SGM-FX insights

  At 09:30 yesterday morning, the Pound was in momentary free fall as investors priced out the positive risk of an increase in interest rates in May and into 2019. As the imperative monetary policy decision on the 10th May draws ever closer, analysis and qualifications of future inflation expectations will be highly salient to […]

  The Pound Sterling has flipped back and forth from an infatuation with politics, to an inescapable reliance upon economics. The phenomenon is partially responsible for creating the unprecedented channel trade that GBPEUR has crabbed along over the last six months. Supported at a little above 1.1050 on several occasions in October, the GBPEUR cross […]

  The 21-month transition deal between the United Kingdom and the European Union has been struck, announced, and hailed by Michel Barnier and his UK counterpart, David Davis. The Pound rallied and equity markets spluttered, but make no mistake, no progress has been made.   In fact, the outcome of one year of tense negotiation […]

  Over the past couple of days, Sterling has enjoyed two optimistic and seemingly genuine rallies that have ultimately all but dissipated within a matter of hours. Yesterday, Robin Walker, the Undersecretary of State for the Department for Exiting the European Union, or David Davis’ sidekick as he might be better known, suggested that the […]

Discussion and Analysis by Grace Gliksten:   The interest rate is a monetary policy tool used by central banks to manipulate the macroeconomy. Representing both the reward for saving and the cost of borrowing, interest rates can manipulate the attractiveness of prospective domestic currency exposures.   Unsurprisingly, the Bank of England decided not to raise […]

Discussion and Analysis by Charles Porter:   In a year that could see the further normalisation of developed economies’ monetary policies as well as the restoration of volatility and geo-political risk; fortune may well favour the brave. However, on this, the first trading day of the New Year, fortune also appears to favour Sterling, with […]

Following Christmas, currency markets appear lethargic too. The low liquidity environment of the end of the year has seen most currencies stay within a very tight and unthreatening channel. Today, the biggest major mover of the day was the US Dollar. Today’s market movements seem rather reminiscent of the entire year: a mixed pound sterling, […]

Discussion and Analysis by Charles Porter:   Deputy Governor of the Bank of England, Dr. Ben Broadbent, gave a speech two weeks ago on Brexit and interest rates. The take away message from the speech was that a disharmony between a happy public and negative markets is driving inflation. The Deputy Governor suggested that there […]

Discussion and Analysis by Charles Porter:   After a busy day on currency markets yesterday, the biggest mover ahead of today was the Euro, followed closely by the Pound. Heightened volatility was unsurprising given the central bank monetary policy decisions that occurred in the underlying economies of the respective currencies. Monetary policy decisions from the […]

Discussion and Analysis by Charles Porter: Many market commentators are attributing last week’s bullish Euro, 1.17s to mid-1.19s against the Dollar, to a reduction in political risk within Germany and Ireland. This view appears unfounded both in terms of pricing action and sentiment. In a moment of madness, analysts have managed to convince themselves that […]

Discussion and Analysis by Charles Porter: Today’s budget was delivered to the House of Commons with considerable showmanship and bluff. The Chancellor’s hand contained little more than off-suit low cards – 1.5 and 1.3 to be precise. However, the chancellor managed to find a concealed rabbit within the deck, admirably silencing the qualms of critics […]

Discussion and Analysis by Grace Gliksten   It has been reported that Prime Minister Theresa May won ministerial support to increase the Brexit offer from €20bn to €40bn yesterday. May is hoping that the increase will unlock stalled negotiations, but has been warned by Eurosceptic colleagues that this is conditional upon securing good transition and […]