SGM-FX insights

British Pound News that Chancellor Reeves had abandoned her controversial and politically charged plans to raise UK Income Tax on Friday morning sent the British Pound lower by lunchtime, however, Sterling recovered from most of that fall later on Friday. The reason given for the change of tack on Income Tax rises was that economic […]

Gold and Oil Following the longest US Government shut down ever, the market view is that following the re-opening of the US Government, the data reporting that has been absent will resume and that data will strengthen expectations of a cut in US interest rates. That resulted in the USD selling off and US Yields […]

UK Unemployment by Numbers Work and Pensions Minister Pat Mcfadden defined the art of politics when he announced that 329,000 people “had moved into work” this year and that this was part of the plan to “get Britain working”. The Office of National statistics saw things a bit differently. While not disputing the Minister’s claim, since more […]

USD and US Assets Surely one and the same, so if you own assets you are by definition long USD? Not necessarily. It’s looking like that foreigners are still storing their wealth or buying assets denominated in USD. So cash, bonds or equities primarily. However, this year as we know USD has depreciated by 13%. […]

The EU EV Charging Paradox As a reminder, the EU has decreed that there will be no more internal combustion engine powered cars after 2035. This is a further example of eco policy losing touch with commercial reality as there are currently 1 million charging points across the EU or just 1 point for 13 […]

Chancellor Reeves Market observers were no better informed at the end of the Rachel Reeves speech than they were at the outset yesterday morning. The only surprise was that having comprehensively floated options in the past two months for inclusion in her November 26 Autumn Statement, that the Chancellor should have elected to speak at […]

EU Expansion With expansion once again on the EU agenda this week and a report saying that more than half the population of the EU are keen to expand the bloc further, it is worth looking at the official candidates: Albania, Bosnia and Herzegovina, Moldova, North Macedonia, Serbia plus Turkey and Ukraine with Kosovo as a […]

FX Rates in 2035 Goldman Sachs yesterday published their long term forecasts for FX rates in 2035. Those forecasts are based on the “mean-reverting behaviour of real exchange rates adjusted for structural factors such as productivity growth and terms of trade”. Before getting too excited, it is worth pointing out that using that methodology is exactly how […]

UK Productivity The OBR or Office for Budget Responsibility has likely downgraded its forecast for UK Productivity by the time that you are reading this. Despite taking a leaf out of her boss’s PM playbook and jetting off on an overseas business trip when unwelcome economic news is in the offing, for Chancellor Reeves there […]

UK Non Doms An excellent suggestion from the previous CEO of Rolls Royce, Sir John Rose in a letter that he had published in Saturday’s Financial Times: before it’s too late, offer a flat tax amount to non doms of GBP 500,000. At a stroke that would more than compensate for the disastrous treatment of […]

Autumn Statement Trailing some prospective budget measures ahead of the UK Budget is as old as well, the UK Budget. Chancellor Reeves would do well to look up the TB/GB(Tony Blair/Gordon Brown) playbook from 1997-2008 which was a masterclass in the dangle, the tease and the test. Chancellor Reeves a good 5 weeks ahead of her […]

UK Government Borrowing Borrowing for September was reported yesterday by the Office of national Statistics or ONS to be GBP 20.2 billion, up by GBP 1.6 billion from the same month in 2024. What that means is that public spending exceeded tax income by that amount. That takes borrowing for the first 6 months of […]