SGM-FX insights

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 […]

Food and Agriculture Organisation   This United Nations Agency reported yesterday that for the 10th consecutive month world food prices have risen in March. So if you have a sense that your weekly supermarket shop is getting dearer, you may well be right. The rises are led by vegetable oil, dairy product and meat prices. […]

Global Growth   With the IMF calling for global economic growth of 6% in 2021, markets are taking heart that this represents the largest increase in the past 50 years. That’s why they ignored the drop of 3.3% in 2020 being the largest fall since the 1950’s. The third IMF stat is perhaps the most […]

Archegos   Much will be written interspersed with plenty of handwringing as to how Archegos Capital could have built up leverage to an extent which at present is unknown but is estimated at USD 50 Billion. An estimate of investment bank losses is (currently) tentatively set at USD 6 Billion. How and why? All investment […]

Consensus 2021   As we entered 2021 the consensus trade was: weaker USD on the back of President Biden’s trillion dollars of stimulus leading to easy money and a rise in the stock market. Well the last part has been right but at the end of the first quarter, it is clear that the relationship […]

US Federal Reserve   Strong comfort for the markets from the Fed promising to ensure that the US economic recovery is broad and well established before removing its market assistance. USD still firm on the back of this trading at 1.1760 v EUR. Unemployment falling but still 18.9 million drawing benefits hence the Fed focusing […]

Oil   A sharp 4% fall in oil prices on the back of further restrictions and slow vaccine programs in Europe saw WTI falling below $60 to as low as $58.50. This meant that USD strengthened as further LockDowns were announced in France and Germany exacerbating fears of a further hit to the global economy. […]

Question; What will be the biggest benefit to the EU economy in 2021/2022?   Most people will answer that it will be the measures taken by the European Central Bank and their PEPP or Pandemic Emergency Purchase Plan which allows the printing of money thereby injecting liquidity into the European markets. The correct answer is […]

Foreign Exchange Reserves   Top of the chart is China followed by Japan and Switzerland, but this week has seen the number 4 position change and now India at $580 billion has nudged ahead of Russia. To put that in perspective it means that India has sufficient cover to pay for 18 months of imports. […]