SGM-FX insights

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 […]

UK Gilt Yields Why is the cost of Government borrowing and thus consumer debt higher in the UK than in Europe? Fear not, this is not a Chancellor Reeves political rant, although the markets are yet to be convinced 15 months in that she has mastered her brief; rather it is the following: persistently high inflation […]

EU Chamber of Commerce China Chamber Supremo Jens Eskelund gave a speech this week which made it all too apparent that China is directing its trade exports away from tariff heavy USA to tariff light EU. At the same time, China is making it much harder for foreign businesses to operate in China. That imbalance […]

Oblivious Material economic and political developments are afoot once again and there is a convincing argument to suggest the FX market is disregarding the lion’s share of them. Firstly, on the economic front, the Dollar has remained relatively unperturbed despite severely underwhelming soft data. The surprise came from the host of purchasing manager’s indices released […]

Centre for Policies Studies This UK think tank has had a good amount of egg on its corporate visage this week due to leader of Reform Nigel Farage using one of the CPFS’ own statistics when he made a speech saying that GBP234 billion could be saved by excluding migrants from benefits. As emotive and […]

The other side of the carry trade  Markets remain enamoured with the carry trade. The summer slump in volatility continues to endure and amongst the environment of falling G10 rates, it is the higher yielding emerging market and commodity currencies that are seeking out bids. It is easy to see those high yielding currencies that […]