SGM-FX insights

UK Growth   GDP contracted by 0.1% in March in a quarter that saw growth grow by a slender 0.8% which was down from growth of 1.3% in Q4 2021 and below the forecast of 1%. GBP/USD dropped to 1.2166, its lowest for 2 years.   The most valuable company in the world   The […]

Blame the Data   Volatility has continued to stretch the foreign exchange market out of its usual ranges. In the case of GBP, the market is evidently heavily short Sterling but until yesterday lacked the optimism to close some of the open positioning or the conviction to drive speculative positions further. The precarious nature of […]

Markets   As we start the week with WTI oil at $110.60, the USD remains very strong at EUR/USD 1.0550 and GBP/USD 1.2280 and GBP/EUR 1.1680. Gold firmer at $1882.   US 10 Year Treasury Bond   Last week the yield reached 3.14% at the same times as the Dow lost 1000 points on Thursday. […]

UK Interest Rates   25bp increase versus the widely expected 50bp rise: a predictable market reaction: GBP smacked. Never mind that the BoE is once again saying they know best and that economic activity is fragile and cannot sustain a 50bp shot. Hopefully this turns out better than the Bank of England inflation is transitory […]

Australia   RBA raising interest rates from 0.10% to 0.35% may not sound like much, but it may be the final nail in the coffin that is incumbent PM Scott Morrison’s hope of re-election as he trails in the polls ahead of the National Election on May 21. In case you have lost sight of […]

Much-awaited May   Almost all central banks have now begun their policy normalisation cycle. The ultra-low yield group most notably including the Eurozone and Japan would have something to say and argue about this, but by and large respective central banks have either signposted their tightening cycle or the market has begun to do it […]

Starbucks   With more than 25,000 outlets worldwide in more than 70 countries, Starbucks has by any stretch of the imagination a thriving business. Have you noticed that when you pay for your coffee it is always a little bit more than the quoted tariff ? No neither had I until yesterday when I was […]

Burger King   As previously reported Burger King is in hot water with advertising standards officers in the USA having overstated the size of its Whopper burger product by up to 30% in advertisements. Undaunted by that spot of bother, Burger King has announced that it is opening 200 new outlets in the UK. Applying […]

UK Sterling   The Pound or GBP looks wobbly now that it has broken the key GBP/USD 1.30 level and has traded below 1.2840. With business and consumer confidence dented and worse than expected retail sales figures, the final straw last week were the hawkish comments from Chairman Powell of the Federal Reserve who warned […]

US Federal Reserve   Chairman Jérome Powell may in some peoples’ views have come to the rate hike party late but he is as of last night a fully paid up member: 50 bps on the cards for the next meeting on May 3/4 and a further 50bps in June. Stand by for (more) talk […]

Downgrade   This week is set to be the week of the growth forecast with several sets of statistics already having had profound impacts on markets. As we noted yesterday, the price of oil and the market’s interest rate expectations have been shifted by the forecasts presented by the IMF on Tuesday. Warnings on growth, […]

US Interest Rates   The IMF has spooked markets by saying that with US inflation at 8.5% the Federal Reserve has not really clarified just how much interest rates may have to rise and those rises will need to be much greater than markets are currently pricing in. GBP/USD 1.3000.   French Presidential Election   […]