SGM-FX insights

Key Week for the UK Market With the Bank of England expected to raise interest rates on Thursday by 75bps, the UK economy is stuttering beneath the weight of the sharpest set of rate rises in 33 years. If that is the correct treatment to crush inflation, it will have been worthwhile is the general […]

European Central Bank   The market’s focus was set firmly on the result of yesterday’s ECB meeting together with the ensuing press conference. Prior to the release the expectation was for a rise of 75 bps which was duly delivered. Italy 10 year Govt Bonds were trading at 220bps above Germany-a significant improvement from where […]

Management 101: UK   In investment banks at least, new management is hardwired upon assuming office to firstly trash their predecessors and then tell everyone just what a mess they have inherited but that things will soon be much better under their leadership. The UK’s (very) new Prime Minister Sunak lost no time yesterday in […]

FX Market Snapshot   With the USD little changed at EUR/USD 0.9860 and GBP opening the week in Asian markets at GBP/USD 1.1360 and GBP/EUR 1.1530, the big story which markets will be focusing on is where USD/JPY 149.05 goes next. Having broken through the psychological barrier of 150 last week, the question is not […]

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 […]