Highlights

SGH reports are highly valued for keeping clients and policymakers informed and well-ahead of consensus and the news cycle on the macro policy events driving global markets.

2015
April 16, 2015
SGH Insight
"The next negotiating inflection point is the Eurogroup meeting in Riga on April 24, but any real decisions will now look to have to wait until May 11 in Brussels. If between now and then there looks to be an "imminent" accident looming, a rushed intervention at the heads of state level with a "daily escalation" plan is likely."
Market Validation
(Bloomberg 4/18/15) "Greece’s government bonds had their worst week since the aftermath of Syriza’s January election victory as the nation failed to make tangible headway in its efforts to secure funding and avoid a default.
The yield on 10-year Greek debt climbed to the highest since December 2012 as the clock ticked down toward almost 1 billion euros ($1.1 billion) of payments due next month."
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April 14, 2015
SGH Insight
"That means the BOJ will be frozen on monetary policy, and continue to let the economy ride as is, certainly without offering any additional near term monetary easing."

SGH Fed: Here Again April 27, 2015

"The Committee will acknowledge the slower first quarter growth, but within the same breath that it is likely to prove transitory. That translates into expectations of unemployment falling steadily through the year and low inflation persisting but still picking up next year "
Market Validation
(WSJ 4/15/15) "Bank of Japan Governor Haruhiko Kuroda said that the country’s underlying inflation trend is steadily improving, that inflation expectations are rising and that corporate wage- and price-setting behavior is changing."

(Bloomberg 4/15/15) "Yen drops 0.2% to 119.58 per dollar, set to snap three days of gains"

(Bloomberg 4/30/15) "Asian stocks dropped the most since January after the Bank of Japan refrained from boosting stimulus and as the Federal Reserve downplayed weak U.S. economic growth and kept raising interest rates on the table for later this year."
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April 02, 2015
SGH Insight
“We firmly believe that despite the threats and warnings, Greece will indeed meet its April 9 payment to the IMF”
Market Validation
(Reuters 04/09/15) "World stocks marched higher on Thursday, lifted by Greece's confirming it will pay a 450 million-euro loan tranche to the International Monetary Fund."

(FT 04/09/15) "Greece repaid €450m it owed the International Monetary Fund on Thursday, sending bond yields sliding as investors’ showed relief it had met its deadline. Yields on the country’s shortest dated notes declined, with three-year bonds declining 54 basis points to 20.08 per cent and five-year bonds falling 30 bps to 14.98 per cent."
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March 31, 2015
SGH Insight
" While a “Framework Understanding” announcement may be weaker than the signed “Framework Agreement” that was hoped for today, where it matters for markets, it may end up being far more significant than is being widely assumed."
Market Validation
(National Post 04/02/15) "Crude oil futures extended losses after Iran and world powers said they reached an outline accord that keeps them on track to end a decade-long nuclear dispute. Brent slid as much as 5.4% in London, while West Texas Intermediate crude dropped 4% in New York."
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March 25, 2015
SGH Insight
"We believe there is a reasonable likelihood Greece’s payment to the IMF may be missed and delayed by a week or two as Athens scrambles to put together a budget acceptable to its creditors."
Market Validation
(Bloomberg 04/01/15) "June bund future climbs as much as 45 ticks to 159.21, contract peak, after Spiegel reports that Greece doesn’t want to respect IMF April 9 repayment deadline."
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March 13, 2015
SGH Insight
"If, defying the skeptics, there is a substantive agreement on a framework by the end of March, as we expect, the next deadline will be July 1 for a comprehensive agreement."
Market Validation
(FT 03/24/15) "The prospect of a wave of Iranian crude exports has already hit internationally traded Brent: after rebounding to $60 a barrel last month, it now hovers around $55 a barrel amid expectations of a deal by March 31."
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February 19, 2015
SGH Insight
"We would venture a guess of perhaps as high as 50% odds that the parties don’t have enough time to finalize anything over the next 24 hours beyond a partial communique or agreement to keep negotiations going."
Market Validation
(FT 02/20/15) “The deal, reached at a make-or-break meeting of eurozone finance ministers on Friday night, leaves several important issues undecided. The new Greek government is to submit those measures for review to the International Monetary Fund and EU institutions on Monday, and officials said if they were not adequate another eurogroup meeting could be called on Tuesday."
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February 18, 2015
SGH Insight
"June, in other words, is when the FOMC is more likely to make its decision on the lift-off timing rather than when it actually pulls the trigger on that long-awaited first rate hike. Indeed, we still see a more prudent building of consensus in the Committee from June into September as the most likely meeting for a rates lift-off"
Market Validation
(Bloomberg 02/18/15) "May/Aug 2015 fed fund futures spread at 13.5bps, implies 54% probability of a 25bp rate hike at June or July FOMC meetings after Jan. 27-28 minutes showed many officials inclined to stay at zero longer."
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February 10, 2015
SGH Insight
"And from the few signals we pick up from Moscow, we believe a cease fire agreement can indeed be reached."
Market Validation
(RT 02/12/15) "The MICEX index hit 1,805 points, its highest level since April 2011. The ruble, which has lost more than 50 percent against the dollar in the last year, improved 3.6 percent to 64.65 per 1 USD. Before the talks, it dropped nearly 3 percent against the dollar on the worry a deal wouldn’t be struck."
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January 15, 2015
SGH Insight
"Furthermore we believe there is a good chance the ECB may in the end deliver more than the 500 Billion Euro purchase program reported by the press to have been discussed at last week’s interim meeting as the 'maximum' option."
Market Validation
(ECB Introductory remarks 01/22/15) "Under this expanded programme, the combined monthly purchases of public and private sector securities will amount to €60 billion. They are intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term."
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2014
November 11, 2014
SGH Insight
"As recently as yesterday there was overwhelming consensus in the media, markets, and analyst community that Prime Minister Shinzo Abe would press ahead and announce as planned the second installment of sales tax hikes around December 8, after the release of the final reading of Japan’s third quarter GDP. We had been warning for some time, however, that despite those expectations the political landscape was shifting and that it was in fact probable Abe would delay the second tax hike, even with the major monetary stimulus assist provided to the economy by Bank of Japan Governor Haruhiko Kuroda at the October 31 Monetary Policy Committee meeting."
Market Validation
(CNBC 11/18/14) "Japanese Prime Minister Shinzo Abe called a snap election on Tuesday, and announced a delay in the second sales tax hike by 18 months after the country fell into recession."
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September 03, 2014
SGH Insight
"We suspect there is at least a reasonable chance the ECB could add a small rate cut tomorrow to the much anticipated roll out of its ABS program. While of limited effectiveness as a stand-alone measure, and thus not widely expected, a small rate cut alongside other measures could help generate greater interest in the upcoming TLTRO as well as keep pressure on the Euro in further reinforcing the Eurozone rate differential story."
Market Validation
(WSJ 09/4/14) "In an effort to keep too-low inflation from derailing the eurozone's weak economy, the European Central Bank surprised financial markets with a cut in interest rates and new stimulus plans, despite opposition from Germany's powerful central bank."
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June 04, 2014
SGH Insight
"We find it difficult to recall a time where there was a more universal consensus among traders and analysts that a central bank’s upcoming actions were fully priced in than there is now for tomorrow’s ECB Governing Council meeting. One would be hard pressed indeed to find an article or commentary not running with the "priced in" theme."
Market Validation
(Market Pulse 06/5/2014) "The euro fell to a four-month low against the dollar after the European Central Bank cut interest rates, as expected, and said it would announce further policy easing measures to tackle the threat of disinflation."
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