SGM-FX insights

Oil   With WTI at $63.28, it’s lowest level since May, oil prices yesterday marked the sixth trading session in a row when prices have fallen. It’s based on two factors: supply or in the market’s view potential over supply plus ongoing and non receding Covid infections threatening to derail the global economic recovery. Those […]

Deflated   Moving into yesterday’s data release, markets were expecting July inflation to be read in the United Kingdom well in excess of 2%. The consensus forecast was 2.3% versus a previous figure of 2.5% in June. Both headline and core inflation came in far softer than expectations at 2% and 1.8% respectively. The reaction […]

Spain   The first tranche of EUR 9 billion funding was dispensed to Spain yesterday. There is a further EUR 60.5 billion promised to Spain from the overall EU EUR 800 billion recovery fund. Spain plans to revitalise its economy with these funds by digitising it and becoming greener. The question is whether those measures […]

Japanese Inflation   Generally when a country’s wholesale price inflation hits a 13 year high, markets reach for tin helmets and dig in, but in the case of Japan it has been met with more ho hum and smiles of disbelief given the lack of meaningful growth in Japan for many years. Global commodity inflation […]

Too Much, But Not Enough   Ahead of an inflation data release yesterday afternoon, the trade-weighted Dollar index stood at year-to-date highs. Positive US headlines and developments within the US Federal Reserve over the past two weeks had helped USD secure further gains on its major crosses. The inflation data released yesterday afternoon was expected […]

Sub 1% UK Mortgage Club   UK banks are vying with each other to capture market share with some historically cheap deals which will free equity to invest in either property or other assets. For example HSBC is offering 2 year fixed at 0.89% and 5 year fixed for 0.99% while Lloyds Bank owned Halifax […]

Data vs Data   Markets had placed their bets on a low volatility summer period and so far at least, across the broader market this has largely been delivered. Key FX pairs have stayed within recent ranges and channels with volatility still realising below or in line with the record low implied volatility that markets […]

German Federal Election   Considering that the Elections are next month on September 26 and represent the changing of a long standing but now old order when Angela Merkel, in power since 2005, stands down, it is surprising that there is not more written about the standing of the various parties and candidates. Let’s let […]

Central Europe   Leading hawks at the Hungarian and Czech central banks are setting the pace which means that with their pre-emptive anti-inflationary measures of rate rise programmes, their currencies respectively the HUF and CZK are likely to be the leading Eastern European currencies in the next few months. In third place comes Poland whose […]

Claridy   Yesterday afternoon saw EURUSD kick into life. Initially, with US Treasuries still continuing to be bought in droves, demand for the US Dollar was weak. The market had a key technical level of 1.19 in its sights and rode towards it throughout the morning session. A weak private employment report (US ADP data) […]

Henan Province, China   As we all know, China has suffered devastating floods which has been worst in Henan Province which is home to major businesses and is a key transport hub. Those floods have disrupted roads and railways which has impacted delivery of raw materials and goods. Now it is clear that those floods […]

Copy and Paste?   The Bank of England’s latest policy decision is due this Thursday afternoon. This will be an opportunity for the central bank to set forth its latest assessment of the economy and announce/forebode any required changes to the monetary backdrop of the UK economy. Economic data has, on the whole, largely continued […]