Tag Archives: SGM-FX

St Mary Axe view

Morning Brief – Market News

Market News


Oil firmer to $22 on the back of POTUS saying that he is expecting Russia and Saudi Arabia to reach agreement on both supplies and pricing soon. USD stronger. Equity markets remarkably stable on the back of horrible but expected US Unemployment figures with 6.65 million new claims. France is preparing a second stimulus package with the likely target to be the beleaguered French auto industry. GBP firm especially against ZAR, NZD and AUD.
Strong man Viktor Orban’s win to rule Hungary by decree has backfired spectacularly sparking huge sell offs in the Hungarian Forint-HUF and forcing VO to perform a U turn as the EU are taking a keen interest which could lead not only to a suspension of EU voting rights but more importantly the cutting of the multiple billions that Hungary receives from the EU budget.



Last business day of the UK Tax Year


Today marks the last business day for the UK tax year, so for those of you affected by that, you only have a few more hours to take actions on investments, dividend payments and other financial matters where you do at least know what the current tax regime holds for the consequences of your decisions. Starting next week all around the world economies will be embarking on voyages in new tax environments where both the quantum and the timeframe for the repayment of the ginormous economic stimuli are unknown. All that is known is that in some shape or form there will be payback. A more cheerful consequence of all this is that there are some bargains on offer in the wine world if you know where to look online and of course …..you can get it delivered!



Shenzhen: The first city in China


Surely some mistake, it’s Beijing you say? Not a bit of it Shenzhen came out yesterday with the reassuring news that it is indeed the first city in China to ban eating cats and dogs… USD v CNY at 7.10 unchanged but widespread relief in the companion pet world…in Shenzhen at least.



World Food Prices


This may come as a surprise to you as it did to us to learn that the United Nations Food Agency has declared that March saw one of the largest falls in global food prices. This was down to two factors: first to a drop in demand as everyone was staying at home and second the dramatic fall in oil prices due to the economic slowdown. The prices in UK supermarkets are not just anecdotally higher but it is a fact that Tesco withdrew many of its offers two weeks ago and Sainsbury’s soon followed suit. Waitrose just became (even) more expensive. So that means….with demand full or more than full and prices lower, supermarket shares are destined to vastly increase their profitability and consequently outperform.


Wishing you a healthy, happy and peaceful weekend!




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Skyscraper view

Morning Brief – One Step Forward…

One Step Forward…

As avid observers of financial markets we spend a lot of our waking hours keeping up to date with market sensitive news. It is an important pursuit to stay on top of markets and the source of that news can come from (virtually) anywhere. Over the last couple of years I’ve seen markets light up from headlines emanating everywhere from the London Evening Standard, through to the financial news source, Bloomberg. Whilst everyone is at home self-isolating and concerned by how coronavirus is progressing across the globe, news becomes of even greater importance to our society. With great power comes great responsibility. I recall when Robert Peston was brought before the House of Commons Treasury select committee for his role in precipitating the financial crisis by employing hyperbole and scaremongering.


In this important time I am extremely disappointed to see (sometimes) reputable news outlets publishing similarly unfounded or misleading analyses. I shan’t name names but on Sky News last night I witnessed a chart with possibly the most ridiculous choice of y-axis I have ever seen. My Physics teacher would not have been impressed had I produced such a graph! The graph had been deployed to demonstrate the potential number of infections if the exponential phase of virus spread continued seemingly indefinitely. Yes, a projection about as useful as a spork in a knife fight. If you were interested, Peston, journalist and presumed significant stakeholder in Combe Incorporated, is still at it. Mr Peston has now been brandishing admonitions that the coronavirus pandemic may be “on par with [the] economic crash”.


