SGM-FX insights

German bottom?   Germany narrowly avoided recession thanks to data last week that showed third quarter growth at 0.1%. Congratulations are in order then; the driver of Eurozone growth and manufacturing export champion is back up and running! Hold on, perhaps we should wait a moment before putting the Riesling on ice.    If you […]

Bank of England   The Monetary Policy Committee voted in favour of leaving rates on hold at 0.75% yesterday. Nothing surprising in that, but what was unexpected were the two votes in favour of cutting rates by 0.25% to reflect the lack of growth expectations globally. Combined with the impact of the ongoing Brexit uncertainty […]

Gale force 12   Phraseology meets foreign exchange part two – ‘any port in a storm’. This time I’m on side, I would indeed rather be in any port in a storm than, as the phrase assumes, out at sea staring down a Beaufort scale-rattling wind. But, once again, it’s got limitations largely created by […]

Thrown under the bus   Do you remember when Boris Johnson told the world that he likes to build models of busses in his spare time? The ‘confession’ offered during the televised interview with talkRADIO was, the daily mail conjectured, a PR spin to draw attention away from the referendum red bus that brandished the […]

Borderline   The best way to solve a problem in politics, almost without exception, is to present the simplest form of the idea possible to maximise the expectation of success that each voter carries. What’s not a particularly grand idea in most scenarios, and certainly not when attempting to do something quickly, is to redefine […]

China and Hong Kong: enigma   The incredibly successful statistics from China throw out a big question of which more below. Between 1952 and 2018 GDP averaged 8.1%. Life expectancy has risen from 35 in 1949 to 77 today. 770M people have been taken out of poverty since 1978. More than $2 trillion has entered […]

Largest Risk Facing Global Economy   This is the lack of policy instruments at the disposal of central banks in the event of a financial crisis: with interest rates on historic lows and the ability to provide any fiscal stimulus heavily curtailed, the options available are limited. Nothing obvious in the way of a solution […]

Gladiators, are you ready?   I’m sure BBC Parliament has never had quite so many viewers as it enjoyed yesterday. Markets were fixated as usual with the political developments of the day in their pursuit to value domestic equity, currency and fixed income assets, but this time the population also turned to the Commons. Johnson, […]

NoDeal Brexit: What the bookies say: And Over the Rainbow   After yesterday’s court ruling and with 37 days left to the current deadline: 40% probability of NoDeal. And that is despite the Benn Amendment that prevents the U.K. leaving with NoDeal(!) Meanwhile the cliff edge uncertainty has sent UK factory output expectations to a […]

Sagging   Of the $6.6tn daily foreign exchange market, trading across the two leviathans, EUR and USD, takes the lion’s share. In normal times then, the sheer weight of demand and supply behind both of these two major currencies makes the EURUSD pair relatively flat. However, when presented with a big enough reason, the value […]

China: The Growth Story   Bizarre really that market analysts are wringing their collective hands because China’s growth for this quarter may dip below 6% after 6.2% in the last reported March to June period. In Europe’s anaemic world, we can only dream about such a figure. Needless to say the headlines will all reflect […]

Windfall or the Economics of the Madhouse   To most of us including the Cambridge English Dictionary a windfall is an amount of money that you win or receive unexpectedly. The managers of Eurozone economics view a windfall as being money that they have saved due to lower global interest rates. Now this may seem […]