SGM-FX insights

Biden Time   The US administration has been scrambling to back track or at least qualify comments made by the president of the United States, Joe Biden, regarding his Russian counterparty. To remind you of the words said by the US President what with the turmoil of Will Smith’s face slap turning heads, he said, […]

Default by Default?   I’m advised that before the modern English word default existed in its present form, it held derivations of a Latin word ‘fallere’ meaning to disappoint or deceive in the contexts of modern English (anachronism aside). Hijacked sometime later by the French, the Latin word picked up a quintessential ‘de’ and several […]

End of the beginning?   Markets took a decisive turn yesterday unwinding much of the highly defensive positioning that has characterised many recent trading sessions. The move to adjust to a less doomsday mindset in markets was likely catalysed by the West’s latest round of sanctions. Over the weekend and into trade on Monday, speculation […]

I need a Dollar     Late last week markets reversed some of the defensive pricing they had pushed for in the face of the initial Russian invasion of Ukraine. The reason for the relief rally last week was that the measures taken by the West fell short of market expectations. Calls for Russia to […]

Off-Kilter   Risk sentiment in markets continued to fluctuate yesterday. Coinciding with a non-US trading day, liquidity was relatively thin with lighter volumes in markets frequently obscuring decisive market movements from the noise. Entering the European open yesterday morning, the market was positive with a stronger risk appetite compared with Friday’s close. This saw the […]

Similar metric, different data   As we discussed last week, the non-farm payroll data released on Friday 4th Feb would be of critical importance to the value of the US Dollar. It would be the next major data point on the road ahead of the Federal Reserve Decision next month that will contribute to the Open […]

EURUSD   The market delivered relatively severe position adjustment in January that weakened the Dollar versus the Euro by around 2%. Position adjustment allowed the more defensive, long USD, positioning built up into year-end to be unwound. Data showing FX market positioning now available up to 25th January showed that aggregate dollar positioning shifted to […]

The Ultimate Cop Out?   You’ve probably seen it a number of times in financial commentaries (but not of course, in our communications!) usage of the phrase: ‘It’s already priced in’. This can unequivocally be labelled as the ultimate cop out for misdiagnosing or simulating the outcome of an event upon a financial product. For […]

USDJPY   The value of the US Dollar rose sharply against the Japanese Yen in 2021. The broad and sustained rally saw the Japanese Yen lose approximately 12% versus the greenback last year. The sell off was significant enough to not only reverse the gains made in 2020, but to push USDJPY to five-year highs. […]

Thanks, but no thanks!   Moving into last night’s Federal Reserve decision, markets were expecting to see rates unchanged but were closely looking at where the board thought interest rates would be in the year(s) to come. Market expectations had rather neatly convened around 2 whole rate hikes in 2022 with similar expectations for 2023. […]

No Brain-ard?   Having previously looked shoo-in to spend another term as chair of the Federal Reserve, the bookies had been losing faith in Jay Powell and his ability to achieve re-nomination from President Biden. The President who is responsible for appointing the head of the monetary authority faced a challenging decision. Either continue with […]

A little can be a lot!   The big upside surprise to US inflation last week affected US currency, fixed income, and equity valuations. The market disturbance created by rising price pressures in the real economy was widespread and significant. In addition to the displacement in financial markets already, there is a high probability of […]