SGM-FX insights

Bank of England It is the big week in UK markets not because there is much doubt in the minds of economists that rates will go up once again on Thursday, but rather more because the “clever” money is predicting that this increase will be the last. What could go wrong? Assuming rates go up […]

UK Interest Rates Despite soothing words from BoE Governor Bailey last week on interest rates reaching the end of the rise cycle, wage inflation of 7.8% in the 3 months to the end of July plus unemployment a tiny bit higher at 4.3% both suggest that the end may have been called too early. So […]

Speakers Many FX crosses observed volatility yesterday based upon the words of decision makers at scheduled speeches. Words from policy makers at the Bank of England and the European Central Bank in particular caused significant shifts in spot prices and liquidity conditions within major pairs including EURGBP, GBPUSD and EURUSD. Whilst the words offered to […]

UK Borrowing At GBP 2.58 trillion the UK’s borrowing represents 99% of UK GDP. It seems somewhat perverse therefore for newspapers to speculate about pre election tax cut potential. Apart from crushing inflation and increasing productivity, the reduction of the colossal amount of UK Government debt is now assuming the top priority for a fiscally […]

Data Update: UK Inflation Mixed messages for the UK macro economy were received once again yesterday. As the July inflation figures were released, it was clear that there wasn’t going to be one decisive narrative that would emerge as to whether the reading was supportive or destructive to the view that inflation is cooling in the […]

UK Retail Sales Sluggish July sales due to bad weather and caution caused by poor inflation figures meant that while an increase of 1.5% versus July one year ago was recorded, in real terms after allowing for inflation, that represented a fall. While this may have been an excuse to sell GBP, in fact looking […]

Positioning At least within the G10 space, there has been a lack of conviction behind FX positioning of late. In line with the elevated levels of volatility that we have been seeing, the volume of contracts outstanding and positioning within major FX pairings has been underwhelming. However, as central banks now begin to curtail their […]

UK Interest Rates As expected by 66% of economists polled, the Bank of England duly raised rates by 25bps; 34% anticipated a more draconian 50bp rise. Little or nothing is written these days about the Governor of the Bank of England being required to write to the Chancellor of the Exchequer to explain when the […]

This week’s only just begun. Despite summer trading conditions very much taking hold of markets, there has been sufficient data and enough market-sensitive headlines to move some spot FX markets. For example, the data observing the German labour market this week provided sufficient doubt to question some of the Euro’s recent declines and relieve some […]

UK House Prices Much being made of the fact that UK house prices have fallen 3.8% in the year to July. More seasoned commentators are doubtless thinking that firstly it is surprising for now at least that they have not fallen further, and secondly that they will have further to fall as the multiple interest […]

What if economics doesn’t work? Forgive another briefing on interest rates. However, as part of our offering as your eyes and ears on the FX market, it’s important we bring you coverage on those topics dominating market discourse. Unfortunately, those not too fond of monetary policy and economics might find the market’s latest fixation on […]

UK Interest Rates A big week for the Monetary Policy Committee at the Bank of England which will meet and pronounce this Thursday: while the general expectation is for a rise of 25bps, there are plenty of hardliners who are calling for a draconian 50bp rise and of course there are still the doves who […]