SGM-FX insights

Swiss Roll   The Swiss Central Bank managed to shock markets that were widely expecting a rate increase from the UK’s Bank of England but not from Zürich yesterday. The 25bp UK rise having been expected meant GBP weakened by half a cent but the real action came when the Swiss reduced their rates from […]

Central bank mania   Heading into this week, markets had already braced for raised volatility in expectation of two key and much awaited central bank meetings. Those two central banks that were scheduled to meet were the Bank of England and the Federal Reserve. As you will recall, there has been a theme this year […]

British Pound   Already battered as we wrote earlier in the week, GBP came under renewed pressure yesterday from a stronger USD on the back of high US inflation numbers which gave rise to growing expectations of a more aggressive Federal Reserve response in the shape of an early 0.75% interest rate rise. This was further […]

Four Day Working Week   Beware of statistics: the rise in the number of 4 days a week jobs in the UK has risen by 90% post the Covid pandemic. But from a very low base. The jobs quoted are predominantly in the charity, hospitality and sales and distribution sectors which given the nature of […]

ECB   ECB President Mme Lagarde (finally) promised to acknowledge the rising cost of living led by food and energy prices by saying yesterday that the ECB was now minded to raise interest rates higher than was expected for the first time for 10 years citing higher inflation and lower growth expectations.   US Battery […]

Markets   US 10 Year Treasury now back just over the psychological 3% mark, USD strong on the back of that EUR/USD 1.0670. Japanese Yen at a 20 year low USD/JPY 132.80. Australia raised interest rates yesterday by 0.50 in a surprise move and indicated that a steep path of further increases lies ahead from […]

No Confidence   Following two days of bank holiday and a weekend, Sterling markets opened yesterday to the prospect of a vote of no confidence in the UK Prime Minister Boris Johnson. Having received a sufficient number of letters expressing no-confidence in the Prime Minister, the Chair of the 1922 committee announced the forthcoming vote. […]

Bye Bye Kuna   In case you missed it 2023 holidaymakers in Croatia look like being able to use EUR rather than Kuna. EUR/HRK 7.53 as the EU looks like rubber stamping  Croatia’s inclusion as the 20th currency in EUR from 1 January 2023. Croatia will be the poorest of the EUR countries with a […]

QT or Quantatative Tightening   This is the technical term for the Federal Reserve reducing its $9 trillion balance sheet of Treasury Bonds by allowing bonds to mature and not replacing them. That process starts today and the implications are both uncertain and will be carefully watched. The last time the world’s single largest holder […]

World Wheat   Funnily enough while Ukraine’s wheat exports have fallen 32% and 20 million tonnes lie rotting in grain silos, Russian wheat exports are up 18% and the Russian Treasury has benefitted to the tune of $1.9 billion in extra wheat taxes. Russia has overtaken both Canada and the USA as the world’s largest wheat […]

China Property Market   Since property is such a key driver of the Chinese economy, the West is beginning to pay increasing attention to what has been a continually weakening market which has been beset with firstly Covid and secondly problems at one of China’s largest developers, Evergrande. To counteract this weakening, more than 100 cities […]

Argentina   Weary and bored of Partygate and Westminster rules for us but not them? Never fear here is another tale from the other end of the world: President Fernandez of Argentina has also been found guilty of partying during lockdown. Appropriately enough for a country that defaulted on its debt for the 9th time […]