This morning’s daily brief is intended to serve as an explainer to counteract the global fake-news pandemic! The principle of infection and exponential growth is a simple one. If each person infected goes on to infect more than one other person then the virus growth will be positive and can appear exponential. It follows that if each person infected on average infects less than one other person the virus will be in decline and eventually be overcome. In health studies this measure called the reproduction number (otherwise known as R or R0) and it is important. With Covid-19 R0 was estimated to be around 2.2. To serve as a source of comparison, the R0 for the common flu for example is approximately 1.3). So, at an R0 of 2.2, for every one step forward we take in successfully treating an infected individual we can expect to have already taken two (in fact 2.2) steps back given the spread of the disease that has taken place in the lifecycle of this infection episode. This figure is consistent with a doubling in infected numbers every 3-to-4 days; a pattern that we have seen unfold in the United Kingdom over the past few weeks.


The London School of Hygiene and Tropical Medicine has modelled how it thinks the all-important reproduction rate has evolved since the UK has undertaken social distancing measures. This type of analysis I will concede is incumbered by the scarcity of relevant and timely data. Given the extent of the social distancing measures implemented by the government and the uptake and adherence to those rules it is projected that R0 in the United Kingdom is now 0.62. Given the scarcity of data there is a significant margin for error meaning that the real post-lockdown figure of R0 could be anywhere between 0.37 and 0.89. Wherever we are in that range we can still conclude that the virus is on the back foot already and is therefore receding. So instead of moving backwards in our combat of the virus for every step forward we now take we only take an estimated 0.62 steps backwards. As a nation we are therefore making positive progress towards our target of eliminating the coronavirus. This analysis, apparently not seen by the news agency that will not be named, means that the exponential phase of virus growth cannot be considered endless; the SKY is not the limit for infection.


Following a tumultuous two weeks in Sterling markets, the Pound looks remarkably directionless as markets await evidence of progress (or lack thereof) in the battle against the virus. The Pound has regained some 60% of the value lose against the US Dollar during the sell-off earlier this month. The jury is still out on whether this move is a fleeting retracement or a meaningful correction.




Discussion and Analysis by Charles Porter

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team discussion

Morning Brief – V or U?

V or U?


Studying the various analyses issued throughout the day from the Far East through to Europe and on to North America on this topic, it is important to appreciate that the authors of these reports simply do not know whether the economic recession is going to be a sharp V or a long U. It all depends (obviously) on when everyone from Wuhan to Western Europe to Washington can all get back to work. And that depends on a whole range of known unknowns, as Donald Rumsfeld once said in respect of Iraq, and therefore in a completely different context.
All I can say is that within an hour or so yesterday, two completely conflicting reports were issued: the first set out to prove that the Chinese economy was on a path to fully recover in the course of 2020 ie a sharp V. The second was headlined that economists had now given up on the likelihood of a V shaped recession and had resigned themselves to a long U.
Yesterday was no different than most days In the recent past: volatile equity markets, wide ranges in currency pairs, oil weak then strengthening etc etc. As we closed the first quarter of 2020 we looked back to our prediction at the end of 2019 that Q1 would see increasing volatility-that is the understatement of the past year and in fact a great deal longer!
At SGM-FX we have succeeded in creating a single virtual office from 14 different locations in the past two weeks and our continuing aim is to deliver the same seamless service to you from those remote locations that we normally provide from 41 Eastcheap.
So from places including E14 to Harrow to Stevenage to Stratford to Islington to Bexley to Dartford to Sandhurst to Putney and the list goes on, we at SGM-FX wish you a healthy and happy Q2 2020.



April Fools Day


It is always tempting to write something of a spoof on April 1st, but I will not do so given the fact that in the present circumstances in particular that might lead to an expensive mistake being made if someone took a decision based on such a false premise. Instead I have researched the Top 100 April Fools of all time and I am pleased to report that in Number One position from 1957 is the BBC Panorama spoof which did the job in spades and remains one of the greatest funny hoaxes of all time. Here it is:


April 1, 1957: The respected BBC news show Panorama announced that thanks to a very mild winter and the virtual elimination of the dreaded spaghetti weevil, Swiss farmers were enjoying a bumper spaghetti crop. It accompanied this announcement with footage of Swiss peasants pulling strands of spaghetti down from trees. Huge numbers of viewers were taken in. Many called the BBC wanting to know how they could grow their own spaghetti tree. To this the BBC diplomatically replied, “place a sprig of spaghetti in a tin of tomato sauce and hope for the best.” Even the director-general of the BBC later admitted that after seeing the show he checked in an encyclopedia to find out if that was how spaghetti actually grew (but the encyclopedia had no information on the topic).



