SGM-FX insights

British Pound Two days after the Autumn Budget Statement, the Pound is hanging in there and is looking firm. Why? Despite some attempts to talk it up on the grounds of the economy not in fact contracting, but merely marking time, the real reason is that while not being shouted from the rooftops, but definitely […]

UK: We Will Cut Taxes This morning will demonstrate that it is worth listening carefully when politicians make promises. In this case it is the word “will”, because with the economic tank almost completely dry, while he is a recent convert to the idea of cutting taxes, Chancellor Hunt has limited scope to do anything […]

UK Market With Chancellor Hunt set to deliver the Autumn Statement on Wednesday, the chat is about tax cuts. However that chat is reckoned to be just that rather than realistically of substance, given that Jeremy Hunt yesterday on BBC TV ruled out any measures likely to stoke the still glowing embers of inflation. More […]

USD Steadies After two volatile days USD held steady as traders having rushed into shorting the currency at the beginning of the week, have now turned en masse and are coming belatedly (in our view) to the conclusion that the Federal Reserve will in fact hold US interest rates at higher levels for longer. Better […]

Politics and GBP They say a week is a long time in politics. If we misinterpret this famous phrase, for the likes of Liz Truss and her increasingly forgotten Chancellor Kwasi Kwarteng it was virtually an entire tenure in office. Perhaps this is all too fresh in the rear view mirror of Conservative Party politics […]

UK GBP managed to improve yesterday in the wake of comments from the Bank of England Governor and also the Chief Economist who both gave the clear message that it was too early to talk about cuts. The reason for the faint praise for GBP from us is that once the market absorbs the implications (inflation […]

Two defining developments Both for their respective currencies but also for wider market conditions, recent developments in the UK and Chinese economies will have a significant impact. The two headlines that have recently captured traders’ attention are publications of deflation in China and a push back on declining rate expectations in the UK. Let’s unpack […]

UK Employment It may be anecdotal today, but it is maybe going to be rather more than that when we look back in a few months’ time: when one reads that top accountancy firm PWC is laying off 500 staff because fewer resignations than expected have occurred, it would appear that the time of the […]

City Of London Skyline Largely preciously preserved for so many years, the City of London skyline will change radically in the next 7 years as the City Corporation has approved 11 new towers, one of which will be taller than the very tallest current tower. What this adds up to is the equivalent of 70 […]

Sea of Green As expected the Bank of England yesterday kept UK interest rates at 5.25%. The accompanying narrative was firm: rates may go up again but the inference is clear, only if it is necessary, but it is much too early to talk about cuts. The market liked this nuanced message and the equity […]

Bank of England As most readers know, the Monetary Policy Committee is due to pronounce on the next move or pause in UK interest rates next week on 2 November. Having paused at 5.25% in September after 14 consecutive rate rises, the expectation despite the stubborn 6.7% rate of inflation is that there will also […]

UK Economic Outlook The announcement earlier in the week that inflation is stuck at 6.7% has given rise to further examination of what’s in store for the UK in the next year: firstly the expectation is that base rates will remain above 5% until the end of 2024. Next under the microscope is the amount […]