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Morning Brief – European Central Bank News Conference

European Central Bank News Conference


While economic policy was left unchanged and no further stimulus was announced yesterday, it was clear that that was firmly on the agenda for the next ECB meeting in December. As a reminder of the numbers the ECB has set aside EUR 1.35 Trillion for bond purchases in the next 8 months until June 2021 and of that war chest, has EUR 700 Billion that has not yet been used. Madame Christine Lagarde was under great pressure at the news conference to commit to keeping monetary financing conditions easy while not raising expectations too much in case that further support be discounted and seen as a disappointment.



Catalonia: Border Closure


Under the Statute of Autonomy, Catalonia is designated a nationality and as is well known has already had a tilt at independence from Spain in 2017. Yesterday Catalonia announced a 15 day ban on entering and exiting its territory to try and constrain the spread of Covid. Catalonia has a population of 7.5 Million and covers an area of 12,400 Square Miles. Catalonia as the economic powerhouse of Spain plus the measures already announced in France, Germany and Italy means that the four largest countries in the EU are experiencing real economic pain. Consequently the Euro has fallen versus USD at one stage breaching 1.17.



Yachting anyone?


Aching to release your inner sailor and break out your blazer and white trousers? Today is the last day for a VAT saving on yachts booked in Italy for next year.

VAT is currently levied on charters at 6.6% but tomorrow that rises to 22%. So if you fancy taking 11 pals for a treat on a 93 metre beauty called Lady S, a week will cost USD 1.47 Million but think of that USD 226,380 VAT saving! Might cover your tips and bar bill! On second thoughts probably not!



Debbie Harry and Blondie


Who could forget Debbie Harry and her distinctive vocals on Heart of Glass, perhaps the best song on the New York new wave punk rock band Blondie’s 1978 album, Parallel Lines? Written by Debbie Harry and her on off lover and lead guitarist Chris Stein, Heart Of Glass was a hit and in post Covid times and a return to weddings and parties will remain a firm favourite not to mention a public menace with men of a certain vintage reprising their youth with over enthusiastic Dad dancing….!

Once I had a love and it was a gas
Soon turned out had a heart of glass
Seemed like the real thing, only to find
Much o’ mistrust, love’s gone behind

Once I had a love and it was divine
Soon found out I was losing my mind
It seemed like the real thing, but I was so blind
Much o’ mistrust, love’s gone behind

In between
What I find is pleasing, and I’m feeling fine
Love is so confusing, there’s no peace of mind
If I fear I’m losing you, it’s just no good
You teasing like you do



Have a Great Weekend and….Happy Halloween!




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Tumble



Stock, currency and bond markets alike burst into life yesterday. Following the close of the German and French major stock market indexes some 4% in the Red, the price of assets across the globe started to reflect growing discomfort with the macro economy. US stock futures had initially shrugged off the sell-off taking place in Europe but equities succumbed to selling pressure at the US open with the S&P 500 eventually closing down 3.5% in line with France’s CAC index of blue chip stocks. Completing what would be referred to as a risk-off move, safehavens rallied at the expense of emerging market currencies. The US Dollar claimed upwards of half a percent back from the Euro and, at the peak of the sell-off, stood almost 1.5 cents stronger against the Pound. Commodity and emerging market currencies including the antipodeans (AUD&NZD), loonie (CAD) and the Rand also suffered. So what got markets in such a fuss?


Throughout the week rumours developed suggesting that initially France had not ruled out a full lockdown of the economy. These embers grew into the conjecture that France was now actively considering a return to a variety of its earlier lockdowns and eventually culminated in an announcement from French President Macron. Emmanuel Macron announced that from this Friday, people would only be allowed to leave home for essential work or medical reasons. The lockdown follows a pattern of rising cases and infection rates across Europe alongside much of the globe as China also announced its highest number of new daily cases in over two months.


Over the last week, the EU, Britain, Norway, Switzerland and Iceland have accounted for over 1.1 million cases of the virus alone. The rising number of new infections in Europe also prompted Germany to join France in introducing new lockdown measures. Stopping short of a full lockdown, Chancellor Merkel trod a path more similar to the UK’s ‘very high’ coronavirus threat level, closing parts of specific industries to limit the spread. The backdrop of increasing restrictions across Europe prompted markets to price in the reality of the second-wave of infections and the plethora of economic/financial implications therein. Against the gloomy backdrop, risk assets deteriorated. The Pound was particularly hard hit despite introducing no new measures due to the uncertainty surrounding the future of its international trading schedule following the end of the transition period this year and the rising number of domestic infections.


