SGM-FX insights

The time has come These are words the market likely wanted but hadn’t expected to be uttered by the Fed Chair Jay Powell last week. Speaking at Jackson Hole, the Chair adopted the more typical candid tone that the symposium has been known to foster. He suggested that the direction of adjustment was obvious leaving […]

Jackson Hole At the world’s central bankers’ forum there is nothing bigger than today’s speech by Federal Reserve Chairman Powell. What he says about a) Crushing inflation and b) the US employment market will precede his justification for signalling an interest rate cut which in turn will educate what the world can expect for economic […]

Eurozone Yesterday EU inflation came in at 2.6% for the year to end July up from 2.5% to end June. Hardly enough to frighten the horses but the market is all too aware of ECB President Lagarde’s comments regarding inflation in the last few months. On that basis the conclusion is that EU interest rate […]

Same place, wrong time That’s right, the time has come once again where the world’s business, academic and governance elites descend on Jackson Hole. Over the past decade, it has been asked whether such conferences have a place in today’s world. Where all economies face by and large the same problems, the idea of having […]

Volatility Good news and less good news. As we have written recently the Vix or Volatility Index was trading in the high teens before the recent market turmoil on the back of Japan raising interest rates, USA not raising rates and a poor US unemployment number. Then the Vix shot up to 65 before plummeting […]

UK GDP It may not suit the narrative of the UK’s naysayers and doomsters, but Q2 UK GDP showed +0.6%. Apart from being good news for UK plc it almost certainly will dampen the enthusiasm for the Bank of England’s MPC to cut rates again immediately. That in turn strengthens the case for GBP to […]

Yesterday’s news Much of the market had framed yesterday’s US CPI release as the be all and end all. We had seen limited position adjustment moving into the event evidencing just how much of an emphasis investors were putting on the data release. Contrary to the market’s hysteria, to clients we have shared a more […]

Oil Between August 2 and 6 oil traded steadily with Brent at $76.50. That changed just over a week ago with fears of an escalation in the Israel-Gaza conflict and a wider Iran involvement. With a spike up to over $82 the market has seen a rise in the oil risk premium on the grounds […]

Sorry, Newton Every action must have an equal and opposite reaction. Well, it’s a good job then that Newton’s third law referred to an object rather than a financial asset in motion. Otherwise, you might find it rather hard to explain away the effect of labour market data on GBP early on this morning. First, […]

US Election Plenty to think about as we went into the weekend with Trump finally agreeing to a debate with his rival Kamala Harris on September 10th. That news was however quickly overtaken by the announcement that Trump has agreed to an interview with Elon Musk tonight. Given that the weekend polls now show that […]

Toyota For those without a strong disposition look away. Toyota shares fell 35% in the last few weeks between the beginning of July and now, before recovering 13% in the past days. The reasons are twofold: firstly Toyota has been a major beneficiary of the weak Yen and when that abruptly changed the market reacted. […]

Two speed recovery The start of this week brought with it a catastrophic breakdown in risk sentiment. A global spillover was triggered by a disastrous overnight trading session in Asia as local equity markets reacted to the risk adjustment that had taken place during Friday’s European and US trading sessions. Whilst widespread regional weakness played […]