SGM-FX insights

Russia and Ukraine The decision by Russia to withdraw from the global wheat deal is yet another challenge for global central banks in their fight against inflation: the knock on effect will likely lead to a secondary round of price rises of other commodities. In particular oil and also fertilizer, as Russian as well as […]

Wheat Following Russia’s actions this week to threaten to fire on ships collecting grain from Ukraine plus its bombardment of the port of Odessa, wheat prices have risen 8%. Realistically the only meaningful export route from Ukraine is by sea since the amount that can be transported by train is relatively small due to capacity […]

USD, EUR and GBP With the USD index which measures the currency against a basket of 6 currencies falling 0.15% to 99.753 to a 27 month low at the beginning of the world’s trading day yesterday in Asia, it would look like the USD will remain under selling pressure in the short term as markets […]

USD Carry Trade With the USD currency basket down 13% since last year’s 20 year, it is worth dusting off the impact that the move is having on risk assets including emerging markets and the attractions of the carry trade where investors sell USD and buy higher yielding currencies. For example such a move into […]

USA: Jobless Claims A fall of 12,000 from 249,000 to 237,000 in the weekly jobless claims number yesterday may not have confounded market watchers who are vociferous in their criticism of US successive interest rate rises for the effect on the employment market, but the release does support the contention that the US economy remains […]

CPI and the US Dollar In recent sessions, EURUSD has found what appears to be an increasingly comfortable perch above 1.10. Yesterday, a CPI inflation reading in the USA helped to secure that fortune, at least in the short run. Despite headline inflation year on year only just scraping in below expectations, the reading was […]

Sell everything? Let’s hope not. But a return to the ‘sell everything’ mentality was unmistakably present in markets last week. Traders were blindsided by US jobs data on Thursday, with data recording in at nearly double the consensus estimate. Bond prices across virtually all of the Western hemisphere fell alongside stock indices. Despite being more […]

US Economy More over the weekend about good prospects for H2 in the US economy: talk now of a rolling expansion rather than a rolling recession. Positive house prices, strong labour markets and the resilience of the US economy to absorb the recent succession of interest rate rises have given rise to this latest positivity.EUR/USD […]

US Jobs That’s the thing about the weekly employment numbers: for every few times that they correspond to what the market broadly expects, there is a big surprise. Yesterday was just such an occasion: 220,000 new private sector jobs expected but 497,000 was the actual figure. Conclusion: US interest rate rises are not having much […]

What to expect from the Dollar this week Trading conditions within the greenback, or to you and I the US Dollar, often set the tone for the wider market. In fact, due to the dollarisation of global trade, trading conditions and the outright value of the Dollar often set the tone for markets further afield. […]

Where will further volatility come from? We have once again entered into a period characterised by data-driven market moves. Markets until only recently seemed comfortable with how future dated contracts had been priced. This was true of most assets from FX forwards, volatility indices including the VIX, equities and treasuries. Despite most developed economies having […]

US Equity Markets With the US S&P Index up 13% half way through the year, statisticians have been out over the weekend and have pronounced that there should be further positive news in H2 2023. In the 22 instances that the S&P has managed 10%+ gains in HI since 1950, the median gain for H2 […]