SGM-FX insights

Just in time? As we wrote yesterday, the latest US government shut down has become the longest in history. The impact upon sentiment and consumption is sure to have been significant but it is too early to identify from the data just how much damage was done. Thanks to the eight democrats who have broken […]

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 […]

Grinding lower The key currency pairs of GBPUSD and EURUSD continue their slow but consistent grind lower. This story is not just one of dollar strength but also a rotation away from GBP and EUR, in favour of safe havens. Under performance in global equity markets continues to be a factor behind the market’s general […]

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 […]

One in three Until recently, the market had held the probability of a rate cut at the Bank of England’s November meeting at near zero. Above-target inflation and insufficient evidence of faltering economic growth alone suggested the BoE would continue to adopt a wait and see approach. Combine that with the uncertainty of the UK […]

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 […]

Two cuts down The Federal Reserve cut the target Fed funds rate by 25-basis points again last night. This brings the benchmark range down to a 3.75-4% banding. This move had been widely expected, but that does not mean it did not have any market impact. As of market open today, the dollar continues to […]

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 […]

A glimmer of (European) hope The ECB has made significant progress in cutting rates towards an accommodative level. The Eurozone saw evidence of cooling inflation much sooner than many economies and has been able to respond accordingly, cutting the deposit rate to 2%. The ECB will meet again this Thursday to publish its latest monetary […]

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 […]