SGM-FX insights

US Federal Reserve   Confirmation of continuing easy money conditions from the Fed: bond buying will continue until the twin goals of full(er) employment and inflation at 2% have been achieved. Jay Powell underlined that by saying that while March employment stats were very good, the Fed will not jeopardise progress made by shutting off […]

Cheese   Before I get to the astronomical rally in cheese futures that I know you have been eagerly awaiting, let’s take a look at what the Federal Reserve said last night in one of its most defining monetary policy meetings in a decade. As we discussed recently, the market knows that global central banks […]

Corporate USA   Yesterday POTUS, Joe Biden announced an increase in the minimum hourly wage for federal contractors from $10.95 to $15, an increase of almost 37%. Corporate USA is under no illusions that this will feed through to the bottom lines of non federal corporations. The categories of federal workers that this will apply […]

ZAR FWD   The Rand had gained in excess of 25% versus the US Dollar since the peak of the asset sell off during the early stages of the pandemic. Sure, you could argue that the notable part about that statistic is the extent of the sell-off during the fire sale of risk assets in […]

Italy   As of last week, Italy’s multi party cabinet were at odds and unable to agree on the terms of the funding from the EU. Then on Saturday PM Mario Draghi, no stranger to last minute brinkmanship, made a call to Ursula von der Leyen and hey presto: EUR 220 Billion(USD 266 Billion) agreed […]

US Employment   Markets welcomed the lowest set of jobless claims figures since March 2020. New job creation plus fewer redundancies means that figures are moving well in the right direction. While there are still 17.4 million unemployed in the USA, there is little doubt that the employment market is showing that there is a […]

Tightrope   The three phase pandemic from an FX and rates perspective goes as follows: Tantrum, Blinkers and Tapering. The blinkers are still on the international market and still subduing volatility in the foreign exchange market, but yesterday we got a real taste of what tapering looks like and therefore what is in store for […]

UK Inflation   10 distinguished economists headed by Prof Tim Congdon have written a both strong and timely letter that was published in yesterday’s Financial Times. What they are warning is that due to the Bank of England’s GBP 150 Billion Nov 2020 asset purchase program, the UK is set for above 2% target inflation […]

Take off   April is usually a strong month for GBP. Due to the UK tax year’s end at the beginning of April, large corporations domiciled in the UK bolster demand for the UK Pound when repatriating overseas profits. This real money flow tends to provide a significant and tangible bid in GBP that sees […]

Compromise and Consensus   Those of us who have worked in Germany are familiar with these concepts or konzepts embedded solidly in post WW2 business culture (geschaftskultur). This weekend the CDU/CSU parties were hoping that there would be the first leading to the second in order for them to arrive with an agreed successor to […]

US Retail Sales   All those $1400 pandemic cheques for each and every US citizen may not have been fully spent but retail sales increased by 9.8% in March after a fall of 2.7% in February. Stripping out autos, gasoline, building materials and food services, retail sales still increased by 6.9% in March. While employment […]

This statement is false?   If you like a paradox you might be no stranger to unravelling self-contradictory statements like ‘this statement is false’ or ‘I am lying’, or perhaps puzzled over Achilles’ tortoise. But there’s an apparent paradox unravelling in the foreign exchange market this week. Following the release of the latest CFTC data […]