SGM-FX insights

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 […]

UK Cost of Government Debt For 2022 the UK has achieved the dubious distinction of being the leading developed nation when it comes to the costs of servicing its debt at GBP 110 billion or 10.4% of government revenues. To give an idea of the perils of group think on boom bust and by implication […]

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 […]