SGM-FX insights

Japan While this week’s focus has been on the AI bubble as typified by Nvidia shares and the concerns raised by legendary investor Peter Thiel having sold all his Nvidia shares, the USD has been strengthening further against JPY prompting expectations of Bank of Japan intervention to halt the slide in JPY. When it last […]

Back in business? Tomorrow will mark one week since the President’s signature was provided to end the longest US government shutdown in history. It is not uncommon for the legacy of a shutdown to drag on beyond its formal conclusion date because it can naturally take differing amounts of time for different departments to get […]

British Pound News that Chancellor Reeves had abandoned her controversial and politically charged plans to raise UK Income Tax on Friday morning sent the British Pound lower by lunchtime, however, Sterling recovered from most of that fall later on Friday. The reason given for the change of tack on Income Tax rises was that economic […]

Gold and Oil Following the longest US Government shut down ever, the market view is that following the re-opening of the US Government, the data reporting that has been absent will resume and that data will strengthen expectations of a cut in US interest rates. That resulted in the USD selling off and US Yields […]

Volatility on offer As we approach year end, traded ranges have remained relatively narrow despite significant macroeconomic themes developing. Looking ahead beyond year end, we note the options market continues to severely underprice volatility versus historical standards. Within such an environment, broader risk appetite remains constructive. As a result, the carry trade has continued its […]

UK Unemployment by Numbers Work and Pensions Minister Pat Mcfadden defined the art of politics when he announced that 329,000 people “had moved into work” this year and that this was part of the plan to “get Britain working”. The Office of National statistics saw things a bit differently. While not disputing the Minister’s claim, since more […]

Just in time? As we wrote yesterday, the latest US government shut down has become the longest in history. The impact upon sentiment and consumption is sure to have been significant but it is too early to identify from the data just how much damage was done. Thanks to the eight democrats who have broken […]

USD and US Assets Surely one and the same, so if you own assets you are by definition long USD? Not necessarily. It’s looking like that foreigners are still storing their wealth or buying assets denominated in USD. So cash, bonds or equities primarily. However, this year as we know USD has depreciated by 13%. […]

The EU EV Charging Paradox As a reminder, the EU has decreed that there will be no more internal combustion engine powered cars after 2035. This is a further example of eco policy losing touch with commercial reality as there are currently 1 million charging points across the EU or just 1 point for 13 […]

Grinding lower The key currency pairs of GBPUSD and EURUSD continue their slow but consistent grind lower. This story is not just one of dollar strength but also a rotation away from GBP and EUR, in favour of safe havens. Under performance in global equity markets continues to be a factor behind the market’s general […]

Chancellor Reeves Market observers were no better informed at the end of the Rachel Reeves speech than they were at the outset yesterday morning. The only surprise was that having comprehensively floated options in the past two months for inclusion in her November 26 Autumn Statement, that the Chancellor should have elected to speak at […]

One in three Until recently, the market had held the probability of a rate cut at the Bank of England’s November meeting at near zero. Above-target inflation and insufficient evidence of faltering economic growth alone suggested the BoE would continue to adopt a wait and see approach. Combine that with the uncertainty of the UK […]