SGM-FX insights

Testify       Chairman of the Federal Reserve Jay Powell testified in front of US law makers yesterday. The event came ahead of the awaited March monetary policy decision but also at a time when investors were scrambling to identify the impact on US Treasuries from the conflict in Ukraine. The Russian Invasion had […]

Oil and Shipping     Prices rose sharply once again yesterday with WTI reaching $98.28 by midday. The oil market at present is working on the assumption that an already announced increase in supply from OPEC will mitigate oil delivery disruption arising from Ukraine and Russia thereby capping further price rises in oil. Russia exports […]

Hawkish Hike   03/02/2022 was a super Thursday that didn’t disappoint. Decisions published only 45 minutes apart from each other from the European Central Bank and the Bank of England kept traders at their desks in a busy lunchtime. UK money markets had priced in all of a 25-basis point hike from the BoE for […]

Good news! Until it’s not.   It was positive to see the employment data released this week. Perhaps of most importance was the unemployment rate, observed in the three-months to November at 4.1% versus an expected 4.2%. Despite only realising a whisker better than forecasted, the data paints a picture of the UK labour market, […]

UK Employment   With the good news that employment grew at the fastest rate since 2014 with 257,000 new job joiners on the UK’s payrolls, that presents the Bank of England with a dilemma. Having stated that they wanted to see the end of furlough not damaging the labour market before adjusting interest rates and […]

Lord/Jack Frost is back   It seems it’s Christmas time again. Sure, the lights are up and across London, but isn’t the real signal it’s nearly Christmas a resurgence of Brexit risk?! For the last few years, the tensions between the UK and EU seemed to rise into Christmas. The run up to Christmas 2016 […]

GBP   GBP was strong yesterday following the release of the UK jobs data which showed payrolls increasing 160,000 in October. The market decided that if the Bank of England had been concerned about the end of furlough and the potential for a hit to employment before raising rates or reducing bond purchases, then this […]

GBP   At the 2021 low yesterday of USD 1.3364, GBP was suffering from being besieged by the twin forces of a surge in US inflation strengthening the view of higher USD rates, plus the release of September UK economic growth of just 0.6%. Given that the Bank of England had nixed higher rates at […]

Cheers to that?   Earlier in the week we highlighted the financial market’s positive yet muted reaction to the UK budget announcements made over the weekend. The lack of decisive reaction despite the salience of fiscal policy to exchange rates was put down to the risk of yesterday’s budget announcement striking a different tone to […]

Chancellor’s Treat   There have been mixed reactions to Chancellor Rishi Sunak’s latest spending plans. Those reactions, of course, have been driven by each individual’s own stakes and thus rewards from the spending decisions made. The Chancellor even received condemnation from the Speaker of the House of Commons for swerving parliamentary procedure and declaring most […]

Get Used To It   That was what Kraft Heinz CEO Miguel Patricio advised his customers when asked about how they should deal with higher food prices. As regular readers will know, commodity basics such as corn, coffee, palm oil, sugar and soya beans have all been rising in price and are at a 10 […]

Whipsaw   If you were allowed to use your phone at the petrol pumps and happened to be reading this mail then the topic of this briefing, the cost of fuel, might hit home particularly hard. Although, let’s face it, with the queues, horns and army operated delivery tanker queuing up behind you, you might […]