SGM-FX insights

Australia   As we all know Australia has form with attracting foreigners in exchange for subsidised passage and a low cost of entry. In 1945 it was the so called Ten Pound Poms as British people who were given passage and the right to settle in exchange for GBP10 were known. An unforeseen consequence of […]

Japan   With the Japanese economy contracting in Q1 by an annualised 5.1%, the worry is that Japan is slipping back into recession defined as 2 straight quarters of negative growth given the lack of economic activity in Q2 on the back of the reduction in spending, slow vaccine rollout and a surprise reduction in […]

Germany September 2021 federal election   Young, moderate, photogenic and Green, Annalene Baerbock has a real shot at succeeding Angela Merkel. With support for the Greens running at an unprecedented 28%, life could well be about to change for Germany as agendas gravitate towards sustainability. It is Germany’s neighbours to the East that are watching […]

Scotland and Independence   A number of readers have asked for a precis of what Scotland leaving the UK would mean in headlines for Scotland. Taking out the rhetoric, these are the answers: Fiscal Deficit- due to peak at 25% of Scottish GDP and then reduce in the next 4 years to 9%, an immediate […]

Central Bank Policies   When a billion Pounds’/Dollars’ worth of stimulus becomes a drop in the ocean it is easy to begin to take the role of central bank policies for granted in recovering from an economic crisis. In fact, in the realm of economics and monetary studies there’s very mixed wisdom on the role […]

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 […]