SGM-FX insights

75, not out   And no, I’m not talking about the cricket last night, it is of course the hot top of markets at this time: the Federal Reserve. The Federal Open Market Committee delivered yet another 75-basis point hike last night (the second at two consecutive meetings), dragging the target rate to an upper […]

US Federal Reserve   The attractions of a central bank giving forward guidance on interest rate policy were based on predictability amid stable monetary conditions. Now that has all gone out of the window and what is essentially a problem of the central banks’ own making is looming large. The idea is that through Delphic […]

A little sensitive   Last week saw some of the most volatile conditions for the Euro we’ve seen in a long time. During the stronger than expected interest rate hike announced on Thursday the Euro spiked reclaiming recently lost ground versus the US Dollar. However, the fun didn’t last long. During the press conference the […]

US Dollar   Before wading through acres of analyst reports and newsprint about where the mighty USD is headed in the next few months, it is worth in the first place thinking about why the USD is strong. The answer can be distilled down into 3 main reasons which are as follows: 1. Growth potential: […]

Euro   Buffeted would be the best description of the European currency due to the prevailing forces besetting the Euro: the collapse of the Italian government following Mario Draghi’s admittedly expected resignation which prompted a sharp sell-off in Italian Bonds, the resumption of Russian gas supplies to Europe via the Nord Stream pipeline and last […]

Markets   NYMEX WTI Oil at $100 on the back of President Biden’s lack of breakthrough on his visit to Saudi Arabia to persuade his hosts to increase production plus a rising interest rate environment suggest that a Recession is more likely. Apple viewed as a good surrogate stock for the overall US corporate scene […]

T+2   In two days’ time, the ECB’s Christine Lagarde will communicate her bank’s latest interest rate decision. She has an unenviable task in presenting the ECB’s response to an impossible task. Here’s why it’s impossible and here’s how it’s already gone wrong before it’s even started.   All central banks are facing a similar […]

Federal Reserve rate hike 27-07-22   Just as the market was bracing itself for a 75bp rate hike on Wednesday week, the inflation figure of 9.1% without a clear sign that that was as high as it was going came out. Cue talk of a 100 basis point increase that would take target Fed Fund […]

Uber   Back in August 2014 an ambitious ex banker had just been appointed Minister for the Economy in France and his name of course was Emmanuel Macron. Keen to make his mark and seeing Uber as a source of growth and new jobs, Macron invited the founder of Uber, Travis Kalanick in for a […]

US Unemployment   Shock horror: rates go up sharply and then chattering/scribbling market analysts are surprised that unemployment claims rise unexpectedly. That’s exactly what happened yesterday when initial unemployment claims rose to 235,000 for the week to July 2. USD riding high at USD/JPY 135.90.   UK Economy   Post PM resignation(more than enough said […]

Preparing for Parity   EURUSD broke through 1.02 yesterday during a punishing week for the Euro. The path now looks relatively open for a test of parity and most participants expect at least a temporary touch of 1:to:1. Having started the year in the mid-teens in this currency pair, the strengthening of the Dollar over […]

Markets   With the EUR on a 20 year low versus USD at 1.0287 and the Yen also floundering at a 24 year low, the USD is back in vogue with a vengeance as US Treasury 10 Year is now yielding 2.90%. This is what happens when markets fail to be convinced by central bank […]