SGM-FX insights

Rather you than me, Christine As we and the market alike have been speaking about recently, Eurozone rates are all the rage. As we highlighted yesterday, the path for rate cuts next year has already captivated the market with easing being forecasted as early as Q1 2024. As we approach the Christmas period, we must […]

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 […]

UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]

UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]

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 […]

UK: We Will Cut Taxes This morning will demonstrate that it is worth listening carefully when politicians make promises. In this case it is the word “will”, because with the economic tank almost completely dry, while he is a recent convert to the idea of cutting taxes, Chancellor Hunt has limited scope to do anything […]

UK Market With Chancellor Hunt set to deliver the Autumn Statement on Wednesday, the chat is about tax cuts. However that chat is reckoned to be just that rather than realistically of substance, given that Jeremy Hunt yesterday on BBC TV ruled out any measures likely to stoke the still glowing embers of inflation. More […]

USD Steadies After two volatile days USD held steady as traders having rushed into shorting the currency at the beginning of the week, have now turned en masse and are coming belatedly (in our view) to the conclusion that the Federal Reserve will in fact hold US interest rates at higher levels for longer. Better […]

Politics and GBP They say a week is a long time in politics. If we misinterpret this famous phrase, for the likes of Liz Truss and her increasingly forgotten Chancellor Kwasi Kwarteng it was virtually an entire tenure in office. Perhaps this is all too fresh in the rear view mirror of Conservative Party politics […]

UK GBP managed to improve yesterday in the wake of comments from the Bank of England Governor and also the Chief Economist who both gave the clear message that it was too early to talk about cuts. The reason for the faint praise for GBP from us is that once the market absorbs the implications (inflation […]

Two defining developments Both for their respective currencies but also for wider market conditions, recent developments in the UK and Chinese economies will have a significant impact. The two headlines that have recently captured traders’ attention are publications of deflation in China and a push back on declining rate expectations in the UK. Let’s unpack […]

UK Employment It may be anecdotal today, but it is maybe going to be rather more than that when we look back in a few months’ time: when one reads that top accountancy firm PWC is laying off 500 staff because fewer resignations than expected have occurred, it would appear that the time of the […]