets expect once the smoke has cleared post the result being clear assuming Trump does indeed win: US prices up, US inflation up, Oil, Gas and Banking shares up. EUR equities down USD up. If only it were that simple, but that are the best guesses ahead of what is going to be a volatile week for US and Global Markets.

EUR/USD 1.0875.

US Prices

When it comes to garnering votes in this knife edge election in the USA, it is astonishing that Trump at least has not spent more time talking about absolute prices of goods in shops rather than attacking his rival, Harris. It is understandable that Harris since she has presided over those rises has sought to duck the question, but take a look at these price movements since 2020 when President Biden and Vice President Harris took office: Bread, Peanut Butter, Sugar, Beef and Eggs are all up by between 45 and 50%. American voters are less impressed with inflation coming in at 2.1% than they are angry about the absolute level of their staples.

USD/JPY 152.55.

Bank of England

No one hopes more fervently that Chancellor Reeves after dishing out so much bitter medicine last week that the Monetary Policy Committee of the Bank of England does indeed cut interest rates this week at their meeting. Before the Budget the odds on a cut were at 95% but now they have dropped to a 80% probability. Ironically, the purist fine economic minds at the BoE may hold off the expected cut due to the inflationary effect of… Chancellor Reeves’ Budget. Now that IS an irony.

GBP/USD 1.2925.

Climate Diet

Many (?) people are reportedly keen to tailor their diets to sustainability and to cutting their carbon footprint. For example beef production emits 10 times as much greenhouse gases as chicken. Unsurprisingly a plant based diet is the best for the planet and equally a keto diet with high fat and low carbs is the worst. Then there is the paleo-no grains and beans but lots of meat, nuts and vegetables which is pretty good.

However the omnivore where pretty much everything goes and which is followed by 86% of people is in the middle of the pack, so before switching to that vegan diet it might be worth considering not only the planet but also judging by the number of whey faced vegans one sees, whether a plant only regime really suits you.

GBP/EUR 1.1925.

I Can see Clearly Now

Always a crowd pleaser is this number from 1972 when on this day after 8 weeks steadily climbing the charts, it reached the Number 1 spot for Johnny Nash and more importantly for him financially, it went on to sell 1 million copies

I can see clearly now the rain is gone
I can see all obstacles in my way
Gone are the dark clouds that had me blind

It’s gonna be a bright (bright)
Bright (bright) sunshiny day

It’s gonna be a bright (bright)
Bright (bright) sunshiny day

I think I can make it now the pain is gone
All of the bad feelings have disappeared
Here is that rainbow I’ve been praying for

It’s gonna be a bright (bright)
Bright (bright) sunshiny day

It’s gonna be a bright (bright)
Bright (bright) sunshiny day

Look all around, there’s nothing but blue skies
Look straight ahead, nothing but blue skies

I can see clearly now the rain is gone
I can see all obstacles in my way
Gone are the dark clouds that had me blind

It’s gonna be a bright (bright)
Bright (bright) sunshiny day

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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