Back in action

Good morning

Well it’s been nigh on three weeks since my shoulder replacement operation and I’m starting to feel more normal.  Thanks to all for their messages and apologies for not replying to all individually.  Given I am right-handed and the operation was on my right shoulder, doing even the simplest of tasks has proved to be rather difficult and even though I was back at my desk last week, typing was slow, arduous and a tad painful, so I held off the return of my daily report until now.  I’ll try to keep it daily from now although it may well be later than usual as it still takes longer to get it finished.  I’ve not yet embraced the technology that would allow me to dictate the report although I’m sure there is some straightforward stuff out there.

So, what has happened since i went under the knife?  My hopes that the world would be in a similar place as to where I had left it were unfortunately dashed, with the US/Israeli attacks on Iran last weekend.  Only a select few will really know whether the attacks were fully warranted and well-thought through.  The gut feel is that, as with anything Trump is involved in, it was a rash decision with little forethought and even less thought about the aims and exit strategy.  In reality, there would have been plenty of forethought and planning , certainly for the initial stages which seemed to rely on Israeli intelligence in bombing the Iranian leadership.

The aim is ultimately for a regime change.  There is desire among many Iranians for this, as evidenced by the protests in January which unfortunately saw the authorities kill some 30,000 of their own people in an attempt to quell any uprising.  I cannot help but think those 30,000 people would be useful on the streets now, rather than January.  A regime change really needs people on the ground as well as jets and missiles in the air.  So, is a regime change possible?  We’ve seen the difficulties in such ideas before now and it won’t get any easier. 

We’ve had the announcement of a new Supreme Leader, Khamenei, who happens to be the son of the previous Ayatollah.  Given his father was killed in US-Israeli airstrikes, it would be unlikely Khamenei will be anything other than anti-West and certainly not one to introduce the leadership changes the West are hoping for.  If a regime change is not possible, the US and Israel could back out and claim a victory having scuppered Iranian plans for nuclear weapons, for the time being at least.  But we’d all know that wasn’t really the aim.

Oil prices are firmly higher as a result of the Iranian conflict.  WTI and Brent, which were around $62 and $67 respectively on the day of my operation have both seen highs this morning of around $119.50, the US price closing the gap with Brent on the idea that US oil will see an increase in demand.  G7 nations are due to hold a meeting today to discuss high oil prices and dwindling oil reserves.  Gas prices have pretty much doubled since the attacks started, while equity prices have dropped. 

In terms of currencies, the US dollar is stronger across the board.  GBPUSD and EURUSD are down around 300 points from before my operation, from 1.3620 and 1.1850 to 1.3330 and 1.1550 although they do remain off the recent lows.  GBP had initially dropped against the single currency to below 1.1400 is now up at 1.1560, which is a bit of a surprise given the UK’s growth forecast cuts that came with Reeves’ spring statement last week, those revised forecasts coming before the Iran war started and therefore likely to be the very best we can expect.  USDJPY has pushed firmly higher up to the mid-158’s from levels nearer 152.50.  Both AUD and NZD dropped pretty sharply on the initial attacks but have recovered a little, with GBPAUD and GBPNZD now 1.9025 and 2.2600.

Both US and UK bond yields are sharply higher, I presume the threat of higher inflation led by higher energy pricing is putting paid to any rate cut talks for the time being although at the risk of being humiliated by readers with a better grasp of economics than I have, I would actually think that lower rates would actually help even if we do see higher inflation as a result of energy prices.  Those higher prices are not here because of any push higher in economic activity or demand, just a shortage of supply, therefore raising rates will do little to really temper overall demand.  Warsh, Trump’s new Fed Chair nominee, will have his work cut out. 

On the subject of hard work amidst difficult times, England’s rugby team are in a spot of bother in the Six Nations having lost to Scotland, Ireland and now Italy for the first time.  England had been my choice to lift the trophy, instead it’ll be a battle with Wales to see who will finish last, something that has not happened to England since the Six Nations began in 2000.  In cricket, after a poor start to the T20 world cup, England actually put on a spirited performance in the semi-final against eventual winners India, coming just seven runs short of India’s total.  The final was nowhere near as close, with India putting on 255 and New Zealand managing only 159 runs in reply.  

As for football, well I had a bet on Spurs being relegated when odds were 12-1, not really believing they would be that bad.  Those odds are now down to 2-1 after a horrendous run of form that sees them just one point away from relegation and perhaps even more worryingly, looking like a bunch of players who have completely lost their way and their joy of football.  They can’t go down….surely?  Anyway, we’re still in the Champions League and face Atletico Madrid in the last 16 tomorrow evening.  Winning the Champions League and being relegated all in the same season, that would be a real feat!

Arsenal meanwhile are still flying high with a quadruple still possible.  St Totteringham’s Day, the day when it is statistically impossible for Spurs to finish above Arsenal, came on 1^st March, the earliest ever, which is as disappointing for Spurs fans as it is joy to Arsenal fans.  Can’t get any worse really, can it?

I’ll leave things there for now as I’ve gone on far too long and any more typing may take me into tomorrow!  Pleased to be back, I hop normal service will resume from now on but do bear with me if I’m still a little slow.

Regards

Richard