SGM-FX insights

Metamorphosis   As we forecasted on Thursday, the ECB’s press conference has driven EURUSD to retest recent lows with the pair even breaking through two-year lows to set fresh records during the afternoon European session. In an impressive show of metamorphosis, the President managed to change from dove to hawk, dove to hawk and back […]

Oh, and another thing…   As if Europe did not have enough on its plate already as the world watches for developments on the Ukrainian border, the European Court of Justice is also in focus. Officially named the CJEU, the European level court serves to act as the ultimate authority on European law and provides […]

Mamma Mia   As we wrote yesterday, the inflation data in the Eurozone being released throughout the week could adjust the pressure the ECB faces today when it delivers its latest monetary policy decision. Yesterday inflation data for Italy was published showing inflation at a 26-year high at 4.8% year on year. The European sovereign […]

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 […]

European Markets   European stocks were on song yesterday and enjoyed positive momentum with airline and travel stocks leading the way on hopes of omicron being less damaging than previously expected.   Blackberry   Once the must have style icon for aspiring business and finance workers, the Blackberry has been effectively switched off as of […]

Emperor’s new clothes   In the Euro area, inflation is running close to 5%. With the spread of Covid and it’s many variants of concern, largely dominated by Omicron at present, visible in close neighbours including the UK and Denmark, the EA is braced for comparable health concerns to hit its borders. The ECB is […]

Twenty Years of Strength   When the Euro came into physical existence in 2002, one Euro would have bought you a little under 1.5 Francs. That was already ten cents less than what a Euro-in-principle would have purchased you in 1999 when the Euro was conceived electronically but still limited to financial markets and select […]

The Paradox of Intervention   The US Dollar is on the rise. Of the 22 EURUSD trading sessions in September, 15 saw the US Dollar gain ground on the Euro. Overall, last month, the aggregate price move was approximately 2% in the favour of the greenback versus the Euro. In itself, the changing valuation of […]

US Federal Reserve   “Substantial further progress” may sound like an end of term report card for a struggling pupil but that was as far as Fed Chairman Powell went with his prognosis for the US economy but restricted that view to the economy only meeting the criteria for inflation but not for labour. That […]

Data vs Data   Markets had placed their bets on a low volatility summer period and so far at least, across the broader market this has largely been delivered. Key FX pairs have stayed within recent ranges and channels with volatility still realising below or in line with the record low implied volatility that markets […]

Euro Interest Rates and the ECB   Interest rates lower for longer to boost inflation and fears expressed about the impact of Covid on the Eurozone economy: no change there. Amid all the usual dry ECB delivery is the deathless phrase where the ECB commits to deliver “a persistently accommodative monetary policy” which President Lagarde […]

ECB: From Nothing to (Maybe) Something   For most of this year, you could have bet that the July ECB meeting would not be anything to either get excited about nor a meeting to expect any currency-moving impacts from. In fact, markets put their money where the mouth was, pricing volatility at extraordinarily low levels […]