SGM-FX insights

UK Retail Sales Sluggish July sales due to bad weather and caution caused by poor inflation figures meant that while an increase of 1.5% versus July one year ago was recorded, in real terms after allowing for inflation, that represented a fall. While this may have been an excuse to sell GBP, in fact looking […]

Positioning At least within the G10 space, there has been a lack of conviction behind FX positioning of late. In line with the elevated levels of volatility that we have been seeing, the volume of contracts outstanding and positioning within major FX pairings has been underwhelming. However, as central banks now begin to curtail their […]

Germany : Slowcession. The Germans have form when it comes to coining words and phrases to capture whatever is current at the time. In 2023 it is “slowcession” which is the no-man’s land between slow growth in the economy and a recession. Germany is currently laboring under annualised 6.2% inflation versus 5.3% across the Eurozone. […]

UK Interest Rates As expected by 66% of economists polled, the Bank of England duly raised rates by 25bps; 34% anticipated a more draconian 50bp rise. Little or nothing is written these days about the Governor of the Bank of England being required to write to the Chancellor of the Exchequer to explain when the […]

This week’s only just begun. Despite summer trading conditions very much taking hold of markets, there has been sufficient data and enough market-sensitive headlines to move some spot FX markets. For example, the data observing the German labour market this week provided sufficient doubt to question some of the Euro’s recent declines and relieve some […]

UK House Prices Much being made of the fact that UK house prices have fallen 3.8% in the year to July. More seasoned commentators are doubtless thinking that firstly it is surprising for now at least that they have not fallen further, and secondly that they will have further to fall as the multiple interest […]

What if economics doesn’t work? Forgive another briefing on interest rates. However, as part of our offering as your eyes and ears on the FX market, it’s important we bring you coverage on those topics dominating market discourse. Unfortunately, those not too fond of monetary policy and economics might find the market’s latest fixation on […]

UK Interest Rates A big week for the Monetary Policy Committee at the Bank of England which will meet and pronounce this Thursday: while the general expectation is for a rise of 25bps, there are plenty of hardliners who are calling for a draconian 50bp rise and of course there are still the doves who […]

European Central Bank Yesterday’s decision by the ECB to raise rates by 25bps was no surprise, but the closely watched language around the announcement did gain the attention of market watchers. Casting our minds back to the seemingly long ago June ECB meeting, the language then was around more interest rate rises required in subsequent […]

Fed up, ECB up? Despite last night’s Federal Reserve decision still ringing in the ears of markets this morning, there will be little respite. With the ECB decision only a few hours away, markets will remain attentive. Summer trading conditions have hampered volatility but this could show signs of stress should any surprises be concluded […]

UK Cost of Government Debt For 2022 the UK has achieved the dubious distinction of being the leading developed nation when it comes to the costs of servicing its debt at GBP 110 billion or 10.4% of government revenues. To give an idea of the perils of group think on boom bust and by implication […]

Another datum, another dive We are entering the phase where politicians are obscuring their eyes behind their palms, but central bankers begin to sweat a little less. ECON101 will tell you that monetary policy is faster than fiscal policy to have an impact on the economy, but you’ll never find someone boasting about how reactive […]