SGM-FX insights

Another week, another level   We discussed the implied yield curve last week with a promise to take a look back at how the market pricing has evolved in subsequent trading sessions. There was particular note taken of the potential impact that the Bank of England’s decision on Thursday could provide to the market and […]

A new perspective on market volatility required   Many acres written this past weekend on Central Bank intervention and in particular about the Federal Reserve and the new UK government’s economic stimuli to the UK economy. A consistent theme was the sheer magnitude of last week’s moves: eg UK 5 year Gilts moving 50bps which […]

UK Economy   With the new Chancellor set to unveil a boom targeted package of measures later today in a mini budget reminiscent of Tony Barber’s 1972 Boom Budget (as we were reminded by one of our most longstanding clients), the backdrop is one of yesterday’s 50 basis point rise in interest rates to 2.25%, […]

Where are UK interest rates going?   The bank holiday weekend continued to provide reason for markets to price a runaway Bank of England. Come market open on Tuesday, the positioning calling for an over-sized hike from the central bank grew, with rate expectations advancing across the curve. As well as developing interest rate expectations […]

US Dollar   Back off the heights it reached at the end of last week USD is marking time ahead of tonight’s interest rate decision by the Federal Reserve. The question of whether it is 75bps or 100bps means that if it is 75bps, the likelihood is that the USD will weaken further since that […]

A big week   Following this heading I should probably note that the adjectives ‘big’ and ‘good’ might perhaps be more separated in our minds by the time Friday’s market close passes. A Bank of England decision scheduled for last week was postponed whilst the country was in mourning. It is now due to take […]

Oil   With WTI lower at $88.90 a barrel, the question is whether the price returns to what the oil market has described as the floor of $100 post the recent wobble on the global economy or whether that wobble turns into further weakening of the oil price predicated by the need for further tough […]

Rand   Volatility has been a feature of markets mid-2022 to date. Once the realisation finally struck that inflation was not transitory after all and the implications of Russia’s invasion of Ukraine became apparent assets that remained stable in value or price were few and far between. In a world characterised by such widespread inflation, […]

Employment Barometer   If the health of an economy is best reflected in employment figures, then the most sensitive indicator must be that of the hiring/firing policy of a global investment bank. Yesterday reports surfaced of Goldman Sachs potentially laying off hundreds of staff following a downturn in deal making activity and a fall of […]

Every gas cloud   …has a silver lining. Perhaps. To start with a reminder of currency dynamics. Terms of trade has always been a highly influential factor behind currency valuations. Typically, over the medium term (normally measured in low digit years) it is the only reliable indicator of a currency’s performance over another. Terms of […]

British Pound   Famed for his big calls on the US Treasury Bond market, ex Pimco guru Bill Gross has come out over the weekend with a case for GBP recovering in a scenario where the USD has become over valued and GBP, having depreciated by 14% is now under valued. Other forecasts have set […]

HM Queen Elizabeth ll 1926-2022- Rest In Peace.   With our great thanks, great affection and huge respect to Her Late Majesty Queen Elizabeth ll for a long life well lived, and for her unfailing duty in service of our nation.   EU   The ECB increased its key lending rate by 75BPs which, while […]