SGM-FX insights

Grain and Oilseed Supply pressures will keep prices high into 2023 which are also impacted by the Ukraine war, high energy costs and bad weather in Latin America and South East Asia. While the higher prices will of course encourage farmers to plant more crops, the fact is that inventories need to be replenished from […]

UK Credit Rating Fitch have affirmed the UK’s credit rating at AA- citing the quality of the macro economic policy, Sterling’s status as a reserve currency and the deep capital markets of the UK. The outlook is negative but this is timely recognition given the Central Bank meetings taking place this week and also a […]

UK Market Poll The thing about market polls is that they are notoriously unreliable but having said that, it is worth noting where expectations are for the upcoming Bank of England meeting on December 15 as reported by a Reuters poll: Rates up by 50bps taking borrowing costs to 3.50%. This is versus the 11.1% […]

Australia With the Reserve Bank of Australia (RBA) raising AUD interest rates to 3.1% which is a 10 year high, it has thrown the GBP/AUD rate back into the spotlight. Trading lower at AUD1.8185, nevertheless GBP remains at its highest level since March 2022 and still represents value-the range has been pretty much 1.80-1.90 for […]

Great British Pound GBP has notched up the sharpest recovery for some years and on Friday night was trading at GBP/USD 1.2285 and GBP/EUR 1.1655. Quite a turn around. Before continuing however, it is worth reminding ourselves that in times of such volatility, it is rare for a currency to continue in a straight line […]

Germany Despite the ECB (European Central Bank) releasing a more optimistic outlook for inflation this week, careful Germans unlike their more profligate Southern European neighbours are spending less as they come to terms with much higher energy bills and much more expensive food costs. The Germans are also more worried about their personal finances than […]

UK Employment Unpacked   As well reported the ONS yesterday announced that those in employment declined by 52,000 in the past 3 months and the number of vacancies stands at 1.23 million. Unemployment declined by 0.2% and is at the historically low figure of 3.6%. The conclusion is that very few people seeking work are […]

Start the Week: Markets   As we begin the week, here are the key indicators that are flashing up on the currency dashboard: 2 Year Government Bond Yields in the US 4.33%, UK 3.12% and Germany 2.14%. Gold $1,771. NYMEX WTI Oil $92.61. EUR/USD 1.0350, GBP/USD 1.1835 and GBP/EUR 1.1430. USD/JPY 138.80.   US Equity […]

US Inflation   When the news came out of a lower than expected monthly CPI figure yesterday afternoon at 0.4% up versus the expected 0.60%, the market went mad sending Equities up and USD down sharply. That means that annual inflation is up 7.7% and so below 8% for the first time since the inflation […]

UK Food   With food price inflation of 14.7% from a year ago, it is clear that UK food buying habits are changing: Aldi and Lidl together now have a market share of 16.4%. That means two things: firstly shoppers are cannier and are seeking cheaper brands as that figure in 2008 stood at 4.4%; […]

UK Pound   As we start the week GBP is holding up in early trading in Asia Pacific but given the number of commentators writing bearish articles on the likely path of GBP, it will not be a surprise to see GBP lower as we get into the week from its current levels of GBP/USD […]

Bank of England   Yesterday’s meeting and subsequent release was the BoE’s biggest outing of the year in the wake of Trussonomics, the Gilt market meltdown and last but not least inflation at over 10% the highest for 40 years. If it had not been for the spotlight being shone on the events in the […]