SGM-FX insights

Will they, won’t they It’s one week to the day until the next Bank of England decision. It will prove critical to the value of GBP and perhaps prove to be a defining feature of the currency market for at least the first quarter of this calendar year. Bank rate in the UK currently sits […]

UK Government Borrowing By Numbers Many people have a disconnect when it comes to linking government finances with their own-bring on the idea of teaching finance as part of the school curriculum-however, yesterday’s release showing the government borrowing figures fall into the category of both attention grabbing but so eye watering that many will likely […]

Canadian Clues There has been a key theme in markets emerging for several months now. It will likely continue to be the defining feature for several months if not quarters ahead. We had lived several phases of the monetary adjustment cycle that have each been so central to defining exchange rate movements in the post-pandemic […]

European Central Bank As we buckle up for the forthcoming February 2 European Central Bank meeting, ECB Board Member Klaas Knot broke cover at the weekend with the warning that at least two 50 bp rises are on the cards for February and March with more to follow in May and June, but the size […]

Bank of England Governor Bailey more optimistic about both inflation falling and also interest rates peaking at a lower level. The Delphic language normally favoured by Central Bankers was not deployed yesterday when the Governor saw no reason to correct the market in its assumption that 4.5% would be a ceiling for interest rates. Not […]

Room for new funding Despite the decision by the Bank of Japan to keep monetary policy all but unchanged, the market is still clinging to the prospect of monetary adjustment in the periods ahead. Following the initial reaction in USDJPY in the early hours of the morning, the remainder of yesterday’s trading session saw the […]

Oil Expectations of further relaxation of China’s Lock down policy evidenced by the vast numbers of people permitted to travel for the Lunar New Year celebrations were sufficient to drive up NYMEX WTI oil up to $81.20 on optimism that China is close(r) to re-opening fully for business. Great British Pound GBP firmer versus both […]

Why GBPEUR may still move lower Despite a significant leg downwards in late 2022, it seems plausible, indeed likely, that GBPEUR may have further to fall. Late last year and in early 2023, GBPEUR has stabilised with its fall from the teens proving sufficient to redress the changing fundamentals and flows across the currency pair. […]

Martin Luther King Day With the USA off today and bond and equity markets closed, the world’s business elite are in Davos, Switzerland meeting and schmoozing. The big difference this time at Davos will be the complete absence of Russian billionaires. While markets may be quiet as a result of the US holiday, it is […]

US Inflation Good news for the market in that expectations were for an unchanged inflation rate and in fact it declined 0.1% in December. So that means for the 12 months to end December inflation was at 6.5% having been 7.1% for the year to end November. Less good news however for USD which weakened […]

Labour Before you panic, this briefing is about the economic aggregate of labour, not the UK political party. Whilst that may mean this briefing is a little less controversial than it otherwise may be, it will be more far reaching. Labour factors and the labour market in general have served a supporting role to monetary […]

Federal Reserve A few weeks ago the hawkish anti inflation comments made last night by Chairman Powell would have spooked markets, but in the new year a commitment to fighting inflation and implicitly therefore raising interest rates further for longer has been well received in the markets. Not even JPMorgan’s Jamie Dimon calling the top […]