SGM-FX insights

Volatility Good news and less good news. As we have written recently the Vix or Volatility Index was trading in the high teens before the recent market turmoil on the back of Japan raising interest rates, USA not raising rates and a poor US unemployment number. Then the Vix shot up to 65 before plummeting […]

UK GDP It may not suit the narrative of the UK’s naysayers and doomsters, but Q2 UK GDP showed +0.6%. Apart from being good news for UK plc it almost certainly will dampen the enthusiasm for the Bank of England’s MPC to cut rates again immediately. That in turn strengthens the case for GBP to […]

Yesterday’s news Much of the market had framed yesterday’s US CPI release as the be all and end all. We had seen limited position adjustment moving into the event evidencing just how much of an emphasis investors were putting on the data release. Contrary to the market’s hysteria, to clients we have shared a more […]

Oil Between August 2 and 6 oil traded steadily with Brent at $76.50. That changed just over a week ago with fears of an escalation in the Israel-Gaza conflict and a wider Iran involvement. With a spike up to over $82 the market has seen a rise in the oil risk premium on the grounds […]

Sorry, Newton Every action must have an equal and opposite reaction. Well, it’s a good job then that Newton’s third law referred to an object rather than a financial asset in motion. Otherwise, you might find it rather hard to explain away the effect of labour market data on GBP early on this morning. First, […]

US Election Plenty to think about as we went into the weekend with Trump finally agreeing to a debate with his rival Kamala Harris on September 10th. That news was however quickly overtaken by the announcement that Trump has agreed to an interview with Elon Musk tonight. Given that the weekend polls now show that […]

Toyota For those without a strong disposition look away. Toyota shares fell 35% in the last few weeks between the beginning of July and now, before recovering 13% in the past days. The reasons are twofold: firstly Toyota has been a major beneficiary of the weak Yen and when that abruptly changed the market reacted. […]

Two speed recovery The start of this week brought with it a catastrophic breakdown in risk sentiment. A global spillover was triggered by a disastrous overnight trading session in Asia as local equity markets reacted to the risk adjustment that had taken place during Friday’s European and US trading sessions. Whilst widespread regional weakness played […]

Currency Markets It may be 13 years since he stepped down from the European Central Bank but previous Governor Jean Claude Trichet is still closely listened to by financial markets. So when he spoke yesterday lunchtime and pronounced the recent JPY 10 move in the Japanese Yen versus USD as being a needed and likely […]

Monday Meltdown If you had any faith in a newfound depth and functioning to modern markets, yesterday’s session should have been more than enough to destroy it. As we highlighted early on in the session in our daily brief yesterday, the path of the Fed was in focus over the weekend. More than that, despite […]

USA The question being posed over the weekend is whether the Federal Reserve has left it too late to engineer a soft landing for the US economy by not cutting interest rates last week. July’s unemployment has risen to 4.3% the highest level for 3 years. Having said that GDP has seen growth of an […]

UK Interest Rates Unusually there were almost as many pundits calling for the Bank of England to hold off cutting interest rates yesterday as there were for an immediate reduction. In the event the 25bp cut from 5.25 to 5.00% had initially been discounted by the FX market but that did not prevent a further […]