Coming of Age: The Euro


Just over 21 years ago on 1-1-99 the European Union adopted the Euro as the common currency to replace the ECU for those first 11 member states to join. Over the next 16 years a further 8 countries signed up. And another 7 are as of now in the preparatory stage of joining. It is fair to say though, that of those 7, most of them due to economic conditions having changed, are almost certain to need to pass referendums to enable them to get the backing from their publics. 2008 and 2012 were both huge tests for the Euro and Europe for different reasons than to today. 2020 is much more about the individual countries both symbolically, and in some cases actually, having closed their borders. For the first time for more than 60 years the agenda has focused on nation states rather than common interests.

For those readers who are interested, the low versus the USD was on 1-1-02 when it reached 0.90 and the high? 1.60 in July 2008.




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – Tunnel vision

Tunnel vision


The coronavirus epicentre has migrated from Wuhan, Hubei province, through China, before migrating to Europe with Italy and Spain the best observable example of the exponential growth phase. The next epicentre of the coronavirus will be the United States having now recorded more confirmed cases than China. A fall in the number of cases reported in Italy in the last 24 hours to its lowest level in almost two weeks is being read as a positive sign of light at the end of the tunnel. In fact, the pan-European stabilisation in Coronavirus infection rates has prompted the World Health Organisation to conjecture that Italy and Spain’s outbreak may have peaked.


Daylight we see from the sun is about eight and a half minutes old having left our nearest star and taken this amount of time to race through space to our eyes. In more distant galaxies we observe pictures from millions (if not more) years ago as the light emitted from this distant region of space has taken that long to reach our planet. Delays in observation are apparent with the epidemic too with symptoms and potential hospitalisation arising around two weeks after initial exposure to the virus. Quarantine and lockdown which have been underway for as much time in Europe should begin to flatten the so-called curve and now measurably control the infection rate. The improving data in these beleaguered nations should be a signal of such an event.


So, what does the light at the end of the tunnel look like? In China, the economic machine has begun to burr once again. That’s not to say that the nation is back to full capacity and consumption – far from it. The threat of now imported new-strain coronavirus infection from abroad is considerable and as such the country remains far from full import and export capacity. Positively, soft data is beginning to reflect the improving coronavirus statistics. The Purchasing Managers’ Index – a widely recognised piece of survey data that collects responses from purchasing managers throughout the economy – has risen from a trough of 35.7 in February, when fear abounded, to 52 this month. A 50+ reading indicates expansion and improving conditions pointing to a fragile but recognisable improvement in the economic environment. With a (moderately) generous stimulus package in place to capitalise banks and promote lending and economic activity, the People’s Bank of China is also supporting economic recovery.


The United Kingdom, which began lockdown measures sometime after Italy and Spain having witnessed a slower spread of the disease, have yet to show evidence of curve control. This is not to say that the UK response has been inferior to those of Italy and Spain despite many criticisms levied to this effect. The rate of inflection and hospitalisation that a nation can support in addition to the spread which the virus has already recorded vary between populations demanding different responses. Nonetheless, positive signals for the UK observation rate and recovery rate must be recorded I suspect before investors turn bullish on the UK economy.


A quick update on South Africa: a downgrade to junk status in the nation has left the Rand trading at all-time lows versus many of its peers. The sell-off in the sovereign bond market leaves the domestic interest rate at unsustainably high levels as the country battles the outbreak of the virus. Social unrest and quarantine enforcement problems continue to undermine the South African economic outlook and ability of the government to finance the nation through this difficult time.




