SGM-FX insights

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 […]

City Of London Skyline Largely preciously preserved for so many years, the City of London skyline will change radically in the next 7 years as the City Corporation has approved 11 new towers, one of which will be taller than the very tallest current tower. What this adds up to is the equivalent of 70 […]

Sea of Green As expected the Bank of England yesterday kept UK interest rates at 5.25%. The accompanying narrative was firm: rates may go up again but the inference is clear, only if it is necessary, but it is much too early to talk about cuts. The market liked this nuanced message and the equity […]

Bank of England As most readers know, the Monetary Policy Committee is due to pronounce on the next move or pause in UK interest rates next week on 2 November. Having paused at 5.25% in September after 14 consecutive rate rises, the expectation despite the stubborn 6.7% rate of inflation is that there will also […]

UK Economic Outlook The announcement earlier in the week that inflation is stuck at 6.7% has given rise to further examination of what’s in store for the UK in the next year: firstly the expectation is that base rates will remain above 5% until the end of 2024. Next under the microscope is the amount […]

UK Branch Banking This week has revealed the difference in bricks and mortar strategies between the traditional clearing banks and first an ex building society now a bank and then a challenger bank. The clearing banks have been efficient and some would say ruthless in shutting branches. There are now 4,000 branches in the UK […]

The parapet With high US yields and strong US data publications, it is not the time for currencies to stick their head above the parapet. Unfortunately for GBP, the attention that the Prime Minister is drawing to himself, and the conservative party conference, runs the risk of highlighting the political risk associated with GBP. With […]

British Pound With GBP back to where it started the year pretty much, there are some stories starting to appear along the lines that while that may be the case, GBP is still up 18% from a year ago following the Truss/Kwarteng mini Budget fall out. That comparison while of course true is not a […]