SGM-FX insights

European Central Bank stimulus   As expected a fresh stimulus package was approved by the ECB yesterday which saw the deposit rate cut to -0.5% and the restart of EUR 20 Billion bond purchases per month starting November and with no announced end date. Analysts are still sifting through the tea leaves of outgoing Governor […]

WeWork: Nice work if you can get it- they can’t as it turns out…   Goldman Sachs had previously advised a pre IPO valuation of $65Billion for the trendy hipster office sharing business. Smaller businesses have been struggling to find office space in all major cities worldwide as WeWork have relentlessly mopped up multi occupancy […]

Volfefe   The President of the United States of America needn’t exercise all of his 280-character quota (including spaces) to upset financial markets. In fact deploying the full arsenal of a tweet might be too crass for the reserved and presidential billionaire. However, his contentious Twitter account “@realDonaldTrump” moves interest rate; currency and equity markets […]

Markets, GBP and Brexit   So much to write about so many different aspects of the political maelstrom in which UK plc is currently being buffeted, but in the end it comes down to just three potential outcomes:  1. NoDeal Exit. 2. Exit with a Deal. 3. No Exit.  Such is the frustration caused by […]

GBP   This week unkind wags have renamed the Great British Pound the Great British Peso in a reference to the gyrations of GBP which are more akin to an emerging market currency than a mainstream one. Those of us with longer memories view the current 1-2 cent moves on the day with less trepidation, […]

Mirror, Mirror on the Wall   Headlines in newspapers and on television screens have been captured by two phenomena in recent weeks. They’ve scrambled to simultaneously grapple with the chaos unfolding within the UK’s exit from the European Union and the protests in Hong Kong. Yesterday, both took a huge leap. The direction of that […]

Is this a test?   2016; 2017; 2019. These three years have now all seen cable (nickname for currency pair GBPUSD) test its post-referendum low. Building a hyper price-sensitive area around the 1.20 mark, the pair has flirted with this low five times in these three years. This time, the direct risks levied against the […]

US-China Trade War   This Sunday 1st September sees the first of two rounds of U.S. tariffs of 15% on $300bn of Chinese goods which will hit a range of food such as meat and cheese as well as clocks and musical instruments. This comes on top of the tariffs on $250bn of goods that […]

Overreaction   Yesterday saw the implied probabilities of a no deal exit from the European Union rise within betting and foreign exchange markets. The source of the threat stemmed from Boris’ approved request to Her Majesty to prorogue Parliament. Translation: make lawmakers come back to work later than planned to prevent legislation legally blocking a […]

In the long run, we’re all dead   The quotation above is from legendary British economist John Maynard Keynes. These thoughts were offered in relation to the phenomena of fixed exchange rates but resonate strongly when considering yesterday’s market movements. US Commerce Secretary, Wilbur Ross, announced yesterday that the Trump administration would delay sanctions on […]

GBP   We have written about the various scenarios for GBP over the next three months several times in the past weeks and it is fair to say that the market continued at least until this week to ascribe a 10% chance of a NoDeal Brexit. That has now changed with 30% ie 3 times […]

Sevennnnn!   Yesterday the exchange rate between the US Dollar and the Chinese Renminbi broke through the 7.0 threshold for the first time since 2008. An initial glance at market action yesterday: Pound down, global equities some 2% off their opening price and defensive havens rallying might seem like overkill as a reaction to the […]