SGM-FX insights

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 […]

Half Term Report for US-China Trade Deal   It all seems a long time ago but Phase 1 of the US-China trade deal was inked on January 15 and now the two sides plan to sit down to evaluate performance under the agreement on agricultural and manufactured goods and energy and services. Covid and the […]

A is for..     A LOT of Money. In an otherwise tranquil and unremarkable market environment yesterday, US technology stock Apple managed to secure a $2 Trillion Dollar valuation. The company known for making iPhones and other such sought after gadgets has one of the healthiest profit margins on the Nasdaq, routinely registering in […]

Currencies and Hurricanes   The hurricane season officially starts each year on June 1 and lasts 5 months but normally is fiercest from the beginning of September until mid October. Currencies likewise tend to be more volatile in exactly the same period. True to form the USD traded at a 2 year low yesterday, GBP […]

Explosion   The decline in the US Dollar has been caused by three things 1) the explosion in ‘money’ and debt 2) the collapse in real yields underlying the Dollar and 3) a lack of control over the virus in the United States. This trifecta of threats to the US Dollar has accommodated the appreciation […]

Thai Baht   With increasingly strident anti government demonstrations in Bangkok yesterday evening, concern is growing that Thailand is once again seeing unrest on a scale that matches the events in 2014 that resulted in a change of government and a coup. At the end of last year Thai Baht (THB) was trading around 30 […]

Order   The United States needed a fifth round of fiscal stimulus. Much like the very virus the economic support is in place to stave away; if you cut the course of antibiotics mid-way through the infection the virus will win and the patient will deteriorate. Unemployment benefits for American workers had expired last month, […]