SGM-FX insights

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 […]

ECB President As predicted, Mme Lagarde, President Christine Lagarde yesterday stuck to her existing line that it was all much too early to talk about interest rate cuts in the Eurozone. The market or rather 60% of those polled are holding out for the first such rate cut occurring in April. Maybe that 60% should […]

Question Without wanting to sound alarmist the question is whether markets have factored in the geo political risks present due to the conflicts in Eastern Europe and the twin conflicts in the Middle East which are overlaid by the vast number of general elections scheduled for 2024. Maybe a better way to express the question is […]

De-Dollarization in Africa More on this story with real life examples of countries or rather one country in particular not just talking about it, but actually doing it: China. Bank of China has operations in Kenya, South Africa and Zambia. But when arriving at Kenneth Kaunda International Airport in the Zambian capital of Lusaka, Bank […]

EU Wage Growth In recent years wage growth has been the Cinderella of the inflation index but it now it is more a case of militant tendency when it comes to pay settlements. The wage growth pencilled in by the ECB consistent with their inflation targeting is 3%. Clearly the German railway workers’ union has […]

European Central Bank and British Pound Markets have fully discounted a rate cut of 25bps in EUR rates by April. Conversely the expectation is for the Bank of England to cut UK interest rates by 25bps in June with a 75% chance of that cut being brought forward to May. As it stands, the current […]

Say Squeeze Happy New Year to you all. With this, the first trading session of 2024, I thought it important to look at an element of potentially complacent pricing that had endured the final trading sessions of 2023. The risk that is presenting itself within EURUSD could be one of the first misallocations to be […]

US Interest Rates and Oil No room for errors is the mantra that has dawned on the market as the effect of having been so exuberant about the path of US interest rates in 2024. In the same way that fears of an escalation of disruption in the Red Sea of oil shipments by the […]

Did we forget CHF? With the sudden pivot by the Fed in mid-December, it has been easy to marginalise otherwise high salience events. One such largely overlooked development has been within Switzerland and its Franc. The Swissy has been a key currency as it has been one of those major currencies undertaking a program of […]

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 […]

How to tighten without tightening As the ECB learned last week, the easiest way to de facto tighten policy is to allow others to do it for you. At the press conference last week, President Lagarde did not reveal similar vulnerabilities to the ECB’s monetary outlook as the Fed had done the evening prior. The […]