SGM-FX insights

The crunch Was yesterday the crunch point for GBP that we will be referring back to for several months? Quite possibly, is the answer. Readers of the daily briefing and our clients will likely have shared conversations with our front desk of a forthcoming crunch point in Sterling markets. We have been suggesting that the […]

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 Data Check Tomorrow morning, ahead of market open, UK inflation data will provide in the latest meaningful metric for which to adjust GBP forecasts. We have seen inflation data remain stubbornly high in the UK recently, at a time when inflation rates are beginning to falter in other geographies. Tomorrow’s reading may therefore hold […]

Sell everything? Let’s hope not. But a return to the ‘sell everything’ mentality was unmistakably present in markets last week. Traders were blindsided by US jobs data on Thursday, with data recording in at nearly double the consensus estimate. Bond prices across virtually all of the Western hemisphere fell alongside stock indices. Despite being more […]

US Jobs That’s the thing about the weekly employment numbers: for every few times that they correspond to what the market broadly expects, there is a big surprise. Yesterday was just such an occasion: 220,000 new private sector jobs expected but 497,000 was the actual figure. Conclusion: US interest rate rises are not having much […]

UK Mortgage Rates The average fixed rate for a 5 year mortgage is 6.01% and for a 2 year mortgage is 6.47%. Given that the average easy access deposit rates stand at 2.45% this means that the gap between 2 year and easy access is at 4.02%. One year ago fixed rate mortgages cost 3% […]

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 […]

Slim ranges  The theme we noted yesterday continued strong in markets with the weekend’s events failing to have a meaningful impact upon markets. Tight trading ranges prevailed within most markets with measures of volatility failing to breakout higher. Spreads on options remained tight at least within the FX space as implied volatility continued to fall. […]

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 […]

Central banks in the driving seat  Following testimony from Jay Powell that dominated trading yesterday afternoon, attention will today once again shift to the Bank of England. The BoE has been in the spotlight as UK inflation data continues to trend above similar statistics being released in other developed economies. Yesterday, the most recent reading […]

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 […]