SGM-FX insights

Stop Press Hugely positive economic news for UK plc this morning with the announcement that UK Chancellor Rachel Reeves has been seconded to the European Central Bank for a minimum of 3 years which will extend beyond the term of the current Government. This is all part of the imaginative Competence in Government (UK) Job […]

No rush The President’s claims of an imminent end to the war are being undermined by Iran’s refutation that such talks have occurred. Trump in turn has continued to extend and extend a deadline for Iran to come to the negotiating table only to be scorned by news outlets in Iran, presumed to speak on […]

Iran War Outcomes A useful UBS report was published at the end of last week which sets out 3 separate outcomes for the Iran War with attendant implications: the first is a de-escalation in 1 week: prices would revert in the short term and growth prospects would be relatively small. The second is a 5-week […]

Shipping Insurance According to the Lloyds List, typical rates prior to the war for the Straits of Hormuz for a 1 week policy were 0.15% to 0.25% of hull value. Those insurance rates have rocketed to 5% to 10% of hull value for a 1 week policy. While insurance is still available, more of a challenge is to […]

Sticky forecasts? One theme from the early days of this conflict in the Middle East was complacent pricing. Markets still saw the knee-jerk reaction of a flight to safety and a rotation away from risk, but it was on a small scale. Markets didn’t crash per se, they slumped. Even energy markets, which have arguably […]

Oil Trading 15 minutes before POTUS making his social media announcement on Monday that a 5-day moratorium would be put in place on the USA attacking Iran’s key energy infrastructure, crude oil was pre-market trading at 0649 hrs with a volume of 733 contracts at USD 100.72. One minute later, the trade volume spiked up […]

Questioning Truth Adopting the same handle as his now rather redundant X account, @realDonaldTrump shocked markets yesterday using his own social media platform, Truth Social. During Trump 1.0, the legitimacy of a President using an unofficial X, then Twitter, account was questioned. Now under Trump 2.0, it’s seldom questioned when he is the majority shareholder […]

Robotaxis  Uber announced at the end of last week that it is buying 50,000 Rivian R2 robotaxis which will be rolled out initially in San Francisco and Miami in 2028 and then in Europe by 2031. The fully autonomous vehicles will cost Uber USD1.25 billion. EUR/USD 1.1543. People’s Bank of China Governor Pan Gongsheng gave […]

Economics 101 On Tuesday evening earlier this week in a well signposted speech – no surprises on this occasion-UK Chancellor Reeves delivered the annual banking and business Mais lecture at the Bayes Business School part of City, University of London. We say well signposted since Chancellor Reeves has been espousing closer ties with the EU […]

On course for Warsh? The latest Federal Reserve decision concluded last night. Mirroring the prior decision, the FOMC voted to keep policy rates on hold within a band of 3.5-3.75%. Ordinarily, yesterday’s meeting could have been a lesser-event. After all, with the arrival of Chair Jay Powell’s successor on May 15th, this could have been […]

Central Bank Meetings In normal times Central Bank policy committees study their dashboards of indicators such as Inflation, Interest Rates, Employment, Economic Growth, Commodity Prices and a broad set of Confidence measures. So this week when the world’s Central Bankers meet, they will be confronted by both the immediate-a set of flashing red indicators on […]

The only way is $ The Dollar has served as the first-choice safe haven currency during this latest bout of geopolitical risk. Safe havens need to exhibit lower levels of volatility during times of elevated risk and, on balance, exhibit a negative price correlation with perceived risk. As geopolitical risk was on the rise over […]