Several months ago, when the US was suffering record outbreaks of the virus, European assets were able to secure considerable gains at the expense of the ailing United States. However, given the rising number of cases and the risk of an election only a few days away the US is also under pressure. The risk that the election poses to US assets is compounded by the news of the reservation of millions of US Dollars by both Presidential campaigns spending to fuel the inevitable legal battle in the result of a contested election result on Tuesday. US markets were also taking note of the risk of potential government negligence in the remaining two month’s of Trump’s term in office should the President not secure a second term. The tightening of the polls also led US markets to price in the risk that Biden takes the White House but falls short of securing major elected institutions including the Senate, potentially limiting the next administration’s power to rule.




Discussion and Analysis by Charles Porter

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Morning Brief – China Communist Party

China Communist Party


Today is Day 3 out of the 4 Day meeting of the CCP and where the Central Committee will decide on the economic and social policy goals for the next 5 years.

Announcements to watch out for:

GDP goals– having missed the last 6.5% goal between 2016 and 2020, the question is whether it will be left at the same level.

Innovation-Technical Innovation is at the top of the priority pile and the words will be worth analysing.

Commodities– Both Pig and Grain reserves have been heavily depleted and need to be restored. Expect announcements on international contracts.

Domestic Consumption-Higher household income will drive this and the creation of higher paid jobs particularly in technology and finance are likely to be targeted.

Reforms-Mobility of labour taken for granted in the West is not so easy in China and current laws need to be loosened. Reforms in both land and the establishment of proper capital markets are also to be considered.

Greying population-the 1 child policy is still in place as is retirement ages of 60 for men and 55 for women.

Climate-the carbon neutral target announced recently by President Xi will be on the agenda so expect restrictions announced on greenhouse gases.

Political Succession-President Xi’s current term ends in 2022. A sign of his political successor is not expected.

At 6.71 versus USD the CNY is enjoying its strongest level for the past 2 years and while currently buffeted by expectations of the outcome of the US Presidential Election is well above its 7.17 low exactly 5 months ago at the end of May.



The 100+ Club and Africa


Which countries in Africa have populations of greater than 100 Million? Nigeria at 200 Million is by far the largest with Ethiopia next at 112 Million followed by Egypt at 100 Million. Then it starts dropping sharply with Democratic Republic of Congo at 87 Million and South Africa at 58 Million. In the fight against Covid the most telling statistic is that Nigeria spends just $74 per capita on health. Compare that to another oil producing nation but this time in the West: Norway one of the smaller European countries with a population of 5.4 Million spends $8000 per capita. So when we read about the fear of the Covid pandemic in Africa we should understand that in that continent of 1.3 Billion people, there are virtually no intensive care facilities outside Egypt and South Africa. The average age of the population in Africa is 19.4 years which is half that in the West. Positively and long may it last, Africa accounts for 17% of the world population and only 3.5% of Covid deaths.



Sonny and Cher


Back in 1965 Sonny and Cher released this song which went pretty much straight to Number One. While Sonny and Cher did not last the course, this song certainly did, going Gold by selling 1 Million + copies:

I Got You Babe

They say we’re young and we don’t know
Won’t find out until we grow
Well I don’t know if all that’s true
‘Cause you got me and baby I got you

Babe, I got you babe, I got you babe

They say our love won’t pay the rent
Before it’s earned our money’s always spent
I guess that’s so, we don’t have a plot

But at least I’m sure of all the things we got

Babe, I got you babe, I got you babe

I got flowers in the spring
I got you to wear my ring
And when I’m sad, you’re a clown
And when I get scared you’re always around
So let them say your hair’s too long
I don’t care with you I can’t do wrong

And put your little hand in mine




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – 8 – Lucky for some!

8 – Lucky for some!


Not for others! Considered the luckiest number of all in China, the number 8 is a forbearance of prosperity and fortune. It’s pronunciation, ‘Ba’ is similar in sound to a word pronounced ‘Fa’, meaning to make a fortune. The belief in the good luck that the number 8 will bring is so deep routed that number plates in China containing arrangements of this number routinely exchange hands for sums of money in the millions of Dollars. In Turkey, however, I suspect the association with the number 8 has turned increasingly sour this week. At market open yesterday, continued tensions surrounding Turkey pushed the Lira past 8.0 to the Dollar for the first time ever.


