SGM-FX insights

US Inflation and the US Bond Market   Headlines last week regarding inflation on both sides of the Atlantic and especially so in the USA which saw sharp rises in forecourt gasoline prices and that always spooks consumers. The 30 Year US Treasury Bond yield increased from 1.89% to 1.95% on the week and oil […]

GBP   At the 2021 low yesterday of USD 1.3364, GBP was suffering from being besieged by the twin forces of a surge in US inflation strengthening the view of higher USD rates, plus the release of September UK economic growth of just 0.6%. Given that the Bank of England had nixed higher rates at […]

From floppy disks to cloud sharing   Looking at inflation projections in the UK, forecasts set to exceed 5% may seem unthinkable to many. The global economy has created an unwaveringly low-inflation, low-interest environment over the past two decades leaving today’s inflation forecasts looking like something of an anomaly. With inflation above target but still […]

US Federal Reserve   Rumours of Fed Governor Lael Brainard being interviewed for the top job instead of Jay Powell sent US Treasury yields lower yesterday due to Ms Brainard’s dovish reputation. Normally such a report would unsettle the market and send yields higher, but in this topsy turvy world, the suggestion of a less […]

Value Travel   As Brits approach the end of the year, it is traditional to start thinking about next year’s foreign holiday. There are two drivers, firstly the buying power of GBP and secondly the value for money at the various destinations. Leading the pack for positive exchange rate movement since the start of the […]

UK and the Bank of England   Inevitably, given that the market had collectively decided that a rate hike of 0.15% was a nailed on certainty, when the Monetary Policy Committee met yesterday and concluded that they would leave rates unchanged, GBP sold off sharply. Growth expectations for 2021 and 2022 were cut from 7.25% […]

US Dollar   As the US Federal Reserve got ready for the start of its 2 day policy meeting last night, expectations were for the announcement later this week for the start of tapering of the huge asset purchase scheme at the onset of Covid. This sent the USD a little firmer and the question […]

USA and EU : steel and aluminium dispute resolution   All that rubber chicken over the G20 weekend has shown one positive outcome at least: peace has broken out in Rome and in future the USA will not apply duties and will allow EU steel and aluminium to be imported into the USA duty free […]

US Dollar   Yesterday saw the USD at a weaker level but not markedly so, on the back of Christine Lagarde, President of the European Central Bank making comments after the ECB monthly meeting. The market interpreted Mme Lagarde’s comments as insufficiently doveish- in other words because it was hardwired into the EU and the […]

GBP   Versus the low yielding currencies such as the EUR and Yen, GBP is at a 20 month high which is offering value to GBP sellers versus those currencies. Whether GBP goes higher from here is less certain as there is a suggestion that there is a lack of oxygen at these levels with […]

Batteries   Admittedly not a product that SGM-FX would normally cover, but one that is very much moving to the centre of our market radar screen. Thanks to a series of key patents, China dominates the production of iron based batteries making 95% of the world’s Lithium Iron Phosphate(LFP) batteries. Those patents expire soon and […]

Russian Railways   As a result of the snarl ups in Chinese ports that have already been well reported, Chinese exporters are turning their attention to rail transit for their goods. Normally time and cost would preclude such a move, but both have gone out of the window with shipping containers in the wrong places, […]