SGM-FX insights

Dollarisation A chart in this week’s Economist was both not surprising and at the same time quite remarkable. The not so surprising part was that it showed that USD share of all international payments has risen steadily over the past 12 years since 2012, from 30% to just under 50%. Equally expected is that GBP […]

CPI fades to ECB The trading week ahead will most likely be defined by the balance between tomorrow’s US CPI release and Thursday’s ECB decision. Both are likely to contribute to setting the tone for any final year-end positioning and influence the path of respective central bank policies for the year ahead. First, a glance […]

UK Housing Market Best performance in the past two years etc etc with the Halifax average house price up 4.8% as at the end of November. Without being curmudgeonly or seasonally Scroogelike the real house price performance allowing for inflation in the last 2 years is minus 10.5% for all those mistakenly regarding their house […]

UK Equities We wrote recently about a European wide Santa Rally in Equities despite the political headwinds in Continental Europe, but it looks as if the UK market has finally managed to break out on the top side of its range and without wishing to jinx it, may be set fair. One well known Fund […]

One government builds, another falls SGM-FX has covered the run up to the vote of no confidence in Barnier’s infantile French government somewhat comprehensively. Despite this it still feels necessary to highlight that last night this vote concluded and Barnier’s government has collapsed. The Prime Minister is due to submit his resignation to the President […]

BRICS In case you missed it, and I very nearly did due to the sheer amount of soon to be again President Trump’s social media output, he was vociferous in his opposition to a BRICS inspired alternative currency to USD. While we have been following the long running Brazil, Russia, China, India and South Africa […]

The EUR/USD chasm One key US stock index, the S&P 500, recorded its 54th closing record for 2024 yesterday. Such equity performances are indicative of the fact that US sentiment and fundamentals continue to widen the transatlantic divide. Within the Eurozone, bond yields between member states continue to be volatile as spreads rise, with investors […]

Iceland Over the weekend the 390,000 people of Iceland who number almost the same as the most populous London Borough of Croydon have cast their votes in a snap election that will likely unseat the current coalition and replace it with another one composed of Social Democrats and the Liberal Reform party. Cost of living […]

86 This is the number of Basis Points between French and German Government Bond Yields and represents the highest level since 2012 which was the last time of a major EU crisis- which that time was Greece which had fallen from grace with the markets. Apart from this wide spread it is instructive as to […]

Reversion A defining feature of 2024’s FX market has been the inversion of many Dollar-termed forward curves. Despite the rising cost of holding US Dollars against the base of such currency pairs, the Dollar has remained relatively well bid. However, for those currencies that have emerged with a positive carry versus the US Dollar, FX […]

Globalisation As each week passes and returning President Trump’s January inauguration draws closer, he is if anything stepping up his rhetoric on the introduction of tariffs immediately after his return to office. China has responded in a measured way saying that they will maintain the value of the CNY rather than devaluing competitively as well […]

Where is the logic? The question posed by this daily brief may sound like a Black Eyed Peas song had they been woefully unsuccessful. But based on yesterday’s trading patterns is a wholly deserved question. The key data highlight released during yesterday’s European session was the German Ifo survey. As one of the leading indicators […]