SGM-FX insights

Data Update: UK Inflation Mixed messages for the UK macro economy were received once again yesterday. As the July inflation figures were released, it was clear that there wasn’t going to be one decisive narrative that would emerge as to whether the reading was supportive or destructive to the view that inflation is cooling in the […]

Intervention in the air Over the past 24 hours there has been a lot of talk of intervention and currency management within the market. Besides the Yen whose yield curve control debate has been dominating headlines for some time now, Argentina and Russia are in focus for the potential to take an active management role […]

UK A couple of statistics over the weekend that caught the eye: the first is more marketing than substantive economically, but the second one is rather more significant. Taking the first one, Saffron Building Society is offering its savers who have been with them for more than 1 year the chance to open a monthly […]

UK House Prices Unsurprisingly given the 12 interest rate rises and cost of living squeeze in the UK, the housing market has seen its largest year on year fall since 2009 when everyone was suffering from the global financial crisis. In the year to April the UK housing market has dropped by 3.4% with the […]

Turkish Lira While President Erdogan removed the uncertainty overhanging the Turkish market by winning the election in the run off over the weekend, the news served to cement the certainty that nothing much was likely to change with respect to Turkish economic policy or indeed the subservient role of the Central Bank of Turkey to […]

Is the Rand’s decline isolated?  The South African Rand’s sizeable decline over recent trading sessions has spooked markets. During the peak of the sell off, beginning on Tuesday of last week and lasting into Friday’s trading session, the decline in the Rand appeared to spill over into some other emerging markets. With USD/ZAR trading close […]

Chinese Pantomime Signals coming from the Chinese economy are creating dichotomous pictures when observed through the lens of market pricing versus analysts’ forecasts. Part of the reason for the cognitive dissonance that is clearly developing between observers of the Chinese economy is down to the fact that there are many competing forces vying for dominance […]

Loosing Loonie The Canadian Dollar continues to lose ground as investor appetite thins. As we know, Canada began its hiking cycle earlier than most developed-market central banks. Whilst most of the world’s major economies still had blinkers on, claiming that inflation would be transitory, the central Bank of Canada was busy preparing to tighten monetary […]

Pass Through The so-called pass through rate measures the sensitivity of a country’s inflation dynamics to changes in the value of its local currency. In truth, although the term is used to describe causality between currencies and the price level, the effect does run both ways with inflation impacting the exchange rate at the same […]

The same old problem The continuous evolution of and speculation over the peak of Federal Reserve interest rates has continued to wreak havoc upon emerging market currencies and assets. Due to the preeminence of the Federal Reserve, it can frequently be read as a proxy for global rates. As we have spoken about recently, the […]

A brave bet Late last year in late October, Luiz Lula da Silva claimed victory in a presidential election in Brazil. The election was close fought being won by less than two percentage points. The election saw Luiz Lula da Silva stage a comeback to defeat well-known Jair Bolsonaro, the at the time incumbent right-wing […]

Expensive Furniture At the time of writing at least, ANC leader and South African President Cyril Ramaphosa has managed to hang onto power. When the President found himself at the centre of a South African political scandal, there was a lot of concern and risk surrounding the nation and its assets. International attention was cast […]