SGM-FX insights

Torrid Tokyo   USD/JPY 136.20 with the Japanese Yen bumping along at its lowest level for 5 years for the past 3 weeks. But here is another one for the statisticians: Tokyo is suffering from its worst heatwave since 1875 ( not a typo!) and the power supply has little in the way of reserves […]

Germany: stuck in the middle   We wrote yesterday how Germany’s consumption and dependence upon Russian oil and gas was leading it to drag its feet with respect to Russian energy exports. This has become particularly visible in the recent summit of G7 leaders where there appears to be less progress than some may have […]

US 10 Year Treasury   Now yielding 3.12% some way below the peak of 3.48 on June 14. What does that mean? In a nutshell it means that fears of a recession are now outweighing those of inflation in the US market. The US economy shrank 1.4% on an annualised basis in Q1 2022 and […]

Automaticity   Further evidence of Central Bank speak mangling the English language: this time it is the Slovak and Finnish members who, while less strict on syntax are somewhat more rigorous in their fiscal approach than their more southerly colleagues now admonishing Italy which earlier in the week had the temerity to suggest that the […]

The battle of Japan   Trading flows have continued to pummel the Japanese Yen. Even as the USDJPY spot price crossed through 130, there was only a momentary pause before selling pressure continued. The record weakness in JPY had made headlines and forced analysts to question just how low the currency could fall. Despite a […]

Eye of the Storm?   Last week saw the biggest drop in world stock markets for 2 years but now things have calmed down…or have they? With inflation topping out/coming down, it will allow Central Banks to ease off their recent tightening, but that does not mean that volatility will ease, in fact it is […]

An economic reality   Post financial crisis we have seldom seen volatility of the extent that we have experienced recently. Certainly, at least not on such a widespread level that has regularly been characterised by simultaneous write-downs in normally negatively correlated assets. Financial headlines last week at least attested to some concrete actions to justify […]

Eurozone Wildfires   The province of Zamora in north west Spain like many other parts of the Iberian peninsula has seen 40c temperatures over the weekend which has caused forest fires to break out and firefighters to be deployed. Elsewhere in the Eurozone, similar temperatures are being experienced in Paris and no doubt the aircon in […]

Swiss Roll   The Swiss Central Bank managed to shock markets that were widely expecting a rate increase from the UK’s Bank of England but not from Zürich yesterday. The 25bp UK rise having been expected meant GBP weakened by half a cent but the real action came when the Swiss reduced their rates from […]

Central bank mania   Heading into this week, markets had already braced for raised volatility in expectation of two key and much awaited central bank meetings. Those two central banks that were scheduled to meet were the Bank of England and the Federal Reserve. As you will recall, there has been a theme this year […]

British Pound   Already battered as we wrote earlier in the week, GBP came under renewed pressure yesterday from a stronger USD on the back of high US inflation numbers which gave rise to growing expectations of a more aggressive Federal Reserve response in the shape of an early 0.75% interest rate rise. This was further […]

Fragile   Entering market open yesterday many investors and analysts had commented on the fragility that they foresaw for yesterday’s trading session. The catalyst for the unnerved markets was the recently released US inflation data which was still not identifying a peak in price inflation that many had expected to emerge by now. As the […]