Having descended from my mountain lair in the Oxfordshire Cotswolds to London, the “Big Smoke”, in order to attend the IFR Awards dinner, I can happily report that all the manifold awards were duly received by their proud recipients.
Yet again £1m was raised on the night for Save the Children and the attempt to consume the world’s remaining stocks of alcohol by the 900 bankers present was very nearly successful.
The evening was a fitting tribute to Keith Mullin, 28-year veteran of the International Financing Review, former editor, latterly editor-at-large and very much the driving force behind the awards in general and their charitable contributions to Save the Children. With the ringing endorsement in his ears of the Princess Royal, the patron of Save the Children which has over the past 22 years benefited from over £25m of donations from the awards nights, Keith is stepping down from IFR.
I know from my own experience that there comes a time when the tall trees need to be felled to let the light through for the benefit of the young saplings and although it hurts, we all need to remember that it is the ongoing renewal cycle that keeps our industry alive and vibrant. As the 30th anniversary of the crash of ’87 approaches, I too must remember that a fair number of those who showed up last night in bib and tucker had not even been born when we were sitting at our screens watching the collapsing markets in amazement. More to the point, old dogs like myself must not forget that that alone does not make them bad people for one day it will be their turn too. I digress.
The UK might have been shaken by the Supreme Court’s deciding against the government with respect to the need to pass the triggering of Article 50 through parliament but it wasn’t. The prime minister might have been happier if she and her government could have acted without a parliamentary pantomime but she knows that there are enough MPs on the government and opposition benches who accept that they are beholden to the will of the people not to try to scupper Brexit. The SNP might be grandstanding in the house but its leader, Nicola Sturgeon, who has no seat in Westminster would be well advised not to overlook that UKIP, although only represented by one MP as opposed to the SNPs 56, took 12.7% of the national vote as opposed to the SNPs 4.7% and this is the British and not the Scottish parliament to which her people have been elected.
Markets more or less took the Supreme Court ruling in their stride; it might make the Brexit process more complicated and in effect also a bit more opaque but it will, despite the Remain camp dancing in the aisles, not reverse the process. Sterling duly wobbled a bit although in a global political environment as uncertain as the one we are currently experiencing, this is not a big thing. Markets really don’t know which way to jump on what reports and with the unrelenting news flow out of Washington to consider, rabbits and headlights spring to mind. In fact, the unpredictable and erratic noises emanating from the White House might easily encourage the remaining members of the EU not to play Brexit too hard and to seek progressive solutions to a changing world rather than digging in and hanging on to a 60-year-old dream that now looks as though, like it or not, it might have been overtaken by the passage of time.
We closed last year’s trading with the 10-year Bund at a maturity yield of 0.208%; that is now at 0.426%, the highest it has been since this time last year when it touched 0.44%. It would be fatuous to declare this new high to represent a sharp sell-off but it clearly displays how easy it is to find oneself in negative total return territory. With, on one hand, the ECB’s Sabine Lautenschläger blowing her hawkish trumpet again - she sees the rebound of the eurozone economy as being well underway and the case for further monetary stimulus as superannuated - and with Pierre Moscovici, on the other, confirming that Greece is still going nowhere in a hurry, the stresses in trying to manage the single currency bloc are not growing easier either. The €220bn in bail-out funds, largely “à fonds perdu”, were supposed to put the Hellenic Republic on an even keel and permit the single currency project to move forward. Athens may be declaring a primary budget surplus, which is admirable in itself but anybody hoping for a sustainable long-term solution to Greece’s fiscal fiasco will have to admit that it is no closer today than it was five years ago.
Burns Night tonight…..and that after the IFRs last night….tough!