SGM-FX insights

UK House Prices   When UK house prices rise and the chattering classes regularly re-calculate the value of the equity in their homes while they scan the pages of the weekend property press, that fascination is often described as middle class porn. Well the stats yesterday consigned that top shelf material to the bin as […]

Yields tumble as fiscal progress is claimed   Having taken immediate action to reverse those promised taxation adjustments that had not yet taken effect or had not yet been passed by Parliament, Chancellor Jeremy Hunt still faces a huge challenge in restoring confidence to UK public finances. Measures that have been reversed include the cut […]

Key Week for the UK Market With the Bank of England expected to raise interest rates on Thursday by 75bps, the UK economy is stuttering beneath the weight of the sharpest set of rate rises in 33 years. If that is the correct treatment to crush inflation, it will have been worthwhile is the general […]

European Central Bank   The market’s focus was set firmly on the result of yesterday’s ECB meeting together with the ensuing press conference. Prior to the release the expectation was for a rise of 75 bps which was duly delivered. Italy 10 year Govt Bonds were trading at 220bps above Germany-a significant improvement from where […]

Budget delay   Following Rishi Sunak’s first full day in office yesterday there is an emerging feeling of relative calm within UK assets. The bond market appears to have been the driver of many wider asset flows with global yields falling as debt investor confidence begins to return. In the UK, yields, particularly on very […]

Management 101: UK   In investment banks at least, new management is hardwired upon assuming office to firstly trash their predecessors and then tell everyone just what a mess they have inherited but that things will soon be much better under their leadership. The UK’s (very) new Prime Minister Sunak lost no time yesterday in […]

Second time lucky Sunak   It may be second time lucky for incoming Prime Minister Rishi Sunak, but the wait from his first attempt wasn’t too long to endure. Following the withdrawal of leadership race competitor, Penny Mordaunt, he will be appointed as the UK’s youngest modern era PM by King Charles later today. As […]

FX Market Snapshot   With the USD little changed at EUR/USD 0.9860 and GBP opening the week in Asian markets at GBP/USD 1.1360 and GBP/EUR 1.1530, the big story which markets will be focusing on is where USD/JPY 149.05 goes next. Having broken through the psychological barrier of 150 last week, the question is not […]

UK   While widely anticipated, the new vacancy at 10 Downing Street for a third Prime Minister in 2 months left both the FX and Gilt markets relatively unchanged. That was due more to bemusement at the prospect of the Conservative Party even contemplating bringing back Boris Johnson. Consulting the bookmakers, Rishi Sunak is evens, […]

A new stability?   Four chancellors in four months. Even if you had not been paying attention to the comings and goings of UK politics, that statistic should ring alarm bells. The UK gained its fourth chancellor in as many months last week in the form of Jeremy Hunt following the ousting of Kwasi Kwarteng […]

Market Ranges   Following up on what we wrote on Monday about how the wholesale markets are experiencing much larger and faster movements than many people are accustomed to, GBP/USD yesterday traded a range of more than 1.5 cents; GBP/EUR a range of 1.25 cents and so on. Part of this is because of the […]

20th Party Congress   This week, considerable risks will flow into global markets from Asia. The epicentre of these risks will likely come from China as the ruling Communist Party holds its latest conference. China has played its role in global economic and foreign policy events over recent weeks and months. However, it’s role in […]