The JF Tobias May Market Decode has been released, containing all the latest JF Tobias insight and analysis on fine wine market performance. It remains the best independent analysis, and helps our clients to stay up to date with what is happening in the fine wine market, and understand fine wine market performance.
- Marginal 8% decrease in people looking to sell fine wine, against last month
- Enquiries to sell totaling: £2,840,005 submitted to JF Tobias in the past month
- HK sale share increases by 14%, UK sale share decreases by 8%
- US-China trade war reescalation reveals fragility of market
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Trump’s Threat Reawakens Trade War Fears
That positive market speculation left investors unmoved was ratified by the surprise threat from Trump to China this week: he will raise tariffs on $200 billion worth of Chinese goods to 25% from 10% on Friday, and will soon target remaining Chinese imports. Whilst this hit Asia-exposed financial stocks and currencies, it may well hit the Asia-exposed fine wine market.
Currently, there seems a much greater chance of volatility extending across the short-term and into the medium-term, were tariffs imposed. Friday may well confirm that. And, whilst we saw an 8% decrease in enquiries to sell, by value we saw an increase of 74%. It is the top tier of investors who continue to reduce risk.
Appreciating Sterling Remains a Threat
Despite markets finding little positive in the latest cross-party Brexit talks, the prospect of an appreciating Sterling remains. The best-performing major currency in 2019, Sterling remains finely poised, trapped between downside domestic political risk and the ongoing upside of a deal being reached. Sterling’s upside potential remains a threat across the medium-term (as UK stock would become more expensive to overseas buyers). With demand likely to soften from mainland China, prices look set to fall if Sterling makes further gains into 2019.
CNY weakens significantly against HKD
Trump’s tweet sent shock waves through HK’s stock market and further weakened buyer confidence. Any reescalation of the trade war, especially heavier tariffs, will have serious consequences for the fine wine market. Of these, the FX rate between the CNY and HKD remains important, as this largely affects demand from mainland China which underpins HK imports from the UK.
Whilst the CNY has strengthened against the HKD significantly in recent months, it weakened significantly on Sunday, in a stark reminder of just how fragile the current Asia-exposed fine wine market is to macroeconomic events.
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