Karl.fawcett @ Moneycorp
Member
- Location
- London
HEDGING YOUR 2017/18 £ OR € BASIC FARM PAYMENT
We have seen sterling depreciate in excess of 10% in the past month due to the EU Referendum, when Britons voted to Leave or Stay.
On the evening of the referendum some of the largest bookmakers in the UK were still offering 3/1 to leave and Evens to stay; The Leave vote won by a 3.8 percentage point margin which then started the ‘Sterling Slide’
However over the past few weeks since Sterling hit the Year low of 0.91p we have received an increase in inbound calls from Farms looking to lock in 2017’s Single Farm Payment.
We have seen market lows of 1.0989 (0.91) excluding the flash crash and highs of 1.2091 (0.827) typically clients will hedge 30-50% of each client’s payment – both prices already keener than last year’s BPS rate given, they will then assess the markets, listen to our guidance to make their own decision on what to do with the 50-70% remaining.
Understandably there has been hesitation leading up to the triggering of Article 50, we see a deterioration in political rhetoric around Brexit as a key catalyst for further sterling weakness however, there is one thing that is being forgotten in 2017, the European parliamentary elections.
This is taking place across multiple European countries, but none more important than France and Germany's.
The Democratic French are under pressure from the far right National Front led my Marine Le Pen as well as the home favourite Republican party leader Francois Fillion. Both have displayed a stance to display a more sovereign state. This could cause an increase in Euro weakness and cause Sterling to pull back some of what it has lost.
Also in Germany, Angela Merkel has opted to run for a fourth term, we are beginning to see her back pedal on her policies to drag them to a more right wing view. She was put on the ropes the back end of last year when her Party lost locally in Berlin to the heavy right wing Alternative for Germany party. Following on from the Berlin's Christmas Market Massacre could we see the Party that is Anti EU and Anti Euro take control?
You may believe these to be outlandish and drastic outcomes, however remember this, the odds in Jan 2016 for a vote to leave the EU, Donald Trump to win Presidency and for Leicester city to win the premier league was 3 Million to 1. This proves stranger things do happen. Do not leave yourself to the mercy of the markets.
Happy to have answer any questions you may have, provide you with our company information and accounts; you will also be able to find my previous Thread discussing the matters over the past 6 months.
Elliott Leonard and myself will be your contact if you do wish to get in touch 0203 823 0368, please mention TFF when speaking with reception.
Alternatively we will be at LAMMA 2017 on stand 724, pop by for a quick chat!
Look forward to hearing from you,
Karl Fawcett
Account Manager
Moneycorp Agriculture Desk
0203 823 0368
[email protected]
[email protected]
_________________________________________________________________________________
Moneycorp, 5th Floor, Zig Zag Building, 70 Victoria Street, London, SW1E 6S
We have seen sterling depreciate in excess of 10% in the past month due to the EU Referendum, when Britons voted to Leave or Stay.
On the evening of the referendum some of the largest bookmakers in the UK were still offering 3/1 to leave and Evens to stay; The Leave vote won by a 3.8 percentage point margin which then started the ‘Sterling Slide’
However over the past few weeks since Sterling hit the Year low of 0.91p we have received an increase in inbound calls from Farms looking to lock in 2017’s Single Farm Payment.
We have seen market lows of 1.0989 (0.91) excluding the flash crash and highs of 1.2091 (0.827) typically clients will hedge 30-50% of each client’s payment – both prices already keener than last year’s BPS rate given, they will then assess the markets, listen to our guidance to make their own decision on what to do with the 50-70% remaining.
Understandably there has been hesitation leading up to the triggering of Article 50, we see a deterioration in political rhetoric around Brexit as a key catalyst for further sterling weakness however, there is one thing that is being forgotten in 2017, the European parliamentary elections.
This is taking place across multiple European countries, but none more important than France and Germany's.
The Democratic French are under pressure from the far right National Front led my Marine Le Pen as well as the home favourite Republican party leader Francois Fillion. Both have displayed a stance to display a more sovereign state. This could cause an increase in Euro weakness and cause Sterling to pull back some of what it has lost.
Also in Germany, Angela Merkel has opted to run for a fourth term, we are beginning to see her back pedal on her policies to drag them to a more right wing view. She was put on the ropes the back end of last year when her Party lost locally in Berlin to the heavy right wing Alternative for Germany party. Following on from the Berlin's Christmas Market Massacre could we see the Party that is Anti EU and Anti Euro take control?
You may believe these to be outlandish and drastic outcomes, however remember this, the odds in Jan 2016 for a vote to leave the EU, Donald Trump to win Presidency and for Leicester city to win the premier league was 3 Million to 1. This proves stranger things do happen. Do not leave yourself to the mercy of the markets.
Happy to have answer any questions you may have, provide you with our company information and accounts; you will also be able to find my previous Thread discussing the matters over the past 6 months.
Elliott Leonard and myself will be your contact if you do wish to get in touch 0203 823 0368, please mention TFF when speaking with reception.
Alternatively we will be at LAMMA 2017 on stand 724, pop by for a quick chat!
Look forward to hearing from you,
Karl Fawcett
Account Manager
Moneycorp Agriculture Desk
0203 823 0368
[email protected]
[email protected]
_________________________________________________________________________________
Moneycorp, 5th Floor, Zig Zag Building, 70 Victoria Street, London, SW1E 6S
- Moneycorp is the UK’s largest integrated FX provider specialising in pricing and hedging solutions
- We are owned by Bridgepoint, a pan-European private equity investor with investments valued up to €1Bio
- In 2013 we acquired Thomas Cook’s international payments division and acquired the contract to white label a payments offering for the UK Post Office.
- moneycorp is listed in the Sunday Times Grant Thornton Top Track 250 – the only FX international payment provider included in the league
- Turnover in 2015 of £22.6bn, net profit £11,665,000, net worth £43,543,000
- Regulated by the FCA, audited by PWC
- Access to 10 liquidity providers, including Goldman Sachs, Nomura and Societe Generale (i.e. not tier 1 high street banks)
- Attending LAMMA 2017 - Stand 724
