SGM-FX insights

Long March 5B Yao 2   In case it passed you by, over the weekend the USA and China were in a spat over China’s irresponsible action in launching a large rocket into space without considering where the block of metal might fall upon re-entry into the Earth’s atmosphere. It could crash pretty much anywhere […]

Inflation Nutters (both sides of the pond)   This was the term which ex Bank of England Governor Mervyn King gave to those who fretted and vocalized their conviction concern that inflation was lurking behind every economic rock when Governor now Lord King was in office between 2003 and 2013. In fact he was of […]

U.S. Trade Deficit   March data reflects a record high of $74.4 billion fuelled by rapacious domestic demand which is increasing imports. Despite this and a mini flash crash which saw 0.5% wiped off equity values late morning in Europe yesterday due to reports of a Chinese fighter entering Taiwanese airspace, USD a little stronger […]

The global Dollar   Before US inflation data put a cap on US yields and sent the Dollar packing from its recent highs, US outperformance was the main story in FX markets. An unwavering federal reserve in the face of economic growth and an elevated yet palatable rate of inflation allowed the strong Dollar thesis […]

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 […]

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 […]

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 […]

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 […]

Retirement and the 4% Rule   Look away now unless you have a strong constitution! Conventional wisdom was that all one needed to do to ensure a stress free and funded retirement was create a pension split 60%/40% Equities to Bonds and in the first year of retirement draw a max of 4% of the […]