SGM-FX insights

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. […]

U.S. Employment   Good news that the number of Americans filing new unemployment claims dropped to a 4 month low last week of 712,000. While this is part of the still colossal 20.1 million US citizens claiming unemployment benefit at the end of February, together with the new reported Covid infections also falling, this paints […]

Gold versus Silver   Silver stood at $27 on January 3 2021 and is now $27 ie unchanged. Gold on the other hand was $1,941 on January 3 2021 and is now $1,726 down 11%. In these days of pundits recommending buying gold as a hedge or more racily, buying bitcoin as a surrogate for […]

St David’s Day   A very happy St David’s Day to all of our Welsh readers. Canonised in 1120AD by Pope Callactus ll, St David died this day in 589AD. St David’s Day is marked by wearing either a daffodil or a leek (or both) and eating Welsh rarebit or cawl which is a broth […]

US Dollar   Despite showing a gain to above JPY 106, USD was at a 3 year low yesterday as the commodity currencies such as the AUD and CAD benefited, as did the EUR posting $1.2230. Copper traded at $9,500 a ton its highest in 10 years and 10 year USTreasuries yielded 1.46%.   Asian […]

14 Days   Bond yields and commodities continue to climb higher at a rapid pace. Commodity indices have now surpassed pre-pandemic levels amidst expectations of inflation around the corner. Commodities in particular are benefitting from analysts’ predictions that the restoration of pre-pandemic demand will outpace supply normalisation in the short-run. The ECB President moved yesterday […]

Inflation   A survey recently undertaken in the USA found that both market professionals and also retail investors when polled, by a significant majority responded that they were not concerned about inflation. Without wishing to rain on that particular parade, we should all remember that only approximately half of the population have any experience of […]

US Employment   Keenly watched as a barometer of not only the US but also the global economy, initial claims for unemployment benefits was higher than expected this week and compounded by a revision upwards by 55,000 in the claims for the preceding week meant that the market did not like it with USD weakening […]