SGM-FX insights

USDJPY   The value of the US Dollar rose sharply against the Japanese Yen in 2021. The broad and sustained rally saw the Japanese Yen lose approximately 12% versus the greenback last year. The sell off was significant enough to not only reverse the gains made in 2020, but to push USDJPY to five-year highs. […]

Thanks, but no thanks!   Moving into last night’s Federal Reserve decision, markets were expecting to see rates unchanged but were closely looking at where the board thought interest rates would be in the year(s) to come. Market expectations had rather neatly convened around 2 whole rate hikes in 2022 with similar expectations for 2023. […]

No Brain-ard?   Having previously looked shoo-in to spend another term as chair of the Federal Reserve, the bookies had been losing faith in Jay Powell and his ability to achieve re-nomination from President Biden. The President who is responsible for appointing the head of the monetary authority faced a challenging decision. Either continue with […]

A little can be a lot!   The big upside surprise to US inflation last week affected US currency, fixed income, and equity valuations. The market disturbance created by rising price pressures in the real economy was widespread and significant. In addition to the displacement in financial markets already, there is a high probability of […]

US Inflation and the US Bond Market   Headlines last week regarding inflation on both sides of the Atlantic and especially so in the USA which saw sharp rises in forecourt gasoline prices and that always spooks consumers. The 30 Year US Treasury Bond yield increased from 1.89% to 1.95% on the week and oil […]

From floppy disks to cloud sharing   Looking at inflation projections in the UK, forecasts set to exceed 5% may seem unthinkable to many. The global economy has created an unwaveringly low-inflation, low-interest environment over the past two decades leaving today’s inflation forecasts looking like something of an anomaly. With inflation above target but still […]

Antipodean Re-shuffle?   The Aussie Dollar (AUD) and the Kiwi Dollar (NZD) usually exhibit a fair degree of positive correlation. Their economies share similar characteristics and more importantly are relatively integrated to allow forces in one economy to spill over into the other. There are differentiating factors of course most notably the fact that Australia’s […]

Aussie down a cent   The Reserve Bank of Australia (RBA) published its latest monetary policy decision overnight. The concept of buy the rumour sell the news is not new in markets. It refers to the idea of market forces driving up (or down) the price of an asset in anticipation of a future event. […]

The Paradox of Intervention   The US Dollar is on the rise. Of the 22 EURUSD trading sessions in September, 15 saw the US Dollar gain ground on the Euro. Overall, last month, the aggregate price move was approximately 2% in the favour of the greenback versus the Euro. In itself, the changing valuation of […]

US Dollar   Big move yesterday as the Dollar index rose to 93.67 its highest for a month on the back of rising US Treasury Bond Yields which saw the 10 Year go to 1.5270%. Breaching that 1.50% level is a psychological level that jolted currency markets and GBP had a range of 2 cents […]

Cashing in or checking out?   Controversy has been building within the Federal Reserve in recent weeks. Before a recent announcement the private financial circumstances and actions of several individual policy makers brought into question the integrity and independence of the whole monetary institution. Due to the nature of the role as a rate setter […]

Three Down, three to go   After a volatile night in markets, the dust has settled to leave major currency pairs trading roughly in line with their closing value at the European close yesterday. The Federal Reserve’s decision last night saw trading ranges just shy of 1 cent prevail within major USD crosses. The market […]