SGM-FX insights

Blinkers on The Federal Reserve published its latest interest rate decision last night. As widely expected, it made no change to current benchmark rates. The Fed funds rate therefore remains within a restrictive 4.25-4.5% target band. The Fed did make some marginal changes to its balance sheet operations, tweaking some caps on treasury redemptions. But […]

OECD The Organisation for Economic Co-operation and Development slashed their forecast for 2025 EU growth this week from 1.3% to 1.0%. Germany with slated growth of just 0.4% down from 0.7% was described with a rare touch of OECD humour as the weakest link. While better described as the prime culprit, the effect of flaccid […]

Looking ahead to BoE Thursday On Thursday the Bank of England will publish its second monetary policy decision of 2025. Casting our minds back momentarily to its last publication in February, we are reminded of the surprising shift in narrative from key MPC members. The shift in voting patterns saw one member, previously viewed by […]

US Dollar Uncertainty in the USA caused by a consequential cocktail of on off on tariffs, inflation concerns, derailed interest rate policy, federal spending and higher taxes is outweighing the safe haven status of the Dollar. In more normal times, the Ukraine ceasefire brinkmanship between Russia and the USA would drive up the USD. Instead, […]

Porsche Yet another auto company with falling sales. Only in the case of Porsche, its sales have fallen only 1% in 2024 on the previous year. However margins have fallen considerably with gross operating profit down from EUR 7.3 billion in 2023 to EUR 5.3 billion in 2024. This is enough of a wake up […]

Where’s the Trump Put? On Tuesday Trump went some way towards remediating for his comments that appeared to show a disregard for a recession over the weekend. In a Fox News interview on Sunday the President declined to rule out the prospect of a recession, contributing to the stock market decline come Monday. For what […]

US Recession In the past year the USA and indeed the whole world has been watching and hoping that the Federal reserve will succeed in bringing down inflation without causing a recession. That is the Goldilocks scenario which is described as a soft landing. Looking at the S&P 500 which has declined 7% since January […]

EURUSD rotation  EURUSD has made a dramatic U-turn from the inevitable grind lower to parity most analysts were predicting. A stronger Dollar come year end is still not being removed from the base case by most. However, its current momentum higher stands in defiance of that outcome. However, as we are seeing now, there are […]

Autonomy and Atlanticism These are the stark choices that European leaders seem to be advocating to their still to catch up partially in denial electorates. At one extreme is French President Macron who is banging the drum for European self reliance and autonomy from US protection having concluded that the USA cannot be relied on. […]

European Central Bank As widely expected the ECB duly cut EUR interest rates by 25bps yesterday. However the orderly conduct of EU monetary policy is currently anything but orderly in the light of the German coalition partners agreeing to bypass the long standing debt rules. (see below) While the services inflation element is down to […]

Change of heart? Over the last 24 hours the market has decisively reframed its position of tariffs. Its ability to reshape the logic of tariffs is likely a result of the heightened volatility and risk witnessed throughout the market. The outcome is as follows: tariffs whilst ordinarily and previously thought to be inflationary and a […]

Trumpcession A new word coined by the markets to include in the financial lexicon and this word neatly sums up the concern that Trump’s tariffs will result in a US recession which will in turn pervade the global economy. The USD has weakened on the back of the implementation of the first round of tariffs […]