SGM-FX insights

Why is GBP weaker this week? Apart from the age old adage of more sellers than buyers it comes down to the UK’s relative economic performance versus other countries. While Germany has grown by an anaemic 0.3% since Q4 2019, the UK has contracted by 0.8%. Contrast that with a different picture in North America: […]

UK Recession – coming, going, gone? Last week’s saga of central bank decisions has already been well analysed and digested. The implications for the policy adjustments made last week have been scrutinised and speculated over. Ultimately none of the central banks that met from the Fed, the ECB and Bank of England, nor any other […]

Japan Big move by the Bank of Japan to adjust the central bank’s yield curve control programme which had a disproportionate effect since it was unexpected. 10 year yields previously capped at 0.25% on Government Bonds will now have a new ceiling of 0.50%. Despite the BoJ’s stating that this does not represent a sea […]

Return of the Letterings Do you remember once the shock and fear of the Coronavirus pandemic had resided in late 2020, attention swung to what the path of the recovery would look like. As a brief recap, the shape of the expected path of economic recovery was often likened to the shape of letters. The […]

Gaucho Hats rather than French Berets Hats off to Argentina on a hugely deserved and thrilling win yesterday over France in the most exciting match of the 2022 World Cup which mesmerised spectators from all nations except for maybe…France. GBP dented Friday was not a good day for the Great British Pound with the currency […]

Central Bank Consensus As expected both the Bank of England and the European Central Bank came in to join the US Federal Reserve with 50bp hikes. Not surprisingly the Bank of England’s Monetary Policy Committee is split 3 ways with outliers voting for either lower or higher rises than what was decided given the high […]

Calling the bluff As expected, the Federal Reserve raised interest rates in the United States yesterday evening by a further 50 basis points. As a result of this policy adjustment, immediate target policy levels now stand at 4.25-4.5%. As also expected, the Fed pushed back fairly hard on the idea that it is ready to […]

Grain and Oilseed Supply pressures will keep prices high into 2023 which are also impacted by the Ukraine war, high energy costs and bad weather in Latin America and South East Asia. While the higher prices will of course encourage farmers to plant more crops, the fact is that inventories need to be replenished from […]

Pencil to pen As with any year ahead, 2023 has been fervently speculated over by market participants. Whilst forecasts for the forthcoming year take great priority every year, 2023 has perhaps the most divergent set of forecasts between analysts and institutions on recent record. Across asset classes and between institutions the core themes expected to […]

UK Credit Rating Fitch have affirmed the UK’s credit rating at AA- citing the quality of the macro economic policy, Sterling’s status as a reserve currency and the deep capital markets of the UK. The outlook is negative but this is timely recognition given the Central Bank meetings taking place this week and also a […]

UK Market Poll The thing about market polls is that they are notoriously unreliable but having said that, it is worth noting where expectations are for the upcoming Bank of England meeting on December 15 as reported by a Reuters poll: Rates up by 50bps taking borrowing costs to 3.50%. This is versus the 11.1% […]

Expensive Furniture At the time of writing at least, ANC leader and South African President Cyril Ramaphosa has managed to hang onto power. When the President found himself at the centre of a South African political scandal, there was a lot of concern and risk surrounding the nation and its assets. International attention was cast […]