SGM-FX insights

Eurozone   The dashboard in the economic control room of the EU at the European Central Bank currently contains a number of red warning lights and markets are yet to wake up to what an 8.9% inflation rate means to the 500 million citizens of the EU given that the ECB is now acknowledged as […]

UK Housing   The famous saying denoting hospitality Mi Casa su Casa as in my house is your house may be going the way of all things due to the UK housing affordability ratio reaching historically oxygen sapping heights. Typically over time 5.5-6 times average disposable household income is the accepted norm for a home […]

75, not out   And no, I’m not talking about the cricket last night, it is of course the hot top of markets at this time: the Federal Reserve. The Federal Open Market Committee delivered yet another 75-basis point hike last night (the second at two consecutive meetings), dragging the target rate to an upper […]

US Federal Reserve   The attractions of a central bank giving forward guidance on interest rate policy were based on predictability amid stable monetary conditions. Now that has all gone out of the window and what is essentially a problem of the central banks’ own making is looming large. The idea is that through Delphic […]

A little sensitive   Last week saw some of the most volatile conditions for the Euro we’ve seen in a long time. During the stronger than expected interest rate hike announced on Thursday the Euro spiked reclaiming recently lost ground versus the US Dollar. However, the fun didn’t last long. During the press conference the […]

US Dollar   Before wading through acres of analyst reports and newsprint about where the mighty USD is headed in the next few months, it is worth in the first place thinking about why the USD is strong. The answer can be distilled down into 3 main reasons which are as follows: 1. Growth potential: […]

Euro   Buffeted would be the best description of the European currency due to the prevailing forces besetting the Euro: the collapse of the Italian government following Mario Draghi’s admittedly expected resignation which prompted a sharp sell-off in Italian Bonds, the resumption of Russian gas supplies to Europe via the Nord Stream pipeline and last […]

Did I leave the gas on?   European markets have been buoyant this week. Sure, all things are relative and in the grand scheme of things the 2+ cent revival in EURUSD does very little to ameliorate the complete collapse of the currency pair over the last year. However, as you know the markets have […]

Markets   NYMEX WTI Oil at $100 on the back of President Biden’s lack of breakthrough on his visit to Saudi Arabia to persuade his hosts to increase production plus a rising interest rate environment suggest that a Recession is more likely. Apple viewed as a good surrogate stock for the overall US corporate scene […]

T+2   In two days’ time, the ECB’s Christine Lagarde will communicate her bank’s latest interest rate decision. She has an unenviable task in presenting the ECB’s response to an impossible task. Here’s why it’s impossible and here’s how it’s already gone wrong before it’s even started.   All central banks are facing a similar […]

Federal Reserve rate hike 27-07-22   Just as the market was bracing itself for a 75bp rate hike on Wednesday week, the inflation figure of 9.1% without a clear sign that that was as high as it was going came out. Cue talk of a 100 basis point increase that would take target Fed Fund […]

Italy   The Italian coalition government is facing collapse due to coalition member the 5 Star movement removing its support yesterday afternoon. That meant that Pm Mario Draghi had to follow the well worn route of all Italian PMs( 10 since 2000 if you are wondering) to the door of the President to ask him […]