SGM-FX insights

UK   While widely anticipated, the new vacancy at 10 Downing Street for a third Prime Minister in 2 months left both the FX and Gilt markets relatively unchanged. That was due more to bemusement at the prospect of the Conservative Party even contemplating bringing back Boris Johnson. Consulting the bookmakers, Rishi Sunak is evens, […]

Market Ranges   Following up on what we wrote on Monday about how the wholesale markets are experiencing much larger and faster movements than many people are accustomed to, GBP/USD yesterday traded a range of more than 1.5 cents; GBP/EUR a range of 1.25 cents and so on. Part of this is because of the […]

Global Markets   With 10 Year US Treasury Bonds yielding 4.02, Gold at $1640 and NYMEX Oil at $85.60, the stage is set for another pivotal week in world markets. UK readers might be forgiven given the blanket coverage on all things Downing Street related for thinking that the rest of the world is simply […]

UK Pound   Given its travails in the past weeks, it is refreshing to be able to report that GBP had a better day yesterday and is now trading at GBP/USD 1.1320 and GBP/EUR 1.1570. This was on the back of markets sensing a government u turn on the mini budget statement of Friday 23-09-22 […]

UK Government Bond Market   The market is a GBP 2.1 Trillion government bond market and therefore significant enough to attract attention. Nevertheless it is a mature market overseen by the hugely respected Bank of England. Yesterday BoE buying of securities was extended to include Inflation Linked Bonds and this morning it is reported that […]

An interesting conditionality   The markets have been following the meteoric rise in USDJPY closely. It is perceived as one of the key currency pairs out there that provides a multitude of wider signals about respective financial conditions in addition to its primary function of measuring clearing prices between the two constituent currencies. As one […]

Canada   In the past few weeks, Canada has been partially overlooked given the domestic focus on the USA and the economic implications for the rest of the world. Canada in many ways is a study worth making: inflation as at August of 7% with core inflation of 5%, the Bank of Canada has raised […]

USA   Unemployment claims up 29,000 and higher than expected started the wobble which was then compounded by a Federal Reserve Governor stating that despite the labour market self evidently cooling, there was no prospect of there being a respite in the rate rising agenda. WTI oil at $88.24 due to the much larger cut […]

Strong Dollar Consequences   Since the 2011 low, USD is up 40% versus a broad set of trading currencies. While this is mostly good for the USA, it is less so for the countries and regions of some of those other currencies. For example the EUR is suffering from a much weaker exchange rate at […]

Markets Start to the Week   After the roiling bond markets last week we start the new week with 10 Year government bond yields as follows: US 3.82, Germany 2.12, Japan 0.24 and UK 4.08. Nymex WTI $79.70 and Gold $1659. EUR/USD 0.98. With OPEC+ mulling a cut in oil production of more than 1 […]

Oil   Hurricane Ian disrupting Gulf of Mexico output, economic expectations changing intraday, interest rate expectations equally volatile and for good measure a fourth gas leak in the Nordstream pipelines has been identified: yesterday in this land of new normal was just another day in the global oil market with NYMEX WTI now at $81.50. […]

The UK Pound-GBP   Profit taking in the rampant USD yesterday meant that JPY and GBP were given some initial respite from the pounding that they took on Monday. It transpires that part of the reaction to still new(ish) UK Chancellor, Kwasi Kwarteng’s not so mini budget was due to the market having been long […]