In just one year the value of the Lira has moved from <6 to the Dollar to in excess of 8 today. 5 years ago you would have needed less than three lira to comfortably purchase a US Dollar. However, the political economy of President Recep Erdogan has allowed the currency to erode significantly. The most recent rise in tensions that has pushed the Lira through the psychological level has been a butt of heads between the Mr. Erdogan and other European officials. Comments from Turkey’s authoritarian leader that French President Macron needed mental treatment following comments about Paris’ recent terror incident prompted the recall of the French ambassador to Ankara. As tensions continued to rise during yesterday’s trade the Lira’s slide did not abate with the currency losing a further 1.5% throughout the day.


The Turkish President also encouraged citizens to boycott French goods. The rising tension between Turkey and France could have greater implications that we might suspect at face value. The European Union, in its multi-annual financial framework, provides for billions of Euros over only a handful of years in direct assistance to Turkey. The reason for this bilateral aid is to ‘assist Turkey in dealing with’ its challenge of hosting over 4 million refugees. Rising tension between Turkey and its European neighbours could therefore disturb the fragile solution of subsidy in return for maintaining the border between Turkey and the Union. If this arrangement were destabilised the ramifications for development in Turkey and the migration crisis in Europe could be disastrous. Pushing his luck even further, Mr. Erdogan also wielded the cattle prod towards the US, daring them to deliver on threats of further sanctions for the nation’s role in the conflict between Azerbaijan and Armenia.


Despite introducing punitive measures to undermine the short-selling of the Lira as we wrote about recently, the currency pushed through the level comfortably yesterday. Against a backdrop of negative interest rates in real terms, there is little to entice anyone to hold a positive exposure to the Lira exaggerating its vulnerability.




Discussion and Analysis by Charles Porter

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Morning Brief – 5G-warp speed tech for 5G or 5th Generation Users

5G-warp speed tech for 5G or 5th Generation Users


In the hell that is Stratford City, East London on Saturday afternoon at the Apple Shop, my role as (supportive) chauffeur on the mission to secure a new IPhone 12 Pro, allowed me ample time in the queue to research what a mind bending improvement in speed from 4G to 5G actually means. 5G signals are transmitted on a broad range of frequencies from low band to medium band to high band which is known as millimeter wave. Each band has its own characteristics: low band signals can travel through walls and penetrate deep into buildings; high frequencies are limited in range but are already achieving speeds of 4 gigabits per second which is about 4 times faster than today’s fiber optic desktop connections. 5G is being rolled out globally and is being hailed as the most significant step forward in mobile technology since…..4G. What I can confirm is that the new IPhone 12 Pro is a very handsome looking piece of kit, is extremely fast, comes in a range of nice colors-and lastly has at least one very satisfied new owner.



Ferrari Roma


The latest and most stylish two door sports car from Ferrari has both Ferrari and motoring journalists reaching for the Thesaurus to find the appropriate degree of hyperbole for the Ferrari target buying audience. Pictured in various locations appropriately enough in Rome, the Roma looks terrific and is notable by the complete absence of any people in the publicity shots-not hard in these times of Lockdown and non socializing. Normally Ferrari security personnel would struggle to hold enthusiastic fans back from this new car which costs a touch under GBP 171K or EUR 188K or USD 345K. Meanwhile my prize for the most creative writing goes to H.R.Owen which describes Ferrari’s new model as follows:

The Ferrari Roma speaks in an extremely modern language accompanied by an authentic and refined style

USD 345K and it talks too!



Herman’s Hermits


Today is original Hermits member, vocalist and rhythm guitarist Keith Hopwood’s 74th birthday. The Manchester band was famous both for its great consistent success and also its bitter factional disputes which saw a revolving door of talent to rival that of any investment bank-Keith Hopwood left in 1972. Back in 1965 “Mrs Brown You’ve got a lovely daughter” was a hit for the Hermits reaching Number 1 on the US Billboard Hot 100:



Mrs. Brown you’ve got a lovely daughter
Girls as sharp as her are somethin’ rare
But it’s sad, she doesn’t love me now
She’s made it clear enough it ain’t no good to pine


She wants to return those things I bought her
Tell her she can keep them just the same
Things have changed, she doesn’t love me now
She’s made it clear enough it ain’t no good to pine


Walkin’ about, even in a crowd, well
You’ll pick her out, makes a bloke feel so proud


