SGM-FX insights

China and the USA What prompted POTUS to escalate the trade war last week? Before answering that, it is worth a refresh on the current state of play: US tariffs on China average 58% and China on the US 33%, and the next cliffhanger date is November 10, after which the current threat is for […]

Calling time on Swissy Switzerland’s Franc may be destined to faulter under its own weight. Despite rock bottom interest rates, the Swiss Franc has been a significant beneficiary of the post-Covid and Trump2 world. EURCHF, a key barometer of European risk, shows some 20-cents worth of Swiss rally post-Covid. The pair has dropped from well […]

Friday night US Markets There was an element of the US stock market temporarily running out of oxygen at the heady heights that it had reached and looking for an excuse to take profits/sell. That excuse was provided in spades by POTUS who pronounced that he would implement much higher tariffs against China. That was […]

US Dollar A further lurch upwards for USD yesterday morning as French politics affected the EUR and the prospect of Japan’s first female Prime Minister as well as the accompanying uncertainty weaken JPY. GBP also feeling the effects of that strong USD. The USD/JPY at 152.80 also in uncomfortable territory for Japan. EUR/JPY 177.41. China Youth […]

A look ahead The UK Pound continues to be influenced by the gilt market and fiscal concerns. Sterling has been a very expensive short this year, contributing to its relative outperformance. In fact, the few episodes of sustained weakness we have seen tended to have either coincided with a global risk-off turn or a sharp […]

US Dollar For differing reasons USD is having a strong week both against the Japanese Yen and the EUR. Both currencies are weakened by political headwinds but that is where the similarities end. France is rather more influencing the EUR due to worries over its debt and its resistance to getting it under control. Japan […]

Le sick man of Europe? Over the decades, the phrase ‘sick man of Europe’ has been levied at many countries. Believe it or not, given its heralded status as the (often misfiring) engine of Europe and driver of growth, the phrase started life aimed squarely at Germany. The lesser loved UK, back when it was […]

US Government Shutdown In the past 50 years the US Government has shut down 21 times the longest of which was in 2018 which was for 5 weeks – and that to remind you was during Trump 1. Why might this time be different? This time POTUS has stated his determination to take the opportunity […]

Reparation Loan 3.5 years in, and the EU is gradually reaching agreement on how to assist Ukraine financially – well almost. Admittedly, the principle of seizing a countries’ frozen assets is ground-breaking, but so was the 2022 Russian invasion of Ukraine and the seizing of land and assets. In case you are unaware, the proposal […]

Shutdown With Congress failing to reach agreement on a funding deal ahead of Tuesday’s deadline, the US federal government is now in shutdown. This is not an unusual situation. So then, what is it and why does it matter to markets? Departments of the federal government deemed non-essential have been shut down. Functions of the […]

A Fork in The Road? Well that was UK PM SirKeir’s “rallying” cry to the UK electorate: it’s me or Reform. Hmm. In a bit of a mixed day for the UK government with some poor Q2 UK economic growth figures at 0.3% after a better Q1 at 0.7%. Then keynote speeches from the UK […]

Jobs Week The labour market has been the key to unlocking a weaker Dollar. Despite moderating inflation and lacklustre economic activity in the US, it had been the labour market that kept the Fed wanting rates held in restrictive territory. As cracks began to appear in the labour market through revisions to prior data and […]