SGM-FX insights

Chancellor Reeves Market observers were no better informed at the end of the Rachel Reeves speech than they were at the outset yesterday morning. The only surprise was that having comprehensively floated options in the past two months for inclusion in her November 26 Autumn Statement, that the Chancellor should have elected to speak at […]

One in three Until recently, the market had held the probability of a rate cut at the Bank of England’s November meeting at near zero. Above-target inflation and insufficient evidence of faltering economic growth alone suggested the BoE would continue to adopt a wait and see approach. Combine that with the uncertainty of the UK […]

EU Expansion With expansion once again on the EU agenda this week and a report saying that more than half the population of the EU are keen to expand the bloc further, it is worth looking at the official candidates: Albania, Bosnia and Herzegovina, Moldova, North Macedonia, Serbia plus Turkey and Ukraine with Kosovo as a […]

FX Rates in 2035 Goldman Sachs yesterday published their long term forecasts for FX rates in 2035. Those forecasts are based on the “mean-reverting behaviour of real exchange rates adjusted for structural factors such as productivity growth and terms of trade”. Before getting too excited, it is worth pointing out that using that methodology is exactly how […]

Two cuts down The Federal Reserve cut the target Fed funds rate by 25-basis points again last night. This brings the benchmark range down to a 3.75-4% banding. This move had been widely expected, but that does not mean it did not have any market impact. As of market open today, the dollar continues to […]

UK Productivity The OBR or Office for Budget Responsibility has likely downgraded its forecast for UK Productivity by the time that you are reading this. Despite taking a leaf out of her boss’s PM playbook and jetting off on an overseas business trip when unwelcome economic news is in the offing, for Chancellor Reeves there […]

A glimmer of (European) hope The ECB has made significant progress in cutting rates towards an accommodative level. The Eurozone saw evidence of cooling inflation much sooner than many economies and has been able to respond accordingly, cutting the deposit rate to 2%. The ECB will meet again this Thursday to publish its latest monetary […]

UK Non Doms An excellent suggestion from the previous CEO of Rolls Royce, Sir John Rose in a letter that he had published in Saturday’s Financial Times: before it’s too late, offer a flat tax amount to non doms of GBP 500,000. At a stroke that would more than compensate for the disastrous treatment of […]

Autumn Statement Trailing some prospective budget measures ahead of the UK Budget is as old as well, the UK Budget. Chancellor Reeves would do well to look up the TB/GB(Tony Blair/Gordon Brown) playbook from 1997-2008 which was a masterclass in the dangle, the tease and the test. Chancellor Reeves a good 5 weeks ahead of her […]

Inflation’s peak? Yesterday’s publication of the latest UK inflation report will be welcomed by households and the government alike. The report released prior to the market open yesterday showed UK inflation to September remained stable month-on-month. That might not sound like a whole lot at face value, but it is in fact critical that headline […]

UK Government Borrowing Borrowing for September was reported yesterday by the Office of national Statistics or ONS to be GBP 20.2 billion, up by GBP 1.6 billion from the same month in 2024. What that means is that public spending exceeded tax income by that amount. That takes borrowing for the first 6 months of […]

A testing week Markets so far have largely endured the admonitions coming from significant figures within the world of finance. The Bank of England’s own Andrew Bailey’s warnings of the risks of a market crash were uncommon for an MPC chair and initially took markets aback. Shortly thereafter, prominent figures warned of a pre-Halloween fright […]