SGM-FX insights

Euro   With the European Central Bank making more noise about raising interest rates (to Zero), there is a growing belief that maybe just maybe the long march from EUR/USD 1.22 to its current level of 1.1040 having flirted with 1.08 is now the beginning of a new range of 1.08 to 1.14. However with […]

South Africa: National Student Financial Aid Scheme   Rather a lot of egg on the face of the NSFAS which took financial aid to a whole new level by sending student Sibongile Mani rather more than the ZAR 1,400 or USD 95 that she was expecting. When ZAR 1,400,000 or USD 95,700 landed in her […]

OPEC   Tomorrow OPEC is due to meet to decide on output levels from May onwards. Currently the decision is to raise daily output by 400,000 barrels from April. However the resumption of Ukraine peace talks in Istanbul and gauging the likely demand from the still recovering global economy will be uppermost in the minds […]

ECB President Lagarde   Christine Lagarde of the ECB does not see a risk of stagflation and confirms that the ECB is still seeing an EU growth rate of 2.3% in 2022 despite the negative effects of the Ukraine invasion on the EU economy plus higher energy costs plus further supply chain disruption. EUR/USD 1.0960, […]

US Mortgage Rates   Relevant to all readers is what is happening with US mortgage rates. As of now the average rate on a 30 year mortgage in the USA stands at 4.42% up by 0.26% and which represents the largest 2 week gain in that rate since 2009. The writing is writ large and […]

Faster is Better?   In this case, if you were wondering, these were the words from St Louis Fed President James Bullard calling for the US to raise the Fed Funds rate above 3% by the end of this year. That is much higher than the market consensus of 2.25% to 2.5% never mind the […]

South Africa   Amazon’s Africa HQ is the anchor tenant and therefore a keystone part of the River Club construction project on the confluence of the Black and Liesbeek Rivers near Cape Town in the Western Cape Province. However construction has now been halted as it turns out that the land is sacred to the […]

UK following the Rate Hike   Following the widely expected rise in rates yesterday by the Bank of England, market watchers were sifting through the tea leaves. Ahead of the meeting the Committee was split between raising rates by 0.25% and 0.50%. Once they met however, that became a pretty much unanimous vote for 0.25%. […]

UK   With the UK jobless rate falling to a 2 year low of 3..9% and average weekly earnings rising by 4.8%, a rate rise to 0.75% tomorrow by the Bank of England looks all but certain. GBP/USD 1.3070.   Electric Bentley   Following buoyant 2021 profits of EUR 389 million, Bentley has announced that […]

China and Asian FX   Markets haven’t always known where to look over the past couple of weeks as high volatility has been witnessed across all sectors. USD funding stresses look relatively well contained thanks to swap lines at respective international central banks allowing the demand for Dollars not to spill through to foreign exchange. […]

Hedging: the real world of aviation fuel   Often our clients ask us about hedging their currency exposures and request typical hedging strategies for them to consider. Nowhere is there currently a better example of the consequences of hedging versus not hedging than in the airline world with respect to aviation fuel. Last May British […]

ECB   Faced with the choice of choking off economic recovery or increasing the risk of getting (further) behind the curve, the ECB President, Madame Lagarde has taken the less hard decision of removing economic stimulus measures. Better that than wait for the inflationary effects of Ukraine to feed through further. EUR/USD 1.0985.   Oil […]