SGM-FX insights

Weren’t markets waiting for a deal? Yesterday was the first trading session after President Trump announced a peace deal with Iran. Since the start of this war, headlines from of the conflict have dominated headlines and financial analysis. The announcement of a deal allowed risk assets, primarily US equities, to rally strongly. This is non-negligible […]

British Pound Ahead of Thursday’s by election, it is worth looking at Sterling and instead of predicting gloom and doom – initially at least – pose the question as to what would make Sterling appreciate at this time? Economic growth: not apparent given that the UK economy is contracting slightly following a drop in spending […]

USD 30 million With US inflation at 4.2% in May from 1 year earlier, the room for manoeuvre for incoming Federal Reserve Chair Kevin Warsh is looking problematic. Gasoline is up 50%, airline fares 27%, clothing 5%, and electricity 6% from a year ago. The challenge of satisfying POTUS who is expecting interest rate cuts […]

ECB day Today’s interest rate decision from the ECB will be key for the Euro. With major Euro crosses trading at important technical levels, all eyes will be on Lagarde at the press conference that follows today’s decision. The market has been fully pricing a 25-basis point hike from the ECB for some time. It […]

Federal Reserve Today’s US inflation figures will be even more closely watched than usual given that the path of the Federal Reserve’s interest rate policy will in large part depend on how they look. Add into the mix the on-off and hopefully on nature of the Iran-US peace talks which alternatively drives USD down and […]

Traders Vs. Analysts There’s a disjunction between traders’ positioning and analysts’ forecasts emerging within EURUSD. Lets start with the former, over the last couple of months demand and open interest has been building a case for US Dollar exceptionalism within FX investment products. Specifically, within the options space, we’ve seen the price investors are paying […]

US Employment As we wrote on Friday, USD was going into the weekend strong. In fact, it became stronger still on employment data released on Friday afternoon: the expectation from what were known in the 1970’s as chart monkeys, in the 1980’s as teenage scribblers then in the first Bloomberg TV age of the 1990’s […]

USD 30 million That is the level of wealth one must have amassed to qualify for inclusion in the category of what wealth managers and private bankers term as ultra rich. Of the world’s 7 billion people less than 1 million are ultra rich and despite the efforts of the current UK government to relieve […]

The widow-maker  That’s the nickname given to a short Japanese government bond/long JPY trade. It’s been a trade idea that’s gathered pace several times over the past few decades and is built based upon expectations of an inevitable rise in domestic yields from rock-bottom levels. Despite gathering significant coverage amongst the financial press and even […]

UK Population If not the most emotive political topic in the UK today, that of the population size and the UK’s demographics runs cost of living a close second. 200 years ago in 1821, the breakdown of the then United Kingdom was Ireland 6.8 million, Scotland 2.1 million, Wales 800K, and England 10.4 million which […]

3-3 Fear not: the title of this brief does not have anything to do with the weekend’s Champions league penalties. Instead, I’m looking at one of the biggest movers in the G10 space last week: the New Zealand Dollar. When the Reserve Bank met last week, it was expected to keep rates on hold. Ultimately […]

EU capital markets As we have written before, for the EUR to become a global reserve currency requires a number of pre-conditions which largely stem from the establishment of an integrated EU Capital Market. Brussels is accused of dragging its feet if not actually being obstructive so the 6 largest countries have banded together to […]