If she finds that I’ve been round to see you (round to see you)
Tell her that I’m well and feelin’ fine (feelin’ fine)
Don’t let on, don’t say she broke my heart
I’d go down on my knees but it’s no good to pine


Walkin’ about, even in a crowd, well
You’ll pick her out, makes a bloke feel so proud


If she finds that I’ve been…




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – US Election

US Election


With just 11 days to go to the US Presidential Election, every pundit worth his salt is drawing up the market risks and probabilities of the outcome despite the fact that no two elections can be the same. So making the assumption that more than enough has already been expended in the way of intensive analysis, here are 3, yes just 3, things to consider from previous elections: 1. Historically if a President has presided over an economy which has not entered a recession in the 2 years before the election, he will be re-elected. 2. If the performance of the S&P 500 is positive in the 3 months up to the election, the President will be re-elected. 3. If a President is re-elected, the US stock market performs more strongly than if a new President is elected. So, as can be seen with the US economy officially having entered a recession in Q1 this year, according to the National Bureau of Economic Research, the first test goes to Biden. The second test is in favour of Trump as the market has gone up by 3% since the beginning of August. So a tie on the first two with the third test’s outcome dependant on whether prosperity outweighs change in the minds of the electorate. History suggests that in the end most people vote with their wallets, but as everyone agrees, this election is the same as all the others…different.

Despite the negative polling for him, for the time being Trump remains in the race because….he is the incumbent President.



Hermes-A Tale of our Times


Luxury goods company Hermes famous for its (relatively affordable $450) silk scarves and (rather less affordable $12,000+) handbags is seeing more demand for its goods in the latest quarter after a collapse in Q2. However within that Q3 improvement it is a mixed picture: sales up 25% in Asia but a fall of 15% in Europe and also a fall of 5% in the Americas. Sales totalled $ 2.13 Billion in Q3 and Hermes shares are up 20% since January 1. Because Hermes is the first luxury goods company to report, the pressure has been piled on the other companies and particularly on those who have not had that same pick up in turnover in Q3. And for those of you wondering about the picture within Europe? Yes sales in France of Hermes goods are down an unprecedented 23% in Q3.

Mon dieu the honour of France is at stake! First the indignity of Emily in Paris and now this.



If You Leave Me Now….


Yes it was this day in 1976 that rock band Chicago renamed from their original name of the less than catchy and also confusing Chicago Transit Authority, stormed into both the US and UK charts. In fact the name change was more to do with threatened legal action from the actual Chicago Transit Authority- no sense of humour those mid western American transit titans. The name change paid off in every way and If You Leave Me Now became a global staple for clubs and parties in the small hours and here’s why:

If you leave me now you’ll take away the biggest part of me
No baby please don’t go
And if you leave me now you’ll take away the very heart of me
No baby please don’t go, no I just want you to stay

A love like ours is love that’s hard to find
How could we let it slip away?
We’ve come too far to leave it all behind
How could we end it all this way?
When tomorrow comes and we both regret
The things we said today



Have a great weekend, wherever you are!




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Interference



We have become increasingly accustomed of late to sideswiping headlines gripping price action and throwing currencies in entirely opposite directions. The past 24 hours provided no respite to the torrent of headlines. But the salience and long run ramifications of yesterday’s major headlines could be far more significant than we are used to. The two major new stories as European markets open this morning concern meddling in the US election and the resumption of trade talks between the UK and the European Union.


Last night John Ratcliffe, director of national intelligence in the United States, warned voter registration information had been compromised. In an impromptu press conference, the heavyweight intelligence official disclosed that voter information – names, contact details etc. – had been obtained by Iran and Russia. The claim in turn was that these nations were exploiting this data in order to “intimidate voters, incite social unrest, and damage President Trump”.


One instance of this interference is supposed to have come in the form of emails sent to voters in Florida and Alaska threatening the recipients to vote for the incumbent president, “or else”. The campaign was sophisticated with the emails purporting to be sent from far-right group, the Proud Boys. Trump was condemned in the first Presidential debate for failing to condemn “white supremacists and militia groups” when questioned. Instead, Trump responded directly to the group in his response, calling upon them to “stand back and stand by”. If this email really were initiated by the Iranian state to incumber Trump and exploit concerns over his comments, the implications could be severe for the election.


