SGM-FX insights

Hiccup or more? A build-up of risk is driving stresses in markets. We have seen many such episodes in the post-Covid market and rising risk premia is certainly not something new. However, it is always prudent to question whether stresses in markets are the start of something greater. Risk premia in FX has built up […]

Balkans integrated power network That’s the beauty of the Balkans when it comes to their individual power networks: each country is connected to the others which allows them to manage surplus electricity. So far so good. On Friday all those countries found out what happens when there is a surge in demand caused by 40c+ […]

Currencies on the Move USD up due to Switzerland cutting its rates again and a fall in GBP after the widely expected announcement yesterday lunchtime by the Bank of England of no change contained wording that the market has taken as a promise to cut in August. All that plus the ongoing France debt and […]

Fiscal handbrake France, Belgium, Italy, Hungary, Malta, Poland and Slovakia. All of these countries were identified by the European Commission’s report as having broken fiscal deficit rules. As a result, each of these countries are now subject to excessive deficit procedures. With so many nations having fallen foul of the Union’s standards for fiscal sustainability, […]

British Pound Somewhat in the doldrums as the market awaited this morning’s inflation figures and tomorrow’s interest rate decision. Truth be told, it is the inflation figure that is keenly awaited rather than the rate decision which is not expected to result in any move by the Bank of England. GBP/USD 1.2680. Reform UK Listening […]

Investment The composition of foreign investment plays a significant role in aggregate foreign exchange flows. All investment levels are important when considering the propensity for growth within a given economy. But overseas investment has a more direct impact upon the FX market. Typically, in good times, you can observe a higher allocation in favour of […]

US Jobs With Federal Reserve Chair Jerome Powell stating that the US jobs market is now back to where it was 5 years ago ie prior to the Pandemic, it is all too easy to accept his word for it; except while there are 1.2 job openings for every 1 job seeker which is the […]

Chinese Electric Vehicles When the news of the EU slapping additional tariffs on imports of Chinese EVs from the current level of 10% this week, there was a sense of inevitability but not a widespread appreciation of the quantum: some Chinese EV imports will attract an additional tariff of over 38%. China needless to say […]

Eclipsed The message from Jerome Powell last night was on the whole unequivocal. In the face of higher inflation, the Fed expects to take a more conservative and cautious approach to monetary policy adjustment. In doing so the dot plot showed just one rate cut would take place this year should the median policy path […]

UK Election Landslide As we are being told that it is game over for PM Rishi Sunak, it is worth taking a look as to what that would mean for markets with an incoming Labour Government for the first time for 15 years with a large majority and an untested cadre of top leaders. Deep […]

All in (except Macron?) The results of the European Parliamentary elections have hit the Euro hard. Key crosses including EUR/GBP and EUR/CHF as well as the barometer of EUR/USD all trade lower, reflecting a weaker Euro. A greater than expected rise of populist voting habits across the continent has increased perceived political risk within Europe. […]

Vigilance, Commitment and Perseverance Those are the requirements from ECB President Christine Lagarde for Europe to win the fight against inflation. What is conspicuously missing is an indication of the likely timing for the next cut in EUR interest rates, but it will not be at the time of the next ECB meeting in July. […]