SGM-FX insights

Deal or no-deal? Talks have concluded between the US and China in London. President Trump has welcomed the deal, claiming the US has secured access to rare earth materials and tariffs have returned to sustainable levels. However, the announcement of a resolution during talks has lacked two key elements that are leaving many scratching their […]

UK Employment Real life consequences of policies that fulfil Chancellor Reeves’ agenda: this time we will not dwell on the plainly evident politics of envy stuff about targeting the higher earners, stuffing the non-doms, and even deciding to double tax those wishing to pay for private education or invest in property through second homes. This […]

Fading Dollar weakness The market is beginning to take risk in its stride once again. We can see that from benchmark equity indices retracing all time highs, particularly cross border asset baskets. Realised volatility within FX and fixed income is coming in below implied volatility and in turn reducing the cost of optionality. There remains significant […]

Germany In a scenario similar to those Germans bagging poolside sunloungers by getting up early, the German economy had a more than decent Q1 as the canny Germans got in ahead of the TT or Trump Tariffs. However, it has all come to a juddering halt in April as almost all economic indicators fell back […]

Euroland Interest Rates Appropriately for ECB meeting day, the EU occupies much of our commentary today. Ahead of their deliberations, the ECB council members were faced with an environment of sluggish growth and low energy costs and a strong EUR keeping a lid on price pressures, leading to lower inflation but leading inevitably to lower […]

Ring Ring A deal between the US and China on trade still proves to be illusive. The 90-day truce that both sides negotiated at the beginning of May allows for a further two months of negotiating before the deadline becomes a real risk. However, what has likely concerned the market meanwhile is the lack of […]

EU Inflation Paving the way for a 25bp rate cut tomorrow, EU inflation came in at 1.9% on the back of uncertainty, lack of consumer confidence and people sitting on their cash. So overall good on inflation but a sign of less good things in the EU. As ever, the overall inflation figure had some […]

Debt One of the highest conviction trades throughout the market is selling long dated US debt. Specifically, treasuries with a maturity date of 30+ years are almost universally advised to be avoided or actively shorted by most funds and asset managers. A persuasion against debt as an asset isn’t exactly new. But the nature of […]

EURO ECB President Christine Lagarde delivered a speech last week at Hertie School in Berlin, setting out the ECB ambition of making the EURO a larger/ the largest global reserve currency. At 20% versus USD ‘s 57%, EUR is already the challenger, but unlike CL’s calling for the deficit to be made up simply by […]

Oil Following the US Manhattan court blocking TT or Trump Tariffs deeming them illegal, that was enough for the oil market to outweigh the OPEC+ output increases pencilled in for July, while it remained wary on potential new US sanctions on Russian oil. The result was that oil prices rose yesterday despite POTUS letting it be […]

TACO Despite the movement in MXN yesterday following a downgrade of growth forecasts from the central bank, this briefing does not concern Mexico. Nor for that matter does it concern the Taco as a food item at all. Instead, ‘TACO’ is set to join the hall of fame for Wall Street acronyms. It stands for […]

Dutch Division The 4 way Dutch coalition looks in danger of falling apart over immigration due to Gert Wilders’ party and its brinkmanship over the Netherlands adopting his 10 point hardline immigration plan. Apart from being at odds with EU policy, it is opposed by the rest of the coalition as it involves deporting criminal […]