Discussion and Analysis by Charles Porter

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Morning Brief – OPEC+



The Russians have now said that if other countries agree to join them, Russia will be willing to re-open negotiations with OPEC. In reply-although it was definitively not a reply- the Saudis have said that they have not received any such overtures. It is in the rest of the world’s interests for OPEC+ to hammer out an agreement and an orderly approach to both supply and pricing not only for global economies to be able to plan how best to recover from the Covid-19 hit, but also to calm the as ever febrile economic and political atmosphere of the Middle East.



Spectacular Own Goal


‘I was denounced as somebody that wanted to spend more money than we could possibly afford… I didn’t think that it would take only three months for me to be proved absolutely right by the amount of money that government is now prepared to put in.’


It’s not often that SGM-FX would choose to quote Jeremy Corbyn verbatim (or any other politician for that matter) but to confuse the Covid-19 economic life support mechanism with the management of the economy in normal times betrays a startling lack of a basic grasp of economics. It was JC’s final appearance on the big pitch of the House of Commons as Leader of the Opposition and his final opportunity to be statesmanlike and leave an impression that he would like to be remembered for. However when confronted with such an open goal he somehow managed to backheel the ball the length of the pitch past his goalkeeper into his own net. Respect!



Vincent Van Gogh 1853-1890



Today is Vincent’s birthday – his 167th in fact. When he died at the age of 37 he had completed approximately 900 pieces of work that he had either given away or mostly parlayed for food, absinthe and lodging( not necessarily in that order). There are probably 800 pieces left following natural events such as fires and less natural such as wars-especially WW2. Some of his works go for $100million+ but some of his drawings go for as little as $1million. Research shows that conservatively VVG’s portfolio today is worth more than $10 Billion. Now that puts most 37 year old master of the universe hedge fund managers in the shade. Here is Don McLean and the start of his 1971 song Vincent:


Starry, starry night
Paint your palette blue and grey
Look out on a summer’s day
With eyes that know the darkness in my soul
Shadows on the hills
Sketch the trees and the daffodils
Catch the breeze and the winter chills
In colors on the snowy linen land




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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Morning Brief – End of the Week Round Up

End of the Week Round Up


It is positive if not fully refreshing to be able to comment that at $22.88 WTI Oil has steadied, stock markets put in a second decent session yesterday after an early wobble in Europe, gold is at $1628 and GBP has clawed its way back to its best level for the past week versus USD and EUR. Also as highlighted in earlier Briefings, the ZAR is at its lowest ie the most advantageous level against EUR, GBP and USD for the last 4 years.


SGM-FX HQ is fully staffed (albeit remotely) and we pride ourselves on continuing to deliver both the very best service to you our Clients. What we used before “Lockdown” to call “normal”, has been replaced by a new way of working with instant communication over both audio and video internet mediums and our hours of business are unchanged. So please do give us a call/ mail and we will be pleased to talk/reply responsively and rapidly.



Working From Home


There are some unforeseen consequences of WFH where the blame can be fairly laid on all those journalists who have been detailed by their Editors to write about keep fit exercises that one can do at home. Let’s just get it out of the way : it is very many years since many of our readers will have experienced carpet burn but following the daily home keep fit guides in the newspapers on how best to execute planks, mountain climbers and bear crawls in front of your wide screen, knees, knuckles and elbows throughout the land in all countries will have taken a beating on sitting room hearth rugs. Expect Bandaids and Savlon to be in short supply! So if you want to get ahead of the game you should think about buying the largest medical supplier in the world, Johnson and Johnson shares at $119 down from nearly $160 in January…..!



