SGM-FX insights

Great British Pound GBP has notched up the sharpest recovery for some years and on Friday night was trading at GBP/USD 1.2285 and GBP/EUR 1.1655. Quite a turn around. Before continuing however, it is worth reminding ourselves that in times of such volatility, it is rare for a currency to continue in a straight line […]

Germany Despite the ECB (European Central Bank) releasing a more optimistic outlook for inflation this week, careful Germans unlike their more profligate Southern European neighbours are spending less as they come to terms with much higher energy bills and much more expensive food costs. The Germans are also more worried about their personal finances than […]

Short covering   Evidence from the CME provides an interesting qualification to the CFTC positioning data that GBP investors have been watching closely. For many years now, markets have held a net short position on GBP, fluctuating from more neutral grounds through to a heavy focus upon achieving selling conviction behind the Pound at times. […]

UK Employment Unpacked   As well reported the ONS yesterday announced that those in employment declined by 52,000 in the past 3 months and the number of vacancies stands at 1.23 million. Unemployment declined by 0.2% and is at the historically low figure of 3.6%. The conclusion is that very few people seeking work are […]

The Hunt is on: UK Budget and the Global Population   The Autumn budget is drawing closer with Jeremy Hunt, Chancellor of the Exchequer within Rishi Sunak’s government, due to announce the measures to the House of Commons on Thursday. Sterling had a rocky start to the week yesterday with major crosses falling as the […]

Start the Week: Markets   As we begin the week, here are the key indicators that are flashing up on the currency dashboard: 2 Year Government Bond Yields in the US 4.33%, UK 3.12% and Germany 2.14%. Gold $1,771. NYMEX WTI Oil $92.61. EUR/USD 1.0350, GBP/USD 1.1835 and GBP/EUR 1.1430. USD/JPY 138.80.   US Equity […]

US Inflation   When the news came out of a lower than expected monthly CPI figure yesterday afternoon at 0.4% up versus the expected 0.60%, the market went mad sending Equities up and USD down sharply. That means that annual inflation is up 7.7% and so below 8% for the first time since the inflation […]

US CPI   The risk-on mood that kicked off the week has slowly deteriorated, providing a reality check for currencies including those in the EM basket and GBP. Initial optimism surrounding China’s zero-covid potential policy adjustment and the passing of two key central bank risk events last week had supported currencies that have typically suffered […]

UK Food   With food price inflation of 14.7% from a year ago, it is clear that UK food buying habits are changing: Aldi and Lidl together now have a market share of 16.4%. That means two things: firstly shoppers are cannier and are seeking cheaper brands as that figure in 2008 stood at 4.4%; […]

USD risk   The hawkish narrative that the Federal Reserve delivered in its latest press conference has been well covered. Jay Powell’s divergence from how the market perceived the peak of US interest rates has provided an element of support to the US Dollar. We can say with conviction that at least in the hours […]

UK Pound   As we start the week GBP is holding up in early trading in Asia Pacific but given the number of commentators writing bearish articles on the likely path of GBP, it will not be a surprise to see GBP lower as we get into the week from its current levels of GBP/USD […]

Bank of England   Yesterday’s meeting and subsequent release was the BoE’s biggest outing of the year in the wake of Trussonomics, the Gilt market meltdown and last but not least inflation at over 10% the highest for 40 years. If it had not been for the spotlight being shone on the events in the […]