SGM-FX insights

There’s tightening and there’s quantitative tightening   Pre-2008 financial crisis quantitative easing (QE) wasn’t a particularly familiar tool, nor was it particularly common knowledge outside the realm of central banking. However, when it became clear in the midst of the Great Recession that ever lower interest rates just weren’t going to cut it, quantitative easing […]

The bleak mid-winter..   ..Might be about to get a little less bleak. The phases of threat and subsequent remedy have continued to play out in this rather troublesome past year. The threat of inflation, whilst written off as a passing phenomena, eventually received its antidote of monetary policy adjustment. So too now is the […]

Oil   Go back to the 1970’s and the fear was that oil would run out. In 1965 32 million barrels of oil were pumped every day. By 2018 that had risen to 95 million. In 1980 there was reported to be 684 billion barrels of oil still to be pumped out of the ground […]

Great British Pound   Was it because desk heads and trading bosses were on their summer holidays at the end of last week? No it was not: the UK is borrowing too much GBP 55 billion for the year 2022-2023 which is GBP 3 billion more than forecast. Retail sales are up 2.3% from pre […]

US Labour Market   With jobless claims of 270,000-300,000 pundits are fully agreed that at that level the US labour market is signalling a recession. The thing is that jobless claims are consistently well below that and again this week have come in at 250,000 so the labour market is not pointing to a US […]

Surviving the minutes   The US Dollar has so far survived the release of the meeting minutes of the Federal Reserve’s latest monetary policy decision. As we have discussed recently, the million Pound question in markets at the moment is when will the Federal Reserve and other key central banks reach the peak point of […]

China Rate Cut   Yesterday Charles Porter wrote about how China is bucking the trend and cutting rather than raising rates. Before your eyes glaze over at the prospect of further China comment from us at SGM-FX and you look away, this is why the PBC or Peoples Bank of China cutting the medium term […]

Wrong direction   Virtually the entire world is hiking interest rates in a bid to combat inflation in their economies. If you plot the action of central banks so far this year on a world map two areas stand out as exceptions. A handful of countries in central Africa who have either held constant or […]

Next UK Prime Minister.   While we really tried hard not to write about the contest gripping(?) Britain, this particular survey out last night was just too good to pass up with Liz Truss well ahead of her rival with a 22 point lead: the Conservative Party-and it is them who get to decide-when asked […]

Fizz with Liz   Among the plethora of vague and less vague but scarcely deliverable vote catching statements is the one from Liz Truss, leading Conservative candidate in the UK Prime Minister stakes, that promises to look at the role of the Bank of England; the market while somewhat mentally on a sunbed in the […]

CPI rollercoaster   Pointing out the heightened sensitivity of markets to data recently was if anything an understatement. Yesterday, prices fluctuated wildly following the release of inflation data in the United States. By way of an early reminder, similarly salient data is due out in the UK later this week and early next. Inflation data […]

UK Retail Sales   Up 2.3% in July breaking the previous 3 month down trend due to purchases of summer clothes, picnic equipment and electric fans to cool consumers down. The last category could usefully be directed towards inflation which now stands at 9.4%. GBP/USD 1.2110.   Spain   As some of our readers will […]