SGM-FX insights

UK Election Landslide As we are being told that it is game over for PM Rishi Sunak, it is worth taking a look as to what that would mean for markets with an incoming Labour Government for the first time for 15 years with a large majority and an untested cadre of top leaders. Deep […]

Vigilance, Commitment and Perseverance Those are the requirements from ECB President Christine Lagarde for Europe to win the fight against inflation. What is conspicuously missing is an indication of the likely timing for the next cut in EUR interest rates, but it will not be at the time of the next ECB meeting in July. […]

ECB As was widely expected, the European Central Bank duly cut its deposit rate by 25bps from 4.00 to 3.75% yesterday lunchtime. Despite inflation being forecast to remain above the key target rate of 2.0% well into 2025 and currently standing at 2.2%, the ECB went ahead with the President, Mme Lagarde strictly pronouncing at […]

European Elections Traditionally European voters are decided on how to cast their votes well in advance of polling day, right? Wrong: in most cases and for example while worth looking at Malta where only 5% make up their minds in the last few days, at the other end of the scale in the Netherlands where […]

British Pound As the main global economies reported on inflation last week, analysts are drawing some high level conclusions: inflation remains stubborn which reduces the probability of the number of rate cuts this year expected three months ago. Consumer sentiment remains strong in the USA. Europe has declared that it is not constrained by other […]

Currency Volatility Recently we wrote about the possibility of market volatility arising from the elections and their outcomes that will take place around the world over the next 6 months. Looking at the DB Index of FX Volatility which currently stands at 6.3, it is more than worth noting that the 5 year average is […]

EU Elections With hard right French candidate Marine Le Pen and centre right German Ursula Von der Leyen vying for the position of being seen as the unifying right wing EU parliamentary candidate , it is Italy’s Giorgia Meloni who is being touted as the queen maker and who will determine the composition of a […]

Vice President Rather like those riderless horses in the Grand National that gallop over the fences alongside horses with jockeys aboard, Nikki Haley despite having abandoned her nomination bid for the Republican presidential candidacy, is still garnering 20% of Republican votes. Now however NH while falling short of endorsing her ex rival President Trump, has […]

Gold The gold bulls are having a high old time with the metal at almost its all time high of Monday. There are three main reasons for this: first is the amount of gold bought by the world’s Central Banks in past months, second is the huge demand from China as holders of Yuan fearful […]

Asian Currency Wars A thoughtful article in the South China Post on Saturday evening raised the spectre for what many fear but few choose to put into words: China opting for a significant devaluation of the Yuan to make it more competitive and that in turn triggering devaluations in the other Asian economies.  The reason […]

Japanese Yen As soon as a rash of market analysts concluded yesterday that the Yen was a basket case and that the Bank of Japan were wasting their money intervening to prop up the Yen, the Japanese Yen strengthened markedly on the back of US data admittedly rather than positive Japan data, but it certainly […]

UK Pay With unemployment at its highest since last year with the Q1 rate at 4.3%, it would look safe to assume that the Bank of England would be encouraged to cut UK interest rates sooner rather than later; however with wage growth at 6% providing the counter argument to sooner, the first cut may […]