SGM-FX insights

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 […]

UK Interest Rates At 5% UK rates are at the highest level since 2008. While market expectations were still mostly for a rise of 25bps, yesterday morning ahead of the announcement there was a rising chorus calling for 50bps led by the Financial Times. In the event the voting was 7-2 for 50bps and the 2 were […]

Oil WTI Nymex oil was down $1.53 from Friday’s close yesterday at $70.25 despite China cutting two benchmark lending rates by 10bps each for the first time in 10 months. No improvement in demand is discernible and oil traders are looking for signs of a sustained increase in Chinese demand-forecasts suggest an increase in that […]

European Central Bank The language has changed and the ECB set a whole lot of new records yesterday: firstly the language has gone from it will all be ok on the night to, these are the facts and we need to be pragmatic. Growth is stagnating and inflation is only moderating. If there is a […]

A different Euro-vision  A late start to monetary tightening versus the rest of the world could deliver the some-what illusive stronger Euro to markets. A delay to hike rates in Europe has left the ECB playing catch up, with interest rates lagging noticeably behind their peers. Since its inception over 20 years ago, the Eurozone […]

European Central Bank  Yesterday the ECB duly raised its interest rates by 25bps. President Lagarde maintained that the ECB was on a journey and had not yet arrived-some would, given that ECB inflation is not dropping and is stuck at 6.9%, interpret that analogy as being their firm intention to continue to raise rates given […]

US Government Default on June 1 without a hike in the Debt Ceiling  Markets (so far) are remarkably sanguine about this appalling scenario for the US and therefore the global economy. President Biden and the Republican House Speaker have not discussed this issue since February-and the Speaker is currently in Jerusalem so unable to meet […]

Time to double down? A rate hike at the ECB next week looks like a foregone conclusion. The only question remaining is whether the bank decides to opt for a 25 or 50 basis point adjustment to its key monetary policy facilities. There is likely to be increased Euro volatility moving into the event. However, […]

They’re all at it We have been used to the protagonist of central bank hawkishness being the United States. With this week ahead of Easter only a day or so old, it is clear that the narrative so far has evolved to focus upon the rest of the world. So far this week we have […]

European Gas Prices Six long months ago the cost per MegaWatt hour of European gas was EUR175. It now stands at EUR 44. Good news but core inflation in the EU still remains stubbornly high.  German inflation for example stands at approximately 7% which is not what was predicted by the ECB and not the […]