SGM-FX insights

Consensus 2021   As we entered 2021 the consensus trade was: weaker USD on the back of President Biden’s trillion dollars of stimulus leading to easy money and a rise in the stock market. Well the last part has been right but at the end of the first quarter, it is clear that the relationship […]

US Federal Reserve   Strong comfort for the markets from the Fed promising to ensure that the US economic recovery is broad and well established before removing its market assistance. USD still firm on the back of this trading at 1.1760 v EUR. Unemployment falling but still 18.9 million drawing benefits hence the Fed focusing […]

More stimulus?!   When you look at the inflation concerns that have been developing in the US economy as a result of Biden’s €1.9tn stimulus package you may have thought it would be madness to start planning yet another round of $3tn worth of stimulus. After all, if people thought that the existing package risked […]

Oil   A sharp 4% fall in oil prices on the back of further restrictions and slow vaccine programs in Europe saw WTI falling below $60 to as low as $58.50. This meant that USD strengthened as further LockDowns were announced in France and Germany exacerbating fears of a further hit to the global economy. […]

Fowl Play – Stuffed Turkey   A dramatic move over the course of the weekend has the Turkish Lira on its knees with the monetary credibility of Turkey back at all time lows. Yesterday’s European trading session saw the Lira priced around 10% weaker versus its closing price on Friday afternoon. Given market positioning around […]

Blue Hydrogen   This is the splitting of gas between hydrogen and CO2 which captures harmful greenhouse gases and therefore mitigates harmful effects on the planet. News that Saudi Armco is working with China as the green agenda assumes increasingly greater priority is interesting. What do the Chinese want in return? The answer is for […]

Decoupling?   Market watchers not only alerted by US 10 year Treasury yield breaking up to 1.74% but also the US-German 10 Year Yield Curve spread breaking through the key 200 Basis Point mark. This points to markets expecting the US economy to not only outpace but accelerate away from the EU economic performance in […]

Powell: and the yield is gone   Improving economic forecasts for global and US growth in particular have been captivating markets in recent weeks as we have spoken extensively about. The main impact has been to drive up the yield on US debt to reflect the increased inflation and growth that lies in store for […]

Question; What will be the biggest benefit to the EU economy in 2021/2022?   Most people will answer that it will be the measures taken by the European Central Bank and their PEPP or Pandemic Emergency Purchase Plan which allows the printing of money thereby injecting liquidity into the European markets. The correct answer is […]

Driver   The slack water as the pull of the pandemic is replaced by the recovery phase is over. With Brexit growing ever smaller in the rear view mirror of FX markets, there are new forces afoot driving foreign exchange flows. The main driver of markets is the asymmetrical bounce back from economic and social […]

Foreign Exchange Reserves   Top of the chart is China followed by Japan and Switzerland, but this week has seen the number 4 position change and now India at $580 billion has nudged ahead of Russia. To put that in perspective it means that India has sufficient cover to pay for 18 months of imports. […]

U.S. Employment   Good news that the number of Americans filing new unemployment claims dropped to a 4 month low last week of 712,000. While this is part of the still colossal 20.1 million US citizens claiming unemployment benefit at the end of February, together with the new reported Covid infections also falling, this paints […]