Europe: In a period of continued weakness and pervasive uncertainty
Those words are Mario Draghi’s who as Governor of the European Central Bank is well qualified to use them. European interest rates will not rise before 2020 and a cheap funding scheme for banks will be re-launched aimed specifically at Spanish and Italian banks. Apart from the obvious which is that Spanish and Italian banks are most in need of assistance, the reason for this is the degree of exposure to those banks by the rest of the Eurozone’s banks: expect the words Contagion Risk to become a regular feature in the next 6 months. European growth has been forecasted down to 1.6% for 2020 and 1.1% for 2019. Both look optimistic. EUR has weakened considerably as have European stock markets last week.
Weaker US employment data gave markets pause for thought at the end of last week. However the Dow closed only slightly lower at 25,450 and EUR/USD was also unchanged from the previous close. In the UK with further political uncertainty and Conservatives threatening to turn more against each other, GBP continues to slip against both USD and EUR. Gold slipped to $1299. Oil steady at $56. This is a big week for UK plc and markets are alert to each and every piece of news on Brexit developments.
Buckle up!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Missing haven
Charles Porter
Tue 7 Apr 2026
Missing haven At the start of the year, the Franc had performed well as a safehaven. As a result of political and economic developments in Japan, the Yen was not abiding by its usual safehaven form. Therefore, defensive plays within FX only had two credible places to go: the US Dollar or the Swiss Franc. […]
Daily Brief – Battle of the banks
Charles Porter
Thu 2 Apr 2026
Battle of the banks Market volatility continues amidst unclear messaging from both sides of the conflict in Iran. The President’s position has continued to flit between seemingly concrete positions of absolutely tangible progress and bombing the nation back ‘to the Stone Ages’. Since the start of the war, smarter money has acknowledged that predicting the […]
Daily Brief – Questioning Truth
Charles Porter
Tue 24 Mar 2026
Questioning Truth Adopting the same handle as his now rather redundant X account, @realDonaldTrump shocked markets yesterday using his own social media platform, Truth Social. During Trump 1.0, the legitimacy of a President using an unofficial X, then Twitter, account was questioned. Now under Trump 2.0, it’s seldom questioned when he is the majority shareholder […]
