SGM-FX insights

Shutdown With Congress failing to reach agreement on a funding deal ahead of Tuesday’s deadline, the US federal government is now in shutdown. This is not an unusual situation. So then, what is it and why does it matter to markets? Departments of the federal government deemed non-essential have been shut down. Functions of the […]

A Fork in The Road? Well that was UK PM SirKeir’s “rallying” cry to the UK electorate: it’s me or Reform. Hmm. In a bit of a mixed day for the UK government with some poor Q2 UK economic growth figures at 0.3% after a better Q1 at 0.7%. Then keynote speeches from the UK […]

Jobs Week The labour market has been the key to unlocking a weaker Dollar. Despite moderating inflation and lacklustre economic activity in the US, it had been the labour market that kept the Fed wanting rates held in restrictive territory. As cracks began to appear in the labour market through revisions to prior data and […]

UK Gilt Yields Why is the cost of Government borrowing and thus consumer debt higher in the UK than in Europe? Fear not, this is not a Chancellor Reeves political rant, although the markets are yet to be convinced 15 months in that she has mastered her brief; rather it is the following: persistently high inflation […]

EU Chamber of Commerce China Chamber Supremo Jens Eskelund gave a speech this week which made it all too apparent that China is directing its trade exports away from tariff heavy USA to tariff light EU. At the same time, China is making it much harder for foreign businesses to operate in China. That imbalance […]

Oblivious Material economic and political developments are afoot once again and there is a convincing argument to suggest the FX market is disregarding the lion’s share of them. Firstly, on the economic front, the Dollar has remained relatively unperturbed despite severely underwhelming soft data. The surprise came from the host of purchasing manager’s indices released […]

Centre for Policies Studies This UK think tank has had a good amount of egg on its corporate visage this week due to leader of Reform Nigel Farage using one of the CPFS’ own statistics when he made a speech saying that GBP234 billion could be saved by excluding migrants from benefits. As emotive and […]

The other side of the carry trade  Markets remain enamoured with the carry trade. The summer slump in volatility continues to endure and amongst the environment of falling G10 rates, it is the higher yielding emerging market and commodity currencies that are seeking out bids. It is easy to see those high yielding currencies that […]

iPhone 17 In the last few days there have been quite a few posts about how many days work it takes to earn enough to buy an iPhone17 across the countries of the world with the subtext that life is just not fair. Broadly, Western Europe is quickest and Africa is longest. Rather than dwell on […]

UK Quantitative Tightening It’s hard enough making tough calls on whether to stick to a GBP100 billion bond selling program or not when debating with fellow members of the Monetary Policy Committee, but for Governor Bailey things have got a lot trickier with not 1 but no less than 4 ex MPC members calling for […]

An orderly start Last night the Fed delivered on the widely expected 25-basis point cut to the Fed funds rate. The governing council presented a surprisingly united front with only one descending vote for an immediate 0.5% cut to benchmark rates. This came from newly appointed Stephen Miran whose name you may recognise from the […]

British Pound Despite the efforts of the press to write the story that UK PM SirKeir is on his last legs, Sterling on a 2 month high is unruffled so is not taking that story seriously. Damning with the headline “Lack of Replacement Options Keeps Starmer Safe-For Now” was Bloomberg yesterday which is not exactly […]