Statistic of the Week


While the team at SGM-FX have been closely monitoring markets and looking for value in the world’s currency pairs, forced to stay at home citizens of Canada have clearly had their minds on a different set of priorities:
With Bloomberg, CNBC and CNN on for 12-18 hours a day as usual, tracking global market movements in commodities, currencies, bonds, gold, equities and government bonds we at SGM-FX could of course expound further on all of that and more, but instead, we want to alert you to the key stat of the week : internet sales of sex toys has increased since the lock down in Canada by no less than 135%.
O Canada!
O Canada, we stand on guard for thee.
God keep our land glorious and free!
O Canada, we stand on guard for thee.
O Canada, we stand on guard for thee.


Have a great and safe weekend!




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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SGM-FX View of london

Morning Brief – Lekke to be lekke

Lekke to be lekke


An Afrikaans ish phrase meaning it’s nice to be nice.. or so I’m told. In the times we find ourselves in, there seems to be value in examining exactly how nice is nice enough. Take the UK government’s call for citizens to volunteer to support the NHS. As Boris Johnson spoke to the nation yesterday we learned the government had expected 250,000 volunteers in a number of days. In less time than the government had expected, some 405,000 pledges to help had been received. That’s fantastic and I thank those that have been able to do so for their commitment. Unfortunately if we take things like this in isolation we approach our analysis of the population with rose-tinted spectacles.


As Rishi Sunak explained in his defence of the lack of financial coverage for self-employed workers there remains the concern that individuals and corporations will take advantage of the provisions that are being put in place to cushion the public through the Coronavirus pandemic. It’s unavoidable and a shame given that every pound borrowed by the government to fund these unprecedented spending plans will leave us with an enormous fiscal deficit that must be paid back. Look elsewhere: there was a huge spike in Companies House registrations for limited companies and individuals to be sole traders as covid-19 emerged as a pandemic. Whilst some of these certifications will have been granted to pursue philanthropic efforts, the vast majority of them are, I’m sure, to take advantage of people’s fear during this time. Testing kits for thousands of Pounds, toilet rolls for 1000% of their normal prices and hand sanitiser that looks set to rival saffron’s per unit cost are testimony to this belief!


The question of how nice is nice enough is set to become even more important for South Africa in the next 48 hours. We’ve been talking about Moody’s rating decision in South Africa for a long time. Since October when their last decision was to issue a negative outlook ahead of the Q1’20 budget speech, this Friday has been a focal point for the Rand. South Africa’s debt has been held at ‘junk’ status by two of the three major ratings agencies, Fitch and S&P. The classification by Moody’s, as all you Rand buyers and sellers will know, is Baa3- i.e. investment grade by the skin of its teeth. Given the worsening of South Africa’s credit outlook amidst the shutdown that comes this Friday it seems inevitable that a downgrade will take place.


Most economic commentaries out there authored domestically and internationally focus upon two themes. 1) Should and could Moody’s downgrade in good conscience given the state of the global political economic amidst Coronavirus; 2) does a downgrade even matter given everything else that’s going on? I find these two strains of thought defeatist in principle with the second more offensive than the first. Let’s address the first one: for every borrower of money, the debtor, there is a lender of money, the creditor. The very point of these ratings agencies is to create a level of consistency and transparency to lubricate the credit market. If an inevitable downgrade was to be held up it could therefore have the very effect of constraining the lending market, making the situation even worse: not only would South Africa’s borrowing costs rise further there wouldn’t be any money on offer to borrow. So, it wouldn’t be that lekke to be lekke in this scenario. To address the second point: Yes! It will still matter!


The yield on a 10-year South African note has spiked above 12%. That means that money in South Africa is the most expensive to borrow since 2002. At a time when the government is borrowing to fund the shutdown and the (privatised!) South African Reserve Bank is buying assets such lending rates are damaging to the real economy. Given that Eskom doesn’t generate enough revenue to cover its interest payments in times of ‘normal’ borrowing at rates circa 7%, it seems inevitable that it cannot finance its debt at these levels. The concern around Moody’s downgrade is that index linked bonds frequently have a condition that they must only buy ‘investment grade’ bonds meaning that if South African debt loses its last claim to non-junk status is must be immediately dumped into the market.


