SGM-FX insights

Data vs Data   Markets had placed their bets on a low volatility summer period and so far at least, across the broader market this has largely been delivered. Key FX pairs have stayed within recent ranges and channels with volatility still realising below or in line with the record low implied volatility that markets […]

German Federal Election   Considering that the Elections are next month on September 26 and represent the changing of a long standing but now old order when Angela Merkel, in power since 2005, stands down, it is surprising that there is not more written about the standing of the various parties and candidates. Let’s let […]

Central Europe   Leading hawks at the Hungarian and Czech central banks are setting the pace which means that with their pre-emptive anti-inflationary measures of rate rise programmes, their currencies respectively the HUF and CZK are likely to be the leading Eastern European currencies in the next few months. In third place comes Poland whose […]

Claridy   Yesterday afternoon saw EURUSD kick into life. Initially, with US Treasuries still continuing to be bought in droves, demand for the US Dollar was weak. The market had a key technical level of 1.19 in its sights and rode towards it throughout the morning session. A weak private employment report (US ADP data) […]

Henan Province, China   As we all know, China has suffered devastating floods which has been worst in Henan Province which is home to major businesses and is a key transport hub. Those floods have disrupted roads and railways which has impacted delivery of raw materials and goods. Now it is clear that those floods […]

Copy and Paste?   The Bank of England’s latest policy decision is due this Thursday afternoon. This will be an opportunity for the central bank to set forth its latest assessment of the economy and announce/forebode any required changes to the monetary backdrop of the UK economy. Economic data has, on the whole, largely continued […]

UK Employment: the Furlough Scheme by numbers   From yesterday the UK Government is reducing its contribution to 60% with employers chipping in 20%( up from 10%) to give those on Furlough 80% of their salaries. However faced with this additional cost and lower sales, 1 in 5 of companies are planning to make workers […]

US Economy   The picture may look a bit fuzzy with US initial jobless claims for the week until July 24 being expected to be 380,000 but coming in at 400,000, but overall the direction of travel is clear: the US Economy grew 6.4% in Q1 and 6.5% in Q2 annualised. Not too shabby even […]

Baby steps   The Federal Reserve Bank offered its latest monetary policy decision yesterday. The announcement from the central bank fell broadly in line with the market’s expectations with Chairman Powell noticing progress in the international economy, but not quite the kind of domestic ‘substantial further progress’ required in order to justify fiddling with the […]

US Dollar   In late May the Dollar Index stood at the year’s low of 90.00 having been up to 93.19 in late April. Now back to 92.80 the US Dollar has benefitted and especially so versus the AUD and the CNY. Net long US Dollar positions are at their highest levels since May 2020 […]

Scale   The Federal Reserve has been in its blackout period ahead of its latest monetary policy decision this week. No doubt many Fed Presidents are itching to head towards the microphone once Powell’s Reserve publishes its latest policy decision. The bond market has been flashing warning signals as we have covered with fair value […]

Stagflation and the USA   In the 1970’s for anyone who can remember, the USA experienced the economic environment called stagflation notable for high unemployment, high inflation and low economic growth. As inflation rises investors sell bonds resulting in lower prices and higher yields which in turn prompts those investors to sell equities as well. […]