SGM-FX insights

Buoyant vessels If loose lips sink ships, then the monetary policy institutions of the European Central Bank, Bank of England and Federal Reserve should be firmly afloat. Despite the President of the ECB speaking yesterday in London, there are still very few clues available about what lies in store for the European monetary authority’s September […]

Eurozone Inflation Unchanged at 5.3% Eurozone inflation having been expected to dip towards 5.1% in August disappointed. This was mainly due to higher than expected energy prices. Despite this evidence of stubborn Eurozone inflation, the majority market expectation remains for a hike in October or November but not in September. GBP/EUR 1.1675. US Interest Rates […]

Scaremongering? Before unpacking the title of this daily briefing, a quick update on this data heavy week. So far, the slew of economic data from the Eurozone has by and large confirmed the theme of moderating inflation across members of the currency union. No significant surprises across the numerous data types released means the Euro […]

Race to the bottom The lack of volatility within some key currency pairs was reaching concerning levels. The paralysis of pairs including GBPEUR meant that intraday volatility was almost negligible, with only minute and seemingly controlled fluctuations in the pair to observe. Despite that low volatility environment having set in for several months now, the […]

Poland While some countries (the UK for example) agonise over the wording of a referendum question often ending up with a bland and neutral sentence, Poland has no such inhibitions. It is worth repeating the government’s imminent proposed question in full: “Do you support the admission of thousands of illegal immigrants from the Middle East […]

Germany : Slowcession. The Germans have form when it comes to coining words and phrases to capture whatever is current at the time. In 2023 it is “slowcession” which is the no-man’s land between slow growth in the economy and a recession. Germany is currently laboring under annualised 6.2% inflation versus 5.3% across the Eurozone. […]

European Central Bank Yesterday’s decision by the ECB to raise rates by 25bps was no surprise, but the closely watched language around the announcement did gain the attention of market watchers. Casting our minds back to the seemingly long ago June ECB meeting, the language then was around more interest rate rises required in subsequent […]

Fed up, ECB up? Despite last night’s Federal Reserve decision still ringing in the ears of markets this morning, there will be little respite. With the ECB decision only a few hours away, markets will remain attentive. Summer trading conditions have hampered volatility but this could show signs of stress should any surprises be concluded […]

Another datum, another dive We are entering the phase where politicians are obscuring their eyes behind their palms, but central bankers begin to sweat a little less. ECON101 will tell you that monetary policy is faster than fiscal policy to have an impact on the economy, but you’ll never find someone boasting about how reactive […]

USD, EUR and GBP With the USD index which measures the currency against a basket of 6 currencies falling 0.15% to 99.753 to a 27 month low at the beginning of the world’s trading day yesterday in Asia, it would look like the USD will remain under selling pressure in the short term as markets […]

UK Food Inflation Such is the state of affairs regarding UK inflation that the news that annual food inflation has fallen from 15.4% in May to 14.6% in June was greeted with enthusiasm. Food has taken up the baton from energy when it comes to eye watering levels of UK inflation and despite reassuring words […]

Russia and the Markets Distilling the uncertainties around what is really happening and what might happen following the events in Rostov on Don and other areas as close as 200km to Moscow over the weekend is a mug’s game. Interesting to see how little markets have moved in anticipation of the market opening a few […]