Morning Brief – Friday 22nd

Taking stock at the end of the last full week in February 2019

The U.S. equity market has returned to its previous high over the past 3 months at 25,850 but will have to add a further 1000 points to reach its high of 6 months ago and highest to date. FTSE steady at 7167.

Gold is $5 weaker at $1333.

Oil WTI is still above $56.

Sentiment mixed on the FOMC-Federal Reserve Committee regarding whether U.S. rates should rise further-irrespective of whether they do, it will not be by much. What is clear is that the Fed is agreed that they should reduce their balance sheet ie not replace assets as they run off.

In Brussels there are plenty of rumours but little hard fact so far on whether there is a real prospect of finding a compromise on the Northern Irish border that will be acceptable to both Europe and the UK Parliament. More talk this morning about a 3 month delay. If that is so, it will need to be accompanied by some hard news of progress.

In Europe as referenced earlier in the week the Purchasing Managers Index shows that the slowdown in the region is in fact continuing.

Currency wise GBP remains firm versus USD and EUR and represents especially good value against the ZAR.

“Conventional” 21st Century Warfare

In 2008 a Turkish oil pipeline caught fire; in 2010 Iran’s nuclear power centrifuges broke down and then mostly stopped working; in 2012 the Chevron computer network crashed. Those were all caused by a digital virus named Stuxnet.

Also in 2012 30,000 computers at Saudi oil firms crashed causing disruption in the oil supply. That was caused by a digital virus called Shamoon.

In 2015 computer systems at 3 separate European hotels crashed. Those hotels had hosted delegations from the US, UK, France, Germany, Russia and China to discuss the Iran nuclear programme. That was caused by a third virus named DuQu.

The names of Stuxnet, Shamoon and DuQu may not be as familiar to Westerners as sadly are Semtex, Shoe Bombers and Suicide Bombers, but in years to come they will become much better known. 

We are all aware of daily or even hourly multiple attacks on our computer systems by hackers; those hackers are not necessarily sole agents acting for their own benefit. But whoever they may be, we all need to take increasing care with our digital fingerprints and allowing others access to our digital lives.

So this is less likely to be about: Who? You? than You Too.

Last but not least….

The hazards of working in the world of Foreign Exchange:

Despite being attacked by a spider as he slumbered at home after a hard day in Eastcheap which left him with wounds to his face, SGM-FX loyalist James battled through from the badlands of South London yesterday having persuaded his GP to allow him to come to work to help address the Brexit concerns of our clients.

Before you scoff at these fearsome(?) creatures, there are at least four types of biting British spiders including the Woodlouse Spider, The Lace Weaver Spider, the fearsome sounding Giant House Spider and the Wasp Spider pictured below. Also below is James showing off his (current) best side.

Nice weekend all!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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