So the Mexican President and incidentally the market had it right and the US tariffs threatened for today have been shelved. This had been largely discounted as we wrote last week but still the Peso strengthened against the USD over the weekend.
Disappointing US employment figures on Friday have weakened the USD across the board. Here in the UK the weekend news has been all about the Conservative leadership candidates and their historic drug taking activities led by Gove(blow) and Johnson(puff) supported by Hunt(whatever that gets me chosen). GBP unmoved.
WTI up nearly 2% at the end of last week ending the five day session just below $54. However the combination of global growth concerns on the back of a trade war plus the onward march of shale oil production is likely to cap the price at or below recent highs. As a base the Saudi-Russian pledge to curb output and maintain a base will provide a floor. So for the moment a WTI range of $50-65 will prevail.
Why is it, we have been asked, that global coffee prices are slumping but our cup of coffee from Starbucks/Costa/Manon remains the same price? Looking at the breakdown of wholesale coffee it comes to a total price per cup of 10p of which the grower receives 1p and the roaster 8p with the balance of 1p going largely on transport. By the time you buy it at a cost of £2.50 from a coffee shop, that goes as follows: coffee 10p as above, milk 8p, napkins and stirrers 18p, rent 88p, staff 63p,
Tax 38p and profit 25p. So a case of coffee prices slumping: bad for the growers but no change in price for you as you queue this morning for your cup of coffee.
International Gin Day gave way to National Fish and Chip Day at the end of last week. Much greater focus on the gin by sgm-fx stalwart Charles Porter who was last seen searching for tonic on Friday night. That’s why it’s called GNT, Charles!
This week it’s National Rose’ Day. The cynics on the desk are wondering whether all these days really exist or whether they are simply commercial ploys. Surely not!?
Discussion and Analysis by Humphrey Percy, Chairman and Founder
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