SGM-FX insights

Gallic Puff of Wind?   That is the question facing Madame Christine Lagarde of the ECB ahead of the meeting tomorrow: is French inflation annualised to December which was released yesterday of 3.3% a passing puff of wind or more of a stiff French breeze? On the back of recently released German inflation which reflects that […]

EURUSD   The market delivered relatively severe position adjustment in January that weakened the Dollar versus the Euro by around 2%. Position adjustment allowed the more defensive, long USD, positioning built up into year-end to be unwound. Data showing FX market positioning now available up to 25th January showed that aggregate dollar positioning shifted to […]

New Italian President   Yesterday Italy reinstated the present incumbent, Sergio Mattarella the 80 year old who said he had had enough and did not want to serve a second term which will take him to the age of 87. Never mind his objections, this result has been hailed a success and an outcome that […]

Markets   With WTI Oil at $88 and 10 Year US Treasury Bond yields at 1.83%, rates worldwide have moved in lockstep with 10 Year German Bunds now at -0.03% and 10 Year Gilts at 1.25%. Not surprisingly USD has hardened and GBP/USD is now at 1.3365 and EUR/USD 1.1140.   The Milky Way   […]

Eureka…   An overnight move in the US Dollar of one cent shows the market was caught at least partially off-guard by the Federal Reserve last night. Despite USD buying in the week approaching last night’s Fed decision, the market still had room to build long-USD positions as demonstrated by the latest CFTC data. The […]

Markets   A stronger USD across the board and EUR/USD 1.1290 as the market awaits the Federal Reserve meeting later today. 10 Year US Treasury Bond yielding 1.75% and 10 Year German Bunds at -0.9%. WTI oil at $83.52. GBP/USD at 1.3494.   Oil and Gas Strike   While its northern neighbour Angola is an […]

High Beta could turn High Volatility   With some US indices approaching correction territory amidst rising monetary and geopolitical uncertainty, it is unsurprising that markets are starting to question the valuation of many high-beta currencies. Taking a look, for example, at AUD and NZD currency crosses will reveal trading ranges that have exceeded four cents […]

Silvio Berlusconi   In case you missed it, the bad boy of Italian politics has decided not to run for the post of President of Italy; whether it is due to his age(85) and the toll that his new(est) wife(32) is taking on him, or simply that he has concluded that he does not need […]

UK: Mind the Gap   This refers to the gap between UK productivity and G7 productivity where the UK languishes at 13% below that of the average of the G7. While an improvement from the previous 16% deficit, the fact remains that the UK has an ongoing productivity problem. A study by the London school […]

Good news! Until it’s not.   It was positive to see the employment data released this week. Perhaps of most importance was the unemployment rate, observed in the three-months to November at 4.1% versus an expected 4.2%. Despite only realising a whisker better than forecasted, the data paints a picture of the UK labour market, […]

Eurozone Household Energy Bills   Soaring European gas price rises are being passed on to consumers by the utility companies faced with the alternative of going bust. Examples of monthly rates trebling are rife for example in Cologne, Germany. The average annual Eurozone domestic energy bill for 2020 was EUR 1,200 but that is forecast […]

Odd one out?   At a time when the rest of the global economy is looking to reduce record monetary stimulus, there is one key economic power that stands at odds: China. Yesterday, amidst a much-awaited economic data release, the People’s Bank of China chose to cut interest rates by 10 basis points. In the […]