SGM-FX insights

US Economy The greatest risks to the US economy in 2024 at least according to 1200 US business leaders polled last week are in order as follows: Recession, Inflation and Interest Rates. Nothing unexpected there. However tacked on to the end was the fourth greatest risk at least to domestic US corporate chiefs, although outside […]

Does Iowa affect the Dollar? By Iowa I of course mean the events in the Republican nomination race that have dominated business, political and financial news flows overnight. The polls and pundits had far from ruled out Trump as the Republican candidate for the race to the White House. However, the margin by which Trump […]

Shanghai Containerised Freight Index Instinctively one would expect that freight costs have increased and probably quite a lot since October 7 and the outset of the war in Israel. With Friday’s sharp rise in the SCFI due to the US/UK actions against the Houthis, the Index stands at $3100. That translates as the cost of shipping […]

US Inflation In the end the much anticipated December US inflation figure yesterday came in at 3.4% versus the 3.2% expected and the November 3.1%. While that may not look like much of a difference, it is a signal that is unwelcome in the market especially when core inflation is only just below 4% at […]

Hello again With the festivities now having passed us by, a defining feature of 2023 markets is set to return in earnest. Aside from the non-farm payroll show that must always go on, the data calendar almost ceased over the Christmas period. For those interested in the above statistic released on the first Friday of […]

European Central Bank and British Pound Markets have fully discounted a rate cut of 25bps in EUR rates by April. Conversely the expectation is for the Bank of England to cut UK interest rates by 25bps in June with a 75% chance of that cut being brought forward to May. As it stands, the current […]

A risk to cable The sequencing of rate cuts will be a huge driver of FX pricing this year. As we saw several years ago as we approached this latest hiking cycle in the face of rising inflation, those central banks swift to raise rates were at best rewarded and at least spared the slings […]

US Interest Rates As we begin the first full business week of 2024, let’s recap on where we reached on interest rate reduction expectations for 2024 before the start of the Christmas break: 6 cuts were predicted. Then there was an early New Year wobble that saw markets sell off and those 6 became 3 […]

UK report card as at end of 2023 As we embark on a new calendar year, it is timely to take a snapshot of where the UK stands economically and also where it is versus other G7 countries.InflationUK 3.9% versus EU at 3.1% and USA 2.1%Interest ratesUK 5.25% versus EU at 4.50% and USA 5.50%Growth […]

Wait a minute(s) If mid-December isn’t far too long ago to recall following the festivities, you will remember the Federal Reserve’s decision as the catalyst for the latest leg lower in the Dollar. This was largely because the market saw the Fed blink in both its rhetoric and projection surrounding rate cuts and the need […]

US Equity Winners and the USD in 2023 By some distance the Nasdaq finished the year a big winner in 43%; the S&P managed a gain of 24% and the Dow up 14%. Despite many if not most commentators (but not SGM-FX) calling the demise of the Dollar in 2023, it finished the year down […]

Say Squeeze Happy New Year to you all. With this, the first trading session of 2024, I thought it important to look at an element of potentially complacent pricing that had endured the final trading sessions of 2023. The risk that is presenting itself within EURUSD could be one of the first misallocations to be […]