SGM-FX insights

European Interest Rates More momentum on rate cuts in the Eurozone as expectations grew for cuts starting in March and totalling 140bps in 2024. Equally in the UK cuts of 130bps starting in June are being pencilled in to market calendars. What this means is that GBP/EUR is looking more than especially good value at […]

Eurozone That was a surprise: yesterday the EU announced that inflation had fallen to 2.4% which was considerably better than the 2.7% that markets had expected. Despite the ECB saying it was far too early to cut rates, the market has pencilled in the first cut for April. Before getting carried away it should be […]

Dutch Election What the Hard Right under Geert Wilders winning by the largest number of seats(37) means for Europe will become clear in the next months but for the Netherlands the composition of their new coalition government is expected to take a month and will likely comprise 4 or even 5 parties. This may or […]

British Pound Two days after the Autumn Budget Statement, the Pound is hanging in there and is looking firm. Why? Despite some attempts to talk it up on the grounds of the economy not in fact contracting, but merely marking time, the real reason is that while not being shouted from the rooftops, but definitely […]

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 […]

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 […]

Eurozone With Eurozone core inflation now at 4.2 % but the economy stuttering at -0.1% growth, the forecast from a Reuters poll of economists is for a gentle increase in growth starting now: +1% in 2024 and +1.5% in 2025. Apart from that benign outlook being almost certainly wrong, it is notable for the non […]

European Interest Rates In short, unchanged after a spate of 10 straight rises. Despite calls for cuts, sensible ECB headmistress Mme Lagarde was having none of that at the scheduled press conference yesterday: too soon, she admonished and wisely counselled caution given the inflationary effect of the unfolding crisis in Israel and Gaza. Despite that, […]

ECB decision Later today the European Central Bank is scheduled to deliver its latest monetary policy decision. As a recap, the central bank has spent the last year publishing 10 back-to-back hikes to the benchmark rates within its suite of monetary policy tools. Today, however, it seems almost certain that European policy makers call time […]

USA Inflation In the year to end of September US inflation stands at 3.7%. While it has come down, the snag is that it is not continuing its downward trajectory as expected, and it is this sticky inflation that has strengthened the USD in the last hours of yesterday’s trading session. That has meant that […]

UK Branch Banking This week has revealed the difference in bricks and mortar strategies between the traditional clearing banks and first an ex building society now a bank and then a challenger bank. The clearing banks have been efficient and some would say ruthless in shutting branches. There are now 4,000 branches in the UK […]