The magnitude of such debt is estimated, but not known with absolute certainty, to be USD 15bn. I fear that upon realisation of the junk status tomorrow it will not be a ‘buy the rumour sell the news’ non-event given the legal requirement to flog the debt. Yields should therefore climb higher from their already lofty heights. The Rand should spike lower simultaneously. Eventually, the inexpensiveness of the currency combined with the high rate of return for buying it should lead to a correction but, given the uncertainty in the global market at the moment, that correction could be a long time coming and fragile. Those with an exposure to Rand should set price objectives and have a trading strategy in place to take advantage of and also defend themselves from the volatility likely to come with tomorrow’s announcement. Our desk remains fully staffed and is extending our full range of services and we’d be happy to put such a strategy in place for you.




Discussion and Analysis by Charles Porter

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Morning Brief – For UK Business Readers

For UK Business Readers


Here is a useful summary of what the UK Government is offering UK businesses:



For those of you who submit self assessment returns, before you ignore the item above, do look at the final box above which does help.




Too early to heave a sigh of relief but certainly an opportunity to catch one’s breath; the USD having risen in an almost straight line for 11 days has now retraced a bit and there is talk of a return to currency intervention by the Federal Reserve. Gold at $1672 and most Stock Markets up by between 3 and 6% has given a more positive tone. The Dow had its largest rise for decades and finished up 11%. That positivity has extended into the Asian markets this morning. GBP steadier. USD weaker. EUR on its lows but again steady.


Rocket Man


Surprisingly this is not about POTUS and The description he gives to Kim Jong Il of North Korea. Today is Elton John’s 72nd birthday and funnily enough it was 1972 when he released one of his greatest songs, Rocket Man. For teenagers at that time Elton John was generating the most exciting music of anyone and when Goodbye Yellow Brick Road came out the following year, Elton John’s records were spinning on every self respecting pop enthusiast’s turntables. The rest is history!

Happy Birthday Elton!


Rocket Man

Rocket Man


She packed my bags last night pre-flight
Zero hour nine AM
And I’m gonna be high as a kite by then
I miss the earth so much I miss my wife
It’s lonely out in space
On such a timeless flight


And I think it’s gonna be a long long time
‘Till touch down brings me round again to find
I’m not the man they think I am at home
Oh no no no I’m a rocket man
Rocket man burning out his fuse up here alone


And I think it’s gonna be a long long time
‘Till touch down brings me round again to find
I’m not the man they think I am at home
Oh no no no I’m a rocket man
Rocket man burning out his fuse up here alone


Mars ain’t the kind of place to raise your kids
In fact it’s cold as hell
And there’s no one there to raise them if you did
And all this science I don’t understand




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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UK buildings

Morning Brief – There goes the kitchen sink

There goes the kitchen sink


Markets have been talking about the ‘double punch’ that unsettled the benign and plain financial paradigm that we existed in for many years. The full-on right hook came from the Coronavirus that manifested as a simultaneous shock to supply and demand. The left hook came like some kind of bizarre scissor punch in the form of an oil price collapse. I can promise you that I’m not much of a boxer. But if I were to imagine what a boxer might do inside the ring when faced with such an onslaught I’m pretty sure it would be to respond with a similar act of aggression. Given that I hadn’t already been knocked out that is.


Yesterday the market had the opportunity to provide a US-led double punch response to the attack it was facing. The first punch was expected to come from the US government that was debating a fiscal response to the crisis, 25% of which was thought to be spent on Trump’s direct payment to US citizens. There were also provisions for sizeable loans to small businesses, additional liquidity assistance, and investment in healthcare. The second retaliatory punch would have been from the US Federal Reserve in yet another commitment to expanding market liquidity. In the end, the market received only the latter commitment from the Fed as momentum slowed on the $2tn package to support the US economy. The bailout package is still on the table and looks likely to pass but each day of inaction will unnerve the markets further.