When dealing with a beast as complicated as the US election, assessing the potential impact of a claim that Russia and Iran are holding voter information is far from straight forward. Firstly, John Ratcliffe is a staunchly conservative politician who previously served in Congress as a Representative for Texas. Having only taken the office of Director of National Intelligence this year, we must question the validity of the claim. From what turned out to be an email imploring the recipient to vote for Trump has, due to context and the threatening nature of the email, become something that would be expected to deter the voter away from voting for Trump. However, what if the statement itself is false and the conservative politician is using a story of intervention by Iran and Russia to drum up sympathy for the America first preacher?


The immediate impact upon currency markets due to the new wave of uncertainty surrounding the US election that is now less than two weeks away has been a new wave of defensive demand into the Dollar and other safe haven assets. However, it will ultimately depend upon how the US electorate some 250 million strong synthesis these events that will determine its true impact.


In the UK yesterday towards the European close we learnt Brexit talks would resume. PM Johnson at the EU summit last week had claimed his negotiators would not entertain further talks given European negotiator’s unwillingness to compromise. The resumption of negotiations therefore brought with it hopes of further concessions for a more constructive UK-EU post-transition trade deal, lifting the Pound to one month highs.




Discussion and Analysis by Charles Porter

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Morning Brief – Alphabet



It sounds dry stuff at first glance but on closer study smacks of chicanery or at the very least political opportunism. But with the US Department of Justice filing an anti trust case against Alphabet’s Google two weeks before the US Election in which one of the candidates has been outspoken on holding Big Tech to account, the timing is at the very least noteworthy. If you are wondering why and what, the answers are as follows: Google commands a position in which 90% of all on line searches and 95% of all mobile phone searches are made on the Google platform. As for the what, nothing is being ruled out on this one including the enforced break up of Google. Now THAT would be something. Google shares are at $1535 against a 52 week high of $1733 and a low of $1013. And the market cap? USD 1.039 Trillion-so, so far the market is sanguine on this DOJ challenge.



US Dollar


Markets are gradually beginning to enter the stage of acceptance that a US economic stimulus is on hold until after the election. That weighed on the USD and it duly slipped for the second day in a row with the EUR back over USD 1.18 today. GBP appreciated negligibly versus USD as the position on Brexit negotiation is unchanged with neither party willing to engage. Meanwhile on the other side of the world the AUD dropped 0.53% on expectations of forthcoming monetary easing by the Reserve Bank of Australia.



Lulu: Boom Bang a Bang!


The assumption is that pop musical tastes in the USA and the UK are broadly similar, but this is not necessarily the case. Going back to this day in 1967, Lulu who as one of Scotland’s top international stars won Eurovision with Boom Bang a Bang, starred in the newly released film To Sir With Love in which she also sang the title song. That song went straight to Number 1 in the US Billboard chart where it stayed for 5 weeks and sold 1 million records. And in the UK, Lulu’s home market? The song did not even chart!

Maybe these lyrics explain it:


Those schoolgirl days of telling tales and biting nails are gone
But in my mind I know they will still live on and on
But how do you thank someone who has taken you from crayons to perfume?
It isn’t easy, but I’ll try


If you wanted the sky I would write across the sky in letters
That would soar a thousand feet high ‘To Sir, With Love’


The time has come for closing books and long last looks must end
And as I leave I know that I am leaving my best friend
A friend who taught me…


Boom Bang a Bang definitely a step up… and it sold more than 5 million records worldwide!


Come closer, come closer and listen
The beat of my heart keeps on missing
I notice it most when we’re kissing
Come closer and love me tonight
That’s right
Come closer and cuddle me tight
My heart goes
Boom bang-a-bang, boom bang-a-bang
When you are near
Boom bang-a-bang, boom bang-a-bang
Loud in my ear
Pounding away, pounding away
Won’t you be mine?
Boom bang-a-bang-bang all the time




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Firebreak



Ireland and Wales have both announced firebreak lockdowns designed to stop the spread of Covid-19 in its tracks. The logic is simple: with the lifecycle of the virus in humans estimated to be a little over 10 days, if every member of the population follows the lockdown perfectly the virus should be eliminated within a couple of weeks. Short, sharp lockdowns have not been common place on the continent and the measures will be an important litmus test for their efficacy moving forward. The logic of a firebreak lockdown however, relies upon several assumptions: members of the public living alone, abiding by the lockdown perfectly, and the assumption of a ten day lifecycle being accurate. Not many loose ends then…


Given the long asymptomatic incubation period of the virus it is perfectly possible that one member of a household enters the firebreak lockdown carrying and incubating the virus. The UK government estimates that persons are infectious and can therefore pass on the virus two days before they begin to show symptoms. Based on these two facts, it is perfectly possible, indeed likely, that one member of a two-person household could enter the firebreak lockdown, become infectious towards the end of it and pass the virus to their cohabitant who would at that point be free to pass it onto the rest of the country that is now out of lockdown. So a two-week circuit breaker logic whilst seemingly simple and elegant actually doesn’t work even in the smallest of multiple occupancy households. When the number of inhabitants rises yet further, the probability of success falls and the likelihood of public transmission post-micro-lockdown rises considerably. The only effect being those infected during the circuit break lockdown are changed from strangers to families and housemates.


