SGM-FX insights

UK Rates and Sterling   UK rate expectations are likely driving much of Sterling’s spot and forward pricing. Near-term UK rates are expressing at least a high degree of correlation if not causation with GBP as the market questions what next week’s Bank of England (BoE) decision and the rest of the year will bring […]

Hydrogen Cars   Following our piece last week on hydrogen, one of our readers has asked a number of questions which others may also have wondered about. Here are the answers: there are currently only two models on sale; a Hyundai Lego and a Toyota Mirai. Both cost approximately GBP60k. There are also further models […]

Spring Budget   Having developed a name for himself as the pandemic era Chancellor, Rishi Sunak had attracted a reputation of going above and beyond to provide economic support to an ailing economy – for better or for worse will remain your decision. Policies created in the face of the pandemic, not least the landmark […]

Auto Stock Market Valuations and GBP/EUR     In pole position on the grid is Ferrari whose shares trade at an eye watering 39 times annual earnings. Conversely Mercedes only manages a seven times multiple. This is the landscape confronting VW’s Board as they deliberate about listing Porsche which makes up a substantial portion of […]

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 […]