Ultimately, the Fed’s action was insufficient alone to placate markets. Immediately after the Fed’s commitment there was a stabilisation of the risk fire-sale that had been taking place over the last few days. However, as markets weighed up the policy response to the developing health crisis stock markets continued to tumble to the benefit of safer havens. The Federal Reserve in a historic move opened two new facilities to the market allowing the Bank to purchase corporate bonds. Okay it sounds about as bland as the plain Ryvita consumers have been stockpiling but it isn’t:


Central banks are the institution in economies that can literally print money. They buy and sell government debt in quantitative easing and tightening cycles by literally inventing money. Their pockets are infinitely deep and the money they create never has to be paid back or made up. Even in the 2008 financial crisis developed markets central bank’s didn’t step into the corporate debt market – it wasn’t seen as a necessary step. However, the infinitely deep wallet is now being used to fund corporate spending directly.


A failing corporation can only stay alive so long as it can borrow in order to fund its commitments. When liquidity dries up in times of economic duress it won’t find people willing to take a risk on it and lend it money. In comes the Federal Reserve, directly funding the debt issuance to provide reasonably priced and guaranteed cash so that they might survive. Despite Trump’s criticism of the Federal Reserve it seems so far that the central bank is doing far more for US citizens than the White House or the US political system.


In the United Kingdom we have entered a lockdown as the public largely failed to heed the social distancing advice that the government had issued. Whilst Sterling reacted negatively to the news of lockdown around 8:30 last night, the Pound is bid this morning parring its losses in the overnight session. Markets have opened up constructively in many sectors as news of Wuhan reopening and Italy’s death toll curtailing reassures investors that this crisis will end.




Discussion and Analysis by Charles Porter

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Morning Brief – Situation summary

Situation summary


Oil at the lowest level since 2001, stock markets off 30%, gold lower at $1476 than it was on January 1, interest rates cut in 50 countries to help, the US Dollar has appreciated by 10%. The secondary effects are as follows: travel restrictions in place in 100 countries, airlines have been hardest hit with flights from the USA to Asia down 98%. Restaurant bookings have fallen by 90% from the same period in 2019.Car sales in China have also fallen by 90%. Global growth forecast is 2.2% versus 2.8% for 2019. It is the sheer speed and the size of the moves that have taken markets and consumers by surprise-but there again in this age of perfect communication especially when it comes to bad news, we should not be surprised. Markets and especially currency markets remain choppy at the beginning of the week.

Just to repeat the FX mantra with apologies for it beginning to sound like a self help lecture(!): set objectives, put protection in place and patience will be rewarded.

SGM-FX remains open and busy with and for you our clients; we are working a full day-every day!



Russian Constitution


In case it’s passed you by, President Putin’s amendment to the Russian Constitution will let him stand in 2024 and that means he could remain in power(legally) until 2036. There have been some protests over the weekend about this but these have been muted due to the illegality of any large gatherings as well as the protesters taking each others’ temperatures and finding it difficult to make much noise from behind their face masks.

The relevance of this in particular at present is the oil price war between Russia and Saudi Arabia which has generated still more invective over the weekend with Russia blaming the Gulf nations and KSA especially. WTI at $22.63 now.



Glastonbury 2021


No not a typo: in case you missed it those who have paid the £50 deposit for this year have been told that they can put it against the 2021 festival. Taylor Swift, Sir Paul McCartney and Diana Ross were just a few of the top names who have been stood down. The 200,000 fans who are disappointed by the reluctant decision to cancel this year have been promised a line up in 2021 guaranteed to wow them. Meanwhile it is by no means certain that the other pop festivals scheduled for the summer months will be able to proceed.

Live streaming from Coldplay, Bruce Springsteen, Yungblood, Christine and the Queens plus some social distancing in your tepee in your back garden is the only realistic 2020 cool and safe vibe.




Discussion and Analysis by Humphrey Percy, Chairman and Founder

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