SGM-FX insights

US Dollar and Markets USD generally weak in thin markets and the EUR strong at EUR/USD 1.1040 and EUR/JPY 157.40.Gold at $2066.Brent Oil $81.10 as the markets watch the Red Sea and the Houthis with trepidation. One oil fact for 2023: Russia sold half of its entire oil production to China. Another reason why the […]

A Tale of Two Cities Very early yesterday morning Lloyds Bank of the UK released the results of its Business Confidence Survey and it is fair to say it was more Bah Humbug than full of seasonal cheer since it showed the largest monthly fall since August 2022 down from 42 to 35. Meanwhile the […]

GBP strong for long? To begin with GBP is at its highest level since July this year when it briefly marched up to GBP/USD 1.31 and the reason for that is that the market has bought into the argument that the Bank of England will keep interest rates higher for longer. On that basis, holders […]

Central Economic Work Conference The CEWC is China’s closely watched economic policy setting committee which this week was chaired by President Xi. An economic growth rate of 5% has been set for 2024, but a more realistic target according at least to Western analysts is 4.5%. While still healthy in comparison to near zero to […]

Okay.. for now The Federal Reserve delivered its latest monetary policy decision last night. After months of huge deliberation over very little fresh inflation, it appears the Fed has finally caved to the market’s pricing and rhetoric. Following last night’s decision, the Dollar is trading at least one cent weaker within major crosses. That sell […]

UK Interest Rates This comes under the heading of do not shoot the messenger: the market believes that rates will/should be cut sooner rather than later. The Bank of England is making it clear that its Monetary Policy Committee will not be so easily swayed. Why? If you have not spotted it, it is largely […]

Higher for longer The message that most central banks have been trying to push throughout their hiking cycles has been to expect rates to rise and remain elevated. It is the ultimate level of rates more than the speed at which they rise that determines how the economy receives monetary tightening. At least in the […]

US Interest Rate Cuts With 5 quarter point cuts expected in 2024 by market watchers at the end of 2023, what could go wrong for the US economy and by implication for the rest of the world? The answer is that if inflation is squashed and the economy is cooling, then that will be a […]

Japan Some of the market’s Great Minds spent yesterday afternoon debating whether Japan could get away with raising interest rates at the same time as the Central Banks from the other major markets are starting to cut their interest rates. In short, Japan can and probably will, since its monetary policy has been effectively in […]

I’m a central banker, get me out of here Ant and Dec were not present at the RBA decision overnight. However, based upon the reception of the decision, Governor Michele Bullock might rightly feel she was in one of the duo’s trials. Markets offered a frosty reception to the Reserve Bank of Australia’s latest interest […]

UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]

Data Day Despite salient data already having been published in China and France so far this morning, we are far from finished with the deluge of data due to reach the market today. The most important of which will be those that we have signposted in earlier briefings: Eurozone and US inflation figures. Given just […]