You haven’t missed a great deal in the past 8 trading sessions starting 23-12-19. Markets have been thin and most movement was around the US military action in the Gulf early on Friday. Generally the USD is net net weaker since 23-12-19 having been weaker still until Friday when it strengthened half a cent against both EUR and GBP. Stock markets are little changed. Oil has firmed but has an implicit cap on it given the markets’ view that OPEC will not be sufficiently in accord to limit supply in turn to generate higher prices.
BUT….if you think that we are going to have an uneventful Q1, turn your attention to the political arena! Markets have not fully priced in the risks and consequences of the potential out turns of the political events across the world from Australia to Hong Kong to India to the Gulf to Europe to the USA in the last two weeks.
Well the same might well be said of Machilipatnam on the Coromandel coast of India in the 70’s…the 1670’s! Yes it was 1673 when Thomas Bowrey of the East India Company landed at Machilipatnam and began trading. After a tough day at the negotiating table, he was encouraged to join the local merchants in a few rounds of bangha or what is better known today as marijuana. While interested in its soporific properties and its potential medicinal application, Bowrey was most intrigued in the possibility of turning bangha into a global commodity. If ever a pothead was ahead of his time, Thomas Bowrey was it, given that it took a further 300 years for bangha to become legal and commoditised and global!
So as you take down your Christmas decorations, consider (briefly) going to the gym as a new year resolution and head off to the pub, all here at SGM-FX wish you every success on both a business and a personal level and a very Happy New Year!
Discussion and Analysis by Humphrey Percy, Chairman and Founder