SGM-FX insights

October 28 This turns out to be the date that UK Chancellor Healey has selected for his first Autumn Budget. Importantly it is the date that the UK will find out whether the symbiotic relationship between Prime Minister and Chancellor can withstand the stress of reconciling PM Andy Burnham’s promises and spending plans with the […]

UK Interest Rates Expectations were for the Bank of England to leave interest rates unchanged yesterday morning given that UK inflation stands at 2.6% and while above the 2% target, is insufficiently so to warrant action. In recent years, the BoE has been criticised for not being sufficiently forward looking, and that represented the argument […]

Everything bar something  Cross-asset volatility is likely to push higher in coming sessions whilst the market navigates significant earnings reports and economic events at the same time as it nurses a headache. That headache is caused by the dual risks of yesterday evening’s Federal Reserve decision and the seemingly re-escalating conflict within Iran. Kevin Warsh, […]

UK Rates and Sterling Parsing the language of Central Bankers has been an art form since the beginning of well, Central Banks if not time which in this context began at the end of the 17th century. One thing that all the largest Central Banks agree on is that inflation is a worry and remains so. […]

Wrong Footed on Rand The South African Reserve Bank conducted its latest monetary policy decision last week. Despite a near-unanimous expectation amongst economists for a 25-basis point hike, the SARB delivered a ‘hold’ decision. With many forecasts having previously implied significant upside potential for the Rand this year, the decision to hold benchmark rates at […]

Oil Because oil is back once again at the front and centre of the market agenda, rather than spending more time on why the price is at USD 98 slightly lower than Thursday’s USD 100+, we will try and list the factors that will determine where it is going. On the assumption that there is […]

ECB President As regular readers will recall, we have previously speculated as to who might succeed Christine Lagarde as ECB President when her term is up in October 2027 now just 15 months away. The watercoolers in the ECB’s HQ in Frankfurt have been busier in the last few days with talk that Mme Lagarde […]

A quiet ECB event Market commentary has paid very little lip service to today’s ECB decision. Despite the Eurozone facing challenging and conflicting fundamental economic forces, the market is ascribing a very low risk profile to today’s decision. That’s also despite ECB rate expectations having been on the move following their 25-basis point hike to […]

UK Chancellor Market Reaction John Healey’s appointment as Chancellor has broadly been greeted with surprise and relief in the markets. Surprise that it was not Shabana Mahmoud given the systematic leaking last weekend and relief that JH is both a safe pair of hands and on past performance prefers defence spending over ever rising benefits […]

The Burnham Gambit Many would have thought, ‘who’s Shabana Mahmood’ when we wrote of the headlines that had driven GBP higher last week. If you were amongst that group, you may find little reassurance this morning when I tell you that those headlines that had favoured GBP have transpired to be wrong. Incoming Prime Minister […]

Change in the Westminster air? Only a matter of hours until the newly minted UK Prime Minister will unveil his agenda for change and his Cabinet appointments. Markets await that avidly. There are a couple of questions: the first of course is as to the identity of the new Chancellor and the implications for the […]

Copernicus No, we are not referring to the Polish polymath of the same name known as the father of modern astronomy but to the EU’s Earth observation program. What Copernicus is telling us is that the EU is heating up much faster than almost any region on the planet and whereas in 2018 the EU […]