SGM-FX insights

Dire Straits A handy ready reckoner for the major straits of the world that see 70% of the global oil trade pass through them: Malacca, Bass, Singapore, Gibraltar, Magellan, Hormuz, Bering, and Bosphorus. It may not add much knowledge to those who have a good grasp of economic geography but it does serve to remind one following the […]

Evens That is the bookies’ betting on PM Starmer being gone by the end of June following the UK Council Elections, which were even worse than had been expected for the Government. Whether that does indeed happen, equity prices are set for greater volatility, gilt yields, and therefore interest rates will likely remain at their […]

UK Local Elections As you read this, the polls will be giving strong indications and pundits will have made themselves hoarse in parsing the results of what has been billed as a seismic set of local elections. With polling closing at 2200hrs last night, while some results are coming in first thing today, most will […]

British Pound Buffeted but at present largely unaffected by the political turbulence building in advance of Thursday’s UK local elections, increased tensions in the Middle East and its fragile economic position, Sterling is remarkably unmoved. The explanation lies in the shift in expectations for UK interest rates from cuts to increases which has buttressed the […]

Brent Oil With oil breaking USD 126 yesterday morning on the back of failed arrangements for peace talks and the likelihood of a resumption of US-Iranian hostilities, the news that the UAE are withdrawing from both OPEC and OPEC+ citing the protection of their own interests might have been expected in more normal times to […]

German Gold With 3350 tonnes in the vaults and the 2nd largest gold reserve in the world after the USA, Germany has EUR 440 billion worth of moolah tied up in that asset class. Some people both inside and outside Germany are saying it might be time to spend some of it. The Bundesbank is naturally […]

European Central Bank Tonight in Berlin, President Lagarde of the ECB will make a speech to the Association of German Banks at their 75th Anniversary meeting. This will be a well-attended and closely followed address since Thursday this week is the ECB meeting, and the Council is confronting much higher inflation and a markedly slowing economy. […]

US Dollar The Maurits C. Boas Professor at Harvard University who is better known as the former IMF economist Ken Rogoff has broken cover about the USD: he is predicting that the Chinese Yuan will be a Reserve Currency within 5 years and the USD will decline between 15-20%, which would take EUR/USD to 1.40 predicated […]

Jet Fuel Europe obtains 75% of its jet fuel from the Middle East and since March 1st the price per tonne has risen from USD 831 to USD 1560. Jet fuel accounts for 40% of airline operating costs but the continuing crisis in the Gulf is much more than being simply about higher costs and […]

British Pound In days long passed, a Friday was a good day for under siege politicians to deal with unfavourable news about themselves. Markets began quietening down at lunchtime and by 5pm participants were easing into their weekends or in the pub without the benefit (or otherwise) of mobile phones, social media, and non-stop news […]

Gold Last year’s tremendous run up on Gold was largely fuelled by Central Bank purchases. The reasons may vary as to why Central Banks buy Gold at any one-time e.g. defensive hedging, rebalancing of asset allocations, or the acquisition of an appreciating asset, but the main rationale for them holding it is to be able to deploy […]

US Dollar Safe Haven Despite the political, military, and economic upheaval that continues between the USA and Iran, USD remains the safe haven currency of choice although as it declined marginally further for the 7th straight session against the major currencies yesterday, that distinction is beginning to be a bit tarnished. Markets are still hoping […]