SGM-FX insights

Alphabet   It sounds dry stuff at first glance but on closer study smacks of chicanery or at the very least political opportunism. But with the US Department of Justice filing an anti trust case against Alphabet’s Google two weeks before the US Election in which one of the candidates has been outspoken on holding […]

Firebreak   Ireland and Wales have both announced firebreak lockdowns designed to stop the spread of Covid-19 in its tracks. The logic is simple: with the lifecycle of the virus in humans estimated to be a little over 10 days, if every member of the population follows the lockdown perfectly the virus should be eliminated […]

China   People’s Bank of China Head, Yi Gang stated this weekend at an online banking seminar to the G30 what many in the markets already suspected: despite Covid starting in China and almost a year ago having shut down large parts of China’s economy, not only is China back and enjoying an expansion in […]

Germany   After the Great War ended in 1918, what is now Germany’s population stood at 60 million. By 2019 and 100 years later that had grown to 83 million. Looking at the graph with a succession of policies encouraging guest workers the increases have been steady and regular. For the first time in 2020 […]

CHF   Despite immense currency market intervention, the Swiss Franc has failed to depreciate meaningfully. The Swiss National Bank has conducted forex operations totalling tens of billions of Francs with little impact on the currency’s value. As a currency with safe-haven status, it finds itself the beneficiary of defensive demand during times of uncertainty and […]

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 […]