SGM-FX insights

UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]

An interesting day for EURUSD Taken in isolation, many of the events scheduled for today might be thought insufficient to threaten EURUSD. However, together, the concoction of releases concerning the currencies on either side of this pair could make for interesting trading during today’s session. Foremost on the list will be the Fed minutes. As […]

USD Steadies After two volatile days USD held steady as traders having rushed into shorting the currency at the beginning of the week, have now turned en masse and are coming belatedly (in our view) to the conclusion that the Federal Reserve will in fact hold US interest rates at higher levels for longer. Better […]

What goes down.. That very old phrase: what goes up must come back down. To over analyse the phrase, it’s presented as an axiom that when something rises, its new level will necessarily mean it will come back down. I think the reason it’s ordered as such (up preceding down) is that from the day […]

US Inflation One puzzle for the markets is, if US inflation has been crushed by the Federal Reserve as is claimed, why then does the Fed stick to its tough talking hawkish rhetoric on inflation? The answer is that while US inflation was expected to be at 3.3% last night, core inflation is stuck stubbornly […]

Germany In the past 20 years, Germany’s leaders have made two big bets: first depend on China for trade and second, depend on Russia for energy. Both look disastrous at the moment end of 2023. Although Germany is predicted to be a particularly poor performer economically in the next 12-24 months, together with its aging […]

Is that it? The defining feature of FX markets recently has been the deterioration in the US Dollar. A slight moderation in US yields has accompanied a shift lower in DXY. However, with the Dollar sell-off not maintaining an overwhelming degree of momentum, questions over the longevity of this shift in USD’s value are creeping […]

City Of London Skyline Largely preciously preserved for so many years, the City of London skyline will change radically in the next 7 years as the City Corporation has approved 11 new towers, one of which will be taller than the very tallest current tower. What this adds up to is the equivalent of 70 […]

A world apart Despite the Federal Reserve’s meeting still being digested by markets this morning, the Bank of England’s own monetary policy decision is just a few hours away. Perhaps counterintuitively, the juxtaposition between central banks is likely to become more apparent as we enter the next phase of monetary policy adjustment. Most central banks […]

The other side of the coin After a short-lived period of revived volatility, ranges within EURGBP are becoming muted once again. Even for a major currency pair, the lack of volatility and tight ranges within EURGBP through the summer months was disturbing. Eventually a break of this range in favour of the Euro allowed some […]

BS Management This time BS as in Balance Sheet and the case in point is the US Federal Reserve. At the beginning of 2022 the Fed’s balance sheet stood at an all time high of USD 9 Trillion. As of now it is USD 7.9 Trillion. That is because the Fed in addition to managing […]

Two Bills Yesterday’s market was dominated by comments coming from some highly influential financial voices. Not authorities this time, but investors and in particular two individuals: hedge fund managers Bill Ackman and Bill Gross. These two individuals had been very vocal about their short US treasury view and the need for benchmark traded US rates […]