SGM-FX insights

8th time lucky…     As the eighth formal round of talks between the European Union and the United Kingdom get underway in London today Sterling traders are facing the reality of a no-deal conclusion to the transition period in only a few months’ time. Despite the relentless Brexplainers published, this critical moment for the […]

Eastern Mediterranean   Turkey’s President Erdogan ramped up the pressure further on an already pressurised situation yesterday with threats to Greece. The issue is the oil and gas especially in the sea around Cyprus which clearly belongs to Greek Cyprus. Erdogan’s response to that is that he does not accept that ownership so he is […]

US Presidential Election   With just over 2 months to go, it is worth understanding the importance of the Latino vote to the successful candidate. No Republican has won the Election without winning Florida since 1924 so Trump needs Florida as it represents 29 votes of the 270 electoral vote threshold that Trump needs to […]

Turning Tides   The protests in Hong Kong, tensions between the territory and China, and the mainland and the United States in turn, all encouraged speculative flows out of the Hong Kong Dollar as investors raised the possibility of the USDHKD peg breaking. The tide has turned for the Hong Kong Dollar with the pair […]

European Inflation   For the first time since May 2016 Euro-Zone inflation entered negative territory last month which increased the chances of the European central Bank needing to inject further stimulus to generate price growth. Inflation in the 19 countries fell to minus 0.2% versus the ECB target of just under 2%. The implication is […]

Just too good to be true? Can’t take my eyes off of EU(R).   Amongst the winners of the pandemic have been Gold, the Euro and increasingly the Pound Sterling. Sure, the first two have reached their highest rates in one case ever and in the other for several years but for the Pound to […]

Holiday Today   In London today is of course the late summer bank holiday. In the USA it is both National Eat Outside Day and National Bacon Day and yesterday was National Toasted Marshmallow Day. These are new kinds of celebrations for most non Americans but as non historical or religious based are at least […]

Japan: Abe Resignation   Markets in Europe are opening to the confirmation of Japan PM Abe’s resignation on health grounds. USD/JPY was trading at 106.93 and rapidly fell to 106.07 as markets processed the news. While it was known that Abe was unwell, the fact that he has been PM since 2012 and he is […]

Mocking Jay     Federal Reserve President Jay Powell will speak today at the virtual Jackson Hole Symposium. The event has already taken its toll on global markets and the US Dollar in particular with cautious words from Kansas City and Richmond Fed presidents weighing heavy on the greenback. The last Federal Reserve meeting that […]

German Economy   Not just Germany but the rest of Europe are watching for signs of green shoots in Europe’s largest economy. The expectation is for Germany’s economy to grow by 7% in Q3 having contracted by 9.7% in Q2 although the recovery is still described as fragile. However with both manufacturing and services looking […]

Brexit   Throughout the course of Brexit negotiations there has been a severe and frequent mispricing of risk in the UK Pound. The nature of negotiation and politics brings the obstacle of a series of high-risk events not least overnight summits, negotiation phases and general elections as we have seen on several occasions since 23 […]

Australian Unemployment and Exchange Rate Volatility   Like most countries, since March this year Australia has seen gyrations in the unemployment rate: in April at the then height of lockdown it reached 14%; by July this had fallen to 9%, but with further LockDown measures particularly in Melbourne, the expectation is for that number to […]