SGM-FX insights

Bank of England As expected the Monetary Policy Committee left UK interest rates unchanged following yesterday’s  50 basis point cut in the USA and last week’s 25 basis point cut in the EU. Inflation at 2.2% is creditable given where it has been and for the moment it looks unlikely that the UK will cut […]

The Market MarchThe wait is over. In their much-awaited September monetary policy decision, the Fed has opted for a 50-basis point (0.5%) cut to benchmark interest rates in the USA. Even with the hindsight of the Fed’s explanation for its decision and the comments that accompanied the publication, it is hard to feel the Fed […]

EU Business Sentiment Looking at the overall EU business sentiment, the Germany ZEW business sentiment mirrors it: both are at a 1 year low. Maybe just maybe later today the Federal Reserve could deliver a shot of adrenaline to the US and by inference the global economy with a big booster of a cut. Meanwhile […]

Second thoughts With last week’s all-important data providing what can only be described as a mixed picture of the US economy, markets appear to be having second thoughts over the Fed’s meeting this week. With a heavy focus on the labour market over the last few months, it seemed last week that fears of excessive […]

China A snapshot of China today gives more than a strong indication of the likely effect on the rest of the world’s economies. In August, China had record breaking temperatures – the highest for 60 years which was further exacerbated by thunderstorms which affected agriculture sending vegetable prices 22% higher than 1 year before. Despite […]

US Presidential Race Never mind Monday’s TV debate that saw Kamala or Calm La Harris land some well judged blows on Donald Trump, the news afterwards about Harris securing the endorsement of Taylor Swift may well be seen as a if not the turning point in her path to the White House. Swifties are numerous […]

At face value much of the price action during yesterday’s session seems illogical. Whilst trying to provide some kind of explanation to these trading patterns, it must still be admitted that many moves yesterday were asymptomatic of the dominant news flow. Two of the stand out moves from yesterday’s session were gains within the US […]

The focus of next week’s Bank of England-BoE decision will not just be about benchmark interest rates. At a time when central bank meetings are most often scrutinised for clues regarding the outlook for domestic interest rates, this particular BoE meeting will have an important distraction. The next monetary policy decision is due next Thursday. […]

French Parliament  Some more examination of President Macron’s appointment of Michel Barnier as his Prime Minister reveals more about the calculation behind the decision. Nothing to do with MB being known for being dull, nor for organising the 1992 Winter Olympics in Albertville and not even for his more recent role as EU Brexit negotiator. […]

Oil Why is oil at the year’s low? Look no further than the litany of reasons affecting the market as a whole. In no particular order: economic slowdown in China; vertiginous drop in Nvidia share price; disappointing economic releases in the USA particularly on Jobs and Manufacturing and last for good measure the expectation that […]

Two tales of a weaker Dollar As the week that should decide the fortune of the US Dollar continues to unfold, this brief looks at the two very different legacies of a weaker Dollar. For emerging markets-EM and other high beta currency classes, a weaker Dollar can both act as a tail wind and a […]

US Dollar With Chairman Jerome Powell’s “the time has come” speech at Jackson Hole, Wyoming USA the direction for USD in the next four months is down versus GBP, EUR and JPY. So far so easy in the fraught game of FX forecasting, but it would seem that Chair Powell has concluded that US interest […]