SGM-FX insights

US Interest Rates Federal Reserve Chairman Jerome Powell has not so much hidden behind the data at the economic summit in Sintra, Portugal yesterday but rather deployed it as a weapon against those baying for rate cuts: with inflation still half a percentage point above the target level on the Personal Consumption Expenditure index which […]

First Round Voting The first round of voting in the French general elections has passed. With it, a composed market has had a chance to analyse the prospect it once feared above all others in French politics: a possible win for the National Rally. However, with the Euro gaining ground and no sign of a […]

USD/JPY As we have written recently the Japanese Yen is on a 38 year low versus the USD. This past weekend has seen a number of comments from the Japanese authorities along the same lines as at the beginning of June when the currency pair stood at 155. The reason this is noteworthy is that […]

French Consumers In a word, they are pessimistic with leading concerns being that in the very near future their standard of living will fall, they will be able to afford to spend less and lastly that their job security will be reduced. Sunday’s French election sees the New popular Front Alliance made up of the […]

Taking profit? Looking at the data calendar, yesterday should have been a relatively quiet day for markets. Limited central bank speak, little in the way of salient statistics and limited opportunity for macro headlines was the order of the day. Despite that set up, significant moves in the US treasury market created a spillover into […]

UK Labour Government Assuming that a new Labour Government comes into power on July 5 which is becoming daily more apparent, it is still even at this late stage hard to see how the new government will act in respect of the detail behind the platitudes that have been trotted out to date by the […]

Hiccup or more? A build-up of risk is driving stresses in markets. We have seen many such episodes in the post-Covid market and rising risk premia is certainly not something new. However, it is always prudent to question whether stresses in markets are the start of something greater. Risk premia in FX has built up […]

Balkans integrated power network That’s the beauty of the Balkans when it comes to their individual power networks: each country is connected to the others which allows them to manage surplus electricity. So far so good. On Friday all those countries found out what happens when there is a surge in demand caused by 40c+ […]

Currencies on the Move USD up due to Switzerland cutting its rates again and a fall in GBP after the widely expected announcement yesterday lunchtime by the Bank of England of no change contained wording that the market has taken as a promise to cut in August. All that plus the ongoing France debt and […]

Fiscal handbrake France, Belgium, Italy, Hungary, Malta, Poland and Slovakia. All of these countries were identified by the European Commission’s report as having broken fiscal deficit rules. As a result, each of these countries are now subject to excessive deficit procedures. With so many nations having fallen foul of the Union’s standards for fiscal sustainability, […]

British Pound Somewhat in the doldrums as the market awaited this morning’s inflation figures and tomorrow’s interest rate decision. Truth be told, it is the inflation figure that is keenly awaited rather than the rate decision which is not expected to result in any move by the Bank of England. GBP/USD 1.2680. Reform UK Listening […]

Investment The composition of foreign investment plays a significant role in aggregate foreign exchange flows. All investment levels are important when considering the propensity for growth within a given economy. But overseas investment has a more direct impact upon the FX market. Typically, in good times, you can observe a higher allocation in favour of […]