SGM-FX insights

UK Sterling   The Pound or GBP looks wobbly now that it has broken the key GBP/USD 1.30 level and has traded below 1.2840. With business and consumer confidence dented and worse than expected retail sales figures, the final straw last week were the hawkish comments from Chairman Powell of the Federal Reserve who warned […]

US Federal Reserve   Chairman Jérome Powell may in some peoples’ views have come to the rate hike party late but he is as of last night a fully paid up member: 50 bps on the cards for the next meeting on May 3/4 and a further 50bps in June. Stand by for (more) talk […]

Downgrade   This week is set to be the week of the growth forecast with several sets of statistics already having had profound impacts on markets. As we noted yesterday, the price of oil and the market’s interest rate expectations have been shifted by the forecasts presented by the IMF on Tuesday. Warnings on growth, […]

US Interest Rates   The IMF has spooked markets by saying that with US inflation at 8.5% the Federal Reserve has not really clarified just how much interest rates may have to rise and those rises will need to be much greater than markets are currently pricing in. GBP/USD 1.3000.   French Presidential Election   […]

Low Carbon Hydrogen Get ready for hearing lots about how this is the way forward for the UK’s energy strategy and how by 2050 more than 35% of our energy needs will be met by hydrogen. Listen carefully however and you might (just) hear that currently virtually none of our energy needs are derived from […]

War Crimes   We wrote recently about how the residual risk that remained priced within (FX) markets was increasingly being removed from positioning data. Despite broad doubts about the credibility of claims of progress in Russia-Ukraine peace talks, the market scaled back demand for safe-haven FX, finding comfort in more moderate wholesale energy prices and […]

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 […]