SGM-FX insights

Bank of England As expected, the Monetary Policy committee voted 6:3 to leave rates unchanged – for the avoidance of doubt that sizeable bloc of 3 voted to cut interest rates yesterday. That split reflects the dilemma faced by the Committee and the UK perfectly: growth is sluggish after a fairly decent 0.7% uptick in […]

Top Trumps Geopolitical risks are outweighing macroeconomic fundamentals in today’s markets. We can see this very clearly from the muted reactions in price being generated from major macro events including data and interest rate decisions. The same holds true of the Fed’s interest rate decision where markets barely blinked at a Fed that had changed […]

US Dollar All the talk of the USD having had its day may be gaining in credence every day that goes by with the POTUS and his Administration seemingly determined to dismantle the post WW2 global currency order and depreciate the USD, but most people operate in a much shorter timeframe than the time it […]

Pressure builds on the Fed On the face of it, you might think that the Fed will be in an easier position tomorrow than it was at its last decision in May. There still remains a lot of pressure from the White House on the Fed to cut rates. However, baring catastrophe in today’s session, […]

Oil Supply With Friday’s rocketing up in the oil price of 12% to $78, the question is whether that is it and we have just seen a re-set or whether this is the first staging post in a much larger increase. That, of course, depends on the unfolding Israel-Iran attacks and whether that conflict spreads […]

British pound Sterling finds itself in the limelight and trading at its recent highs as somewhat improbably a couple of bolder market commentators have suggested the UK will benefit as a result of the disaffection with the USA and the USD at present. Those commentators have obviously not been following the commentary about UK Chancellor […]

Deal or no-deal? Talks have concluded between the US and China in London. President Trump has welcomed the deal, claiming the US has secured access to rare earth materials and tariffs have returned to sustainable levels. However, the announcement of a resolution during talks has lacked two key elements that are leaving many scratching their […]

UK Employment Real life consequences of policies that fulfil Chancellor Reeves’ agenda: this time we will not dwell on the plainly evident politics of envy stuff about targeting the higher earners, stuffing the non-doms, and even deciding to double tax those wishing to pay for private education or invest in property through second homes. This […]

Fading Dollar weakness The market is beginning to take risk in its stride once again. We can see that from benchmark equity indices retracing all time highs, particularly cross border asset baskets. Realised volatility within FX and fixed income is coming in below implied volatility and in turn reducing the cost of optionality. There remains significant […]

Germany In a scenario similar to those Germans bagging poolside sunloungers by getting up early, the German economy had a more than decent Q1 as the canny Germans got in ahead of the TT or Trump Tariffs. However, it has all come to a juddering halt in April as almost all economic indicators fell back […]

Euroland Interest Rates Appropriately for ECB meeting day, the EU occupies much of our commentary today. Ahead of their deliberations, the ECB council members were faced with an environment of sluggish growth and low energy costs and a strong EUR keeping a lid on price pressures, leading to lower inflation but leading inevitably to lower […]

Ring Ring A deal between the US and China on trade still proves to be illusive. The 90-day truce that both sides negotiated at the beginning of May allows for a further two months of negotiating before the deadline becomes a real risk. However, what has likely concerned the market meanwhile is the lack of […]