SGM-FX insights

UK: Mind the Gap   This refers to the gap between UK productivity and G7 productivity where the UK languishes at 13% below that of the average of the G7. While an improvement from the previous 16% deficit, the fact remains that the UK has an ongoing productivity problem. A study by the London school […]

Good news! Until it’s not.   It was positive to see the employment data released this week. Perhaps of most importance was the unemployment rate, observed in the three-months to November at 4.1% versus an expected 4.2%. Despite only realising a whisker better than forecasted, the data paints a picture of the UK labour market, […]

Eurozone Household Energy Bills   Soaring European gas price rises are being passed on to consumers by the utility companies faced with the alternative of going bust. Examples of monthly rates trebling are rife for example in Cologne, Germany. The average annual Eurozone domestic energy bill for 2020 was EUR 1,200 but that is forecast […]

Odd one out?   At a time when the rest of the global economy is looking to reduce record monetary stimulus, there is one key economic power that stands at odds: China. Yesterday, amidst a much-awaited economic data release, the People’s Bank of China chose to cut interest rates by 10 basis points. In the […]

Ukraine   One of our readers has written asking what the effect on the markets would be if those 100,000 Russian troops massed on the Ukrainian border were to be ordered across it. As of now, markets are surprisingly sanguine about Russia invading Ukraine and are treating it more akin to a border dispute than […]

France   News of the relaxation of travel restrictions for UK travellers to France set pulses and share prices racing in the travel sector at lunchtime yesterday. Inghams and Crystal both reported sharp increases in web traffic enquiry and bookings on their sites reflecting British skiers rushing to secure their places for le great downhill […]

The Ultimate Cop Out?   You’ve probably seen it a number of times in financial commentaries (but not of course, in our communications!) usage of the phrase: ‘It’s already priced in’. This can unequivocally be labelled as the ultimate cop out for misdiagnosing or simulating the outcome of an event upon a financial product. For […]

Derek Tullett RIP   One of the architects of the modern money and FX markets both in London and worldwide, Derek Tullett founder of Tullett and Tokyo passed away on Sunday at the age of 87. A hugely capable broker who was renowned for his machine gun spoken delivery of forward Cable pricing at the […]

Warning or Inevitability?   Yesterday almost every financial news channel out there was covering the Nasdaq Composite stock index. They were sharing headlines that versus its all-time high reached in November, the index had fallen 10%. 10%, but more commonly 20 and 25% after that, are seen as significant retracements in markets that could signal […]

US Markets   While the US unemployment rate falling from 4.3% to 3.9% was a boost, the new jobs figure released on Friday of 199,000 was much less than the 450,000 forecast. Record numbers are quitting their jobs in the USA in a wave dubbed “The Great Resignation” choosing quality of life and WFH. Let’s […]

US Federal Reserve   So it looks now as if the Fed will raise US rates in March-the market has ascribed a 70% probability to them doing that. That sent the 10 Year US Treasury Bond yield to 1.76%-the highest for 2 years. Tight labour markets despite there being 3 million fewer jobs than at […]

USDJPY   The value of the US Dollar rose sharply against the Japanese Yen in 2021. The broad and sustained rally saw the Japanese Yen lose approximately 12% versus the greenback last year. The sell off was significant enough to not only reverse the gains made in 2020, but to push USDJPY to five-year highs. […]