SGM-FX insights

US Treasury Yields Last night with the Dow selling off almost 400 points, the culprit was once again the spectre of still increasing US Treasury Bond yields which have hit fresh highs: 10 years at 4.72% and 30 years at 4.85%. 2 years firmly above 5% at 5.10%. USD firmer too. EUR/USD 1.0450. For Hire […]

The parapet With high US yields and strong US data publications, it is not the time for currencies to stick their head above the parapet. Unfortunately for GBP, the attention that the Prime Minister is drawing to himself, and the conservative party conference, runs the risk of highlighting the political risk associated with GBP. With […]

Surge Pricing Lots recently in the Financial Times and the examples of surge pricing in the price of concert tickets to see top name music artists. Once again and a bit of a theme for today, it’s legendary Group Pink Floyd and its erstwhile leader Roger Waters who is leading the way. To see Pink […]

US Government Treasury Bond Yields With the higher for longer realization dawning on interest rate markets, it is worth looking at where the yields are on US Governments: 3 months 5.40, 2 years 5.12, 5 years 4.70, 10 years 4.63 and 30 years 4.75. That is obviously weighing on the equity markets at present but […]

Which is to blame? With EURUSD continuing to drive lower, it is important to question whether underlying concerns about the Euro or optimistic views amongst US Dollar bulls are responsible for the collapse in the pair. Whilst of course the answer is both, there seems to be an over emphasis within market commentary on the […]

British Pound With GBP back to where it started the year pretty much, there are some stories starting to appear along the lines that while that may be the case, GBP is still up 18% from a year ago following the Truss/Kwarteng mini Budget fall out. That comparison while of course true is not a […]

The only haven The avoidance of a hard landing according to many projections of most economically significant geographies has undoubtedly moderated perceived financial risk. Back when recessions were forecasted and priced in as the base case to follow the interest rate hiking cycle, there was greater financial risk within the system. Despite a more sanguine […]

US Interest Rates Nothing much new over the weekend other than while sifting thought the tea leaves from last week, we found that not one but two members of the FOMC, the rate setting and policy making committee of the Federal Reserve, advocated US interest rates staying higher for longer to crush inflation. Within their […]

GBP While the Bank of England’s decision to pause on raising rates by the narrowest of margins with voting 5-4, that resulted in GBP being sold sharply which reflects the market’s view that while inflation at 6.7% looked better than expected yesterday, the effect of higher oil prices and petrol and diesel at the pumps […]

A revised 2024 The Dollar opens stronger this morning following the Federal Reserve’s decision last night. The decision confirmed interest rates were to stay on hold following this meeting. As we have highlighted following previous decisions, the forward guidance offered by the Chair Jay Powell was once again underwhelming. However, the Dollar’s bid this morning […]

OECD Those fun loving folk at the Organisation for Economic and Cultural Development are at it again by forecasting that the UK will in 2023 stand at the very top of the G7 for….our rate of inflation at 7.2% which is a great deal more than the promised rate by the UK Government for the […]

Dot dot dot With the Federal Reserve’s interest rate decision looming large tomorrow, there is a significant risk that the Fed will fail to communicate sufficiently. Recently Powell and his fellow US rate setters have been reluctant to commit verbally to how they see the outlook for near term interest rates. Simultaneously, they have also […]