At the opportunity cost of 4% of a year, a two week lockdown is not small speed bump in an economy’s path. The threats to success in Wales, with an average household size of 2.27 persons and Ireland’s 2.75 persons threatens to undermine the efforts entirely. Purely from a household size standpoint you would need a 32 day and 39 day lockdown in Wales and Ireland respectively on average, with multiple occupancy dwellings needing considerably longer. That is still, of course, before we look at the level of adherence, assumptions about infectious horizons and the degree of essential industry that cannot stop. Our two-week fixer-upper has therefore suddenly transitioned into a return of March and April’s seemingly endless lockdown.


At the risk of being branded another markets-turned virology guru, I ask you to afford me a final paragraph and I’ll get to the point. Firebreak lockdowns carry a large risk of failure that will likely present an opportunity cost to economic growth without a meaningful decrease in the level or rate of infections. Therefore, countries that adopt such measures are likely to be held out of favour by currency markets given the unnecessary obstacle to growth without altering the national threat posed by the global pandemic. Ireland and Wales are both parts of much larger monetary systems. Adopters of the Euro and Pound respectively, these experiments are unlikely to alter the course of these currencies considerably. They will however provide simultaneous litmus tests concerning the efficacy of circuit breaker lockdowns which other countries more directly correlated with their currencies would do well to heed the results of.




Discussion and Analysis by Charles Porter

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Morning Brief – China



People’s Bank of China Head, Yi Gang stated this weekend at an online banking seminar to the G30 what many in the markets already suspected: despite Covid starting in China and almost a year ago having shut down large parts of China’s economy, not only is China back and enjoying an expansion in its economy, Yi Gang expects the economy to grow by 2% in 2020. Fortunately that in turn will benefit the other global economies which many will feel is small recompense for the spread of the virus globally.

Unsurprisingly Chinese Renminbi is enjoying its best level against the USD this year and is currently at 6.70 with the direction of travel clearly towards a still stronger CNY in 2021.

SGM-FX having taken these particular tea leaves on board has in the past months added both Mandarin and Cantonese language capabilities to the languages already on offer to our customers around the world.





Meanwhile in Europe, hard hit Italy is expecting a contraction of 9% in its economy in 2020. Next year the ruling coalition of the Five Star Alliance and the Centre Left PD party is expecting growth of 6%. Late on Saturday night the Italian government approved a package of measures that will see EUR 40 Billion of economic stimulus in 2021. Apart from the ever increasing amount of Italian government borrowing, markets are still pondering the productivity issue that Italy faces- not enough.



New Zealand


As expected Jacinda Ardern won a landslide victory in NZ this weekend and returns to office with a clear mandate to govern for the next 3 years. Less clearcut is how, having won on the ticket of Going Early and Going Hard against Covid, she will rescue the NZ economy. NZD 62 Billion or USD 41 Billion has been assigned to bolster the economy and keep people in work through a package of loans and other measures. Government borrowing will break the hitherto sacrosanct level of 20% of GDP where it stood at the end of 2019 and is forecast to rise to 55% of GDP by 2024. Tourism is a core component of the NZ economy and the success of the shutting of the NZ borders to foreigners in fighting Covid, has of course crushed the tourist industry. NZ will need more than her mantra of compassionate leadership as will the NZD. USD bought NZD 1.7771 on 24-03-20 and although it is now back to 1.51, the ongoing impact on the NZ economy of fighting Covid(albeit successfully) must give rise to expectations of a lower exchange rate.



Ned Kelly


It was 50 years ago this week that the film, Ned Kelly about the famous outlaw was released starring Mick Jagger. It bombed and was panned by the critics with (now Sir) Mick being told that he should stick to strutting on stage and singing Street Fighting Man rather than trying to play the role of a tough Australian bushranger. One of the kinder reviews described Mick Jagger as being……”as lethal as last week’s lettuce.”




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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