SGM-FX insights

Bank of England Governor Bailey more optimistic about both inflation falling and also interest rates peaking at a lower level. The Delphic language normally favoured by Central Bankers was not deployed yesterday when the Governor saw no reason to correct the market in its assumption that 4.5% would be a ceiling for interest rates. Not […]

Room for new funding Despite the decision by the Bank of Japan to keep monetary policy all but unchanged, the market is still clinging to the prospect of monetary adjustment in the periods ahead. Following the initial reaction in USDJPY in the early hours of the morning, the remainder of yesterday’s trading session saw the […]

Oil Expectations of further relaxation of China’s Lock down policy evidenced by the vast numbers of people permitted to travel for the Lunar New Year celebrations were sufficient to drive up NYMEX WTI oil up to $81.20 on optimism that China is close(r) to re-opening fully for business. Great British Pound GBP firmer versus both […]

Martin Luther King Day With the USA off today and bond and equity markets closed, the world’s business elite are in Davos, Switzerland meeting and schmoozing. The big difference this time at Davos will be the complete absence of Russian billionaires. While markets may be quiet as a result of the US holiday, it is […]

US Inflation Good news for the market in that expectations were for an unchanged inflation rate and in fact it declined 0.1% in December. So that means for the 12 months to end December inflation was at 6.5% having been 7.1% for the year to end November. Less good news however for USD which weakened […]

Labour Before you panic, this briefing is about the economic aggregate of labour, not the UK political party. Whilst that may mean this briefing is a little less controversial than it otherwise may be, it will be more far reaching. Labour factors and the labour market in general have served a supporting role to monetary […]

Federal Reserve A few weeks ago the hawkish anti inflation comments made last night by Chairman Powell would have spooked markets, but in the new year a commitment to fighting inflation and implicitly therefore raising interest rates further for longer has been well received in the markets. Not even JPMorgan’s Jamie Dimon calling the top […]

Chun Yun Saturday marked the start of the largest annual human migration when the Lunar New Year kicked off in China. This surge in travel numbers in China will be watched especially carefully given the consequences for the world at the start of the Covid-19 pandemic 3 long years ago. USD/CNY 6.8370. UK Demographics Uncovered […]

Employment News The fact that the world’s 11th largest employer, Amazon has announced that it will lay off 18,000 workers was excitably reported, analysed and discussed at length yesterday. Given that Amazon employs 1.5 million, while not a matter of no consequence for the 18,000, the fact remains that it represents 1.2% of the workforce. […]

Is a weak PM what the country needs? I’ll agree with you, the title of this daily briefing sounded more daily mail in style than I’m typically comfortable with. But the more I consider the question the more it makes sense. Boris was condemned by scandal, not policy. It was party gate not the substance […]

Gold In the past 12 years Central Bank Quarterly purchases of gold have ranged between 100 and 200 tonnes -except for a couple of blips. But in Q3 2022 it blew out to 400 tonnes. Another blip or a trend? Before answering that, it is the single biggest quarter for Central bank purchases of gold […]

Two-way traffic resumes As 2023 begins there is an increasing sense of normalisation within currency flows. For the latter half of 2022 there were very few plays other than trades orientated towards gaining exposure to the Federal Reserve’s astronomic interest rate adjustments. Whilst allowing the US Dollar to rally, this also left ultra-low yielding currencies […]