SGM-FX insights

Default by Default?   I’m advised that before the modern English word default existed in its present form, it held derivations of a Latin word ‘fallere’ meaning to disappoint or deceive in the contexts of modern English (anachronism aside). Hijacked sometime later by the French, the Latin word picked up a quintessential ‘de’ and several […]

UK   With the UK jobless rate falling to a 2 year low of 3..9% and average weekly earnings rising by 4.8%, a rate rise to 0.75% tomorrow by the Bank of England looks all but certain. GBP/USD 1.3070.   Electric Bentley   Following buoyant 2021 profits of EUR 389 million, Bentley has announced that […]

China and Asian FX   Markets haven’t always known where to look over the past couple of weeks as high volatility has been witnessed across all sectors. USD funding stresses look relatively well contained thanks to swap lines at respective international central banks allowing the demand for Dollars not to spill through to foreign exchange. […]

Hedging: the real world of aviation fuel   Often our clients ask us about hedging their currency exposures and request typical hedging strategies for them to consider. Nowhere is there currently a better example of the consequences of hedging versus not hedging than in the airline world with respect to aviation fuel. Last May British […]

ECB   Faced with the choice of choking off economic recovery or increasing the risk of getting (further) behind the curve, the ECB President, Madame Lagarde has taken the less hard decision of removing economic stimulus measures. Better that than wait for the inflationary effects of Ukraine to feed through further. EUR/USD 1.0985.   Oil […]

End of the beginning?   Markets took a decisive turn yesterday unwinding much of the highly defensive positioning that has characterised many recent trading sessions. The move to adjust to a less doomsday mindset in markets was likely catalysed by the West’s latest round of sanctions. Over the weekend and into trade on Monday, speculation […]

Metals   Copper $10,070 a tonne and at a record high as are Zinc and Aluminium. However Nickel puts them in the shade in terms of a move up-having been $54,880 on Monday it reached $101,365 per tonne before retracing to $80,000: 4 times the price at the start of 2022. Nickel is currently suspended […]

Stressed   A lot of commentary at the moment will talk of disorderly or stressed financial markets leading to abnormal price movements. They’re not wrong but it often gets lost or overlooked exactly what a distressed or disorderly market is doing. You’ll notice the symptoms of a market showing signs of vulnerability and stress in […]

Oil Sanctions on Russia   With real discussions actually taking place last night led by US Secretary of State Antony Blinken, the prospect of the EU and USA leading a wider block on buying Russian oil looks more possible if not yet probable. WTI closed on Friday at $115.68. The Iranian nuclear non proliferation deal […]

Auto Stock Market Valuations and GBP/EUR     In pole position on the grid is Ferrari whose shares trade at an eye watering 39 times annual earnings. Conversely Mercedes only manages a seven times multiple. This is the landscape confronting VW’s Board as they deliberate about listing Porsche which makes up a substantial portion of […]

Testify       Chairman of the Federal Reserve Jay Powell testified in front of US law makers yesterday. The event came ahead of the awaited March monetary policy decision but also at a time when investors were scrambling to identify the impact on US Treasuries from the conflict in Ukraine. The Russian Invasion had […]

Oil and Shipping     Prices rose sharply once again yesterday with WTI reaching $98.28 by midday. The oil market at present is working on the assumption that an already announced increase in supply from OPEC will mitigate oil delivery disruption arising from Ukraine and Russia thereby capping further price rises in oil. Russia exports […]