SGM-FX insights

German Inflation Nothing to do with zeppelins this time, but more to do with German Consumer Price Inflation coming in higher than expected yesterday at up 2.6%. This was a set back for those calling for a cut in EUR interest rates as the mood swung towards the likelihood of the European Central Bank holding […]

British Pound Even optimists on interest rate cuts have been wobbling over the weekend as to the likelihood of a UK interest rate cut in August from the current 5.25%. While it is still expected that rates will be down to 4.75% by year end, the rhetoric has moved to higher for longer. That means […]

Germany The German business climate was slated to rise in July but instead it fell in terms of both current and also future expected business conditions as reflected in the IFO Index made up of manufacturing, services, trade and construction sectors as submitted by 9000 firms. Germans wishing doubtlessly that they could be as strongly […]

British Pound GBP is currently in fashion: with a record number of long positions and currently at the top of the G7 currency performance charts and after a period of being deeply unfashionable GBP is wanted-in a good way. The reasons for this are diverse: first off is the Bank of England’s caution on cutting […]

UK Borrowing The Office of Budget Responsibility predicted that the UK would borrow GBP11.6 billion in June. As it turned out the UK did in fact borrow GBP 14.5 billion in June. All sorts of questions arise about the OBR and just how such a large overshoot in borrowing could occur given the already eye […]

British Pound With weekly earnings coming out at up 5.7% in the 3 months to the end of May compared to the same period a year earlier which is a key indicator for inflation and closely watched by the Bank of England, the feeling in the market yesterday was that the likelihood of a rate […]

US Dollar Broadly the market liked Trump’s nomination, choice of running mate and the growing likelihood of a second term for the ex President. USD strengthened against almost all of the G10 currencies and 10 year bond yields declined. EUR/USD 1.0888. Japanese Yen As is normal practice in Japan the Japanese authorities do not comment […]

UK Growth The UK economy expanded 0.4% in May after 0% growth in April and at double the pace expected. GBP was perky on this, or maybe it was the unusual amount of sunshine on offer yesterday afternoon that lifted the spirits of British pound traders. The reason is that this surprisingly good picture(the growth […]

20 pips Despite significant macro events, FX volatility has taken a nose-dive in recent sessions. For EURUSD, the most heavily traded and directionally influential pair in the market, a range of just 20 pips prevailed through the European and into the US session. This is a currency pair that amongst many other factors yesterday was […]

Carlsberg It was third time lucky for Carlsberg in their bid to capture UK soft drinks firm Britvic which has Robinsons Barley Water, J20 and Fruit Shoots among others in its stable of refreshments. Paying GBP 3.3 billion or EUR 3.9 billion at 1290p per share, this was a significant acquisition for Carlsberg. The reason […]

Second Round The second and final round of the French legislative election took place on Sunday. The results of the election are now clear. However, the consequences of such voting outcomes are still far from known. With a relatively light data calendar for the Eurozone this week ahead of the ECB decision next Thursday, focus […]

US Election Bearing in mind that the CNN poll was taken on July 2 well after the disastrous debate between Trump and Biden but it put Trump ahead at 49% versus Biden at 43%, the subsequent ABC interview with pre-advised questions for President Biden will have done little or more likely will have compounded the […]