SGM-FX insights

Aussie Coal   The AUD was hit yesterday after China instructed state owned utilities and steel mills in China that they should stop importing Australian thermal and coking coal immediately. The AUD fell 0.5% on the news but later recovered a bit after the market worked out that it is not simple to substitute other […]

Short Biden   Today marks three weeks until the US Presidential election. Democratic Presidential Candidate Joe Biden leads rival and incumbent Donald Trump by some 10 percentage points. Some weeks ago, despite a lead in the polls, betting markets were more stubborn to revise the probability of a Biden win upwards. The presupposition of a […]

Apart from being National Farmers Day globally, today is a public holiday in the USA to celebrate Columbus Day and the discovery of what in 1492 was the New World….   Cyprus and the EU   Later this week the EU meets to discuss an agenda that includes the imposition of sanctions against Belarus for […]

US Employment   Slow progress in the USA in getting people back to work. Last week 840,000 filed for unemployment benefit versus 849,000 the previous week and 665,000 per week during the 2008/9 economic collapse. While drawing encouragement from this apparent plateauing/small fall in the 2020 numbers, markets are under no illusions that without a […]

sPain   Distress in the Eurozone is normally reflected in financial markets by rising spreads between peripheral (read: Italian) and core (read: German) assets. The so-called ‘BTP spread’ measures the cost of borrowing money in Italy versus in Germany and is one of the key barometers of European financial stress and risk. In fact this […]

US Dollar   Longer term and by that I mean in the 6 to 12 month time horizon it is looking increasingly likely that USD will weaken substantially due to two key factors: firstly, domestic savings are falling faster and the savings ratio is lower than at any time in the past 70 years, and […]

Trump School of Virology   When the President tested positive for Coronavirus markets struggled to price in the potential ramifications. Volatility rose and price signals were far from smooth with the US Dollar eventually rising in a safe-haven bid. The market significance of the President’s hospitalisation is exacerbated by the looming presidential election and any […]

US Dollar   Back in the 1990’s the Japanese Yen’s strength based on Japan’s trade position with the USA and the flows of capital inwards to the USA to fund its ballooning deficit, marked the likely direction for the US Dollar versus the other major traded currencies: the GBP, German Deutschmark and Swiss Franc. Until […]

GBP   We have warned in the past weeks that as the outcome on the Brexit talks nears its conclusion (?!) that GBP would behave more like a shuttlecock than a frisbee ie it will be volatile rather than skimming or gliding across the price graphs. Yesterday all it took was for a Financial Times […]

Month & Quarter End   In markets, ends matter. Whether the end in question be the end of a working day, a month, quarter and especially calendar or financial year, it brings with it strong underlying trade flows that usually produce both price volatility and significant valuation adjustments. The mechanics of it are extremely simple. […]

Turkish Lira   On top of its already well reported economic woes, the Turkish Lira is now being further marked down by fears that the clash in the Caucasus between Armenia and Azerbaijan risks drawing in Turkey-the conflict is the most serious since 2016. Turkey has already weighed in against the Armenians. Those market fears […]

One Million   The official coronavirus death count has now risen above one million. This toll counts diagnosed cases of the virus where the new coronavirus has been listed as a cause of death. Frequently a nation’s death toll from COVID-19 has been subject to politics and a steep learning curve across the globe when […]