SGM-FX insights

British Pound There really was something for everyone in Bank of England Governor Bailey’s comments yesterday. Firstly he said that the BoE was comfortable with the market’s view of the decline in UK interest rates -meaning one presumes both on extent and timing. Then he followed it up by saying that the UK labour market […]

EU Commission Instead of November’s EU growth forecast of 1.2%, the EU Commission has revised back its prediction to 0.8% for the growth in the gross domestic product of the 20 countries. The 2025 year however will see growth of 1.5%. Back to 2024, it is difficult for the EU bloc to grow much when […]

Germany With the German IFO or Business Climate Index down from 90.10 a year ago to its current level of 85.20, Germany’s business leaders are more realistic about the outlook for Europe’s largest economy than their political leaders. Chancellor Scholz wisely passed the speech making duties yesterday to one of his cohorts who managed with […]

Inflation today The most watched item on today’s agenda will undoubtedly be US CPI inflation. The statistic due for release this afternoon observes consumer price inflation for the month of January. It is a critical figure for two reasons. Firstly, the Fed has pushed back against market expectations for a rate cut as soon as […]

Gong Hei Fat Choy! As we exit the Year of the Rabbit to enter the Year of the Dragon this past weekend there were no less than 9 billion journeys made within the Peoples’ Republic of China as Chinese people caught up with friends and family to celebrate the Lunar New Year after the enforced […]

USD At EUR/USD 1.0760 the USD remains firm but doubtless in Japan lights are blinking faster on the risk dashboard of the Bank of Japan as USD is close to the psychological pain level of 150.USD/JPY 149.20. US Imports In 2023 imports of goods from China into the USA fell 20% to $427 billion. That […]

China: the great leap forward On reports of the Chinese government’s president Xi arranging talks with the regulators and an imminent policy adjustment to offer relief to the beleaguered Chinese equity market, Chinese equities had their best session for 14 months yesterday.USD/CNY 7.1880. Australia Meanwhile the Reserve Bank of Australia held rates steady-no surprise- as […]

US Jobs Friday’s US jobs figures that showed an increase of 353,000 jobs which was almost exactly double what was expected has poured more than cold water on the argument for the first US rate cut happening next month. With wage inflation at 4.5%, the fear that the present level of interest rates is curbing […]

Bank of England To absolutely no-one’s surprise the Bank of England left rates as they were yesterday at 5.25% and Governor Bailey said they needed more data before cutting rates. Critics of the UK Monetary Policy setting unit will soon be accusing the Bank of being too slow to raise rates when inflation took off […]

Hat trick + 1 Yesterday’s was the fourth straight Federal Reserve meeting that has seen the FOMC hold rates at highly restrictive levels. Since the hiking cycle concluded last year, market attention has inevitably focussed upon how rates may be normalised from here. The job of the Fed has been to sustain health interest rate […]

Eurozone At the beginning of 2023 the ECB forecast was for the Eurozone to grow by 0.5%: hardly earth shaking but in the circumstances following the interest rate rises and the rocketing energy costs in 2022 and not at all to overlook the war in Ukraine, understandable. With no sense of schadenfreude -or the enjoyment […]

Stock check I know, I know. The new year celebrations are still so close in the rear-view mirror how could a whole month have possibly passed? Well, it almost has, and the passing of month end tomorrow will also bring with it new forces into the market. As far as seasonal effects are concerned, January […]