SGM-FX insights

Gravity Defying If you remove yesterday’s price action and look at news flow alone it wouldn’t make for terribly appetising reading. In particular, there was seemingly no progress emanating from Pakistan from second round talks between the US and Iran. Markets may have been sanguine enough to take no news as good news, however, given […]

US Dollar Safe Haven Despite the political, military, and economic upheaval that continues between the USA and Iran, USD remains the safe haven currency of choice although as it declined marginally further for the 7th straight session against the major currencies yesterday, that distinction is beginning to be a bit tarnished. Markets are still hoping […]

A gap lower Markets had been positioned defensively moving into the end of last week. This undoubtedly opened the door to a degree of short-covering moving into the Friday close. In order to sustain such a risk-rally markets certainly would have required more convincing headlines from events taking place over the weekend. Not least amongst […]

Freight Arbitrage The air cargo capacity to the Middle East has shrunk by a whopping 50% on an annualized basis according to WorldACD while air cargo rates from Vietnam to Europe have almost doubled to USD 6.27 per KG according to Flexport. The result is that some products are now being shipped to Los Angeles […]

Hungary Whether it is wishful thinking or informed speculation on the part of the EU, Sunday’s Election in Hungary could see PM Viktor Orban – long time super irritant to Brussels voted out of office after 16 years. With a Debt to GDP ratio of 73% and a budget deficit of more than 5% Hungary […]

Sterling Domestic UK readers will understandably be wondering how Sterling is faring as a stand-alone country currency, beset by recent soaring Jet Fuel, Natural Gas, and of course Oil prices. The answer, at present at least, is that it is holding up well partly on Governor Bailey of the Bank of England’s comments about interest […]

Missing haven At the start of the year, the Franc had performed well as a safehaven. As a result of political and economic developments in Japan, the Yen was not abiding by its usual safehaven form. Therefore, defensive plays within FX only had two credible places to go: the US Dollar or the Swiss Franc. […]

Battle of the banks Market volatility continues amidst unclear messaging from both sides of the conflict in Iran. The President’s position has continued to flit between seemingly concrete positions of absolutely tangible progress and bombing the nation back ‘to the Stone Ages’. Since the start of the war, smarter money has acknowledged that predicting the […]

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 […]