SGM-FX insights

Not quite 10 Data was expected to be particularly important to GBP this week. On Tuesday, the market observed the latest UK wage data which showed unexpectedly high growth figures within household earnings. This has set the stage for concerns surrounding a miss in inflation too, with wage price inflation often having a significant influence […]

UK Job Market  In the quarter to end February in the UK 220,000 more people were looking for jobs than in the previous 3 months even as the number of vacancies fell from 1,250,000 to 1,100,000. This means that the economic uncertainty is making people seek income. So even before PM Sunak called for UK’s […]

May Meetings Between now and the first two weeks of May, there will still be a number of good opportunities for price adjustment. However, given the data calendar and current market positioning, it seems most likely that such volatility would be driven by investors’ expectations surrounding the set of central bank decisions in early May. […]

US Dollar Eye catching statements from President Lula of Brazil regarding Brazil supporting China in its call for the replacement of the US Dollar by so called de-dollarization with, funnily enough, the BRICS currencies ie Brazil, Russia, India, China and South Africa. Far be it for us to point out the obvious but Russia is […]

UK Growth: February 2023 It is fair to say that this piece could be rather short since the UK economy has not grown at all in February with strikes being given as the prime reason. Maybe it is therefore unsurprising that UK Chancellor Hunt has been very quiet since his Budget Day performance in March. […]

Minutes and data Yesterday saw the release of Federal Reserve minutes as well as the latest US inflation data. Both publications had been eagerly awaited by the market. The minutes were closely watched for their ability to confirm Treasury pricing and provide a control to traders’ understanding of sentiment at the Fed. Inflation data of […]

IMF The International Monetary Fund pronounced in a popular way for a change yesterday, announcing that interest rates would only remain high for a short time and indeed the level of interest rates would revert to pre-pandemic levels. No mention of when that might be, but nevertheless providing some cheer. Naysayers might understandably point out […]

Isolated treasuries Several weeks ago, treasuries at the short end of the curve fell by around one percent within only a small handful of trading sessions. This meant that the valuations of US national debt due for maturity within a couple of years went up in value and much more violently than such instruments are […]

Changing the guard This weekend will see the handover in Governorship at the Bank of Japan. Because of the collapse and speculation surrounding the Japanese Yen and Japanese bonds since the end of last year, the changeover at the BoJ has been watched closely. Kazuo Ueda will assume office and be immediately confronted with the […]

British Pound Some chilly pre-Easter sunshine in London yesterday for GBP which for the first time since last year breached GBP/USD 1.2500 and managed to improve versus EUR with GBP/EUR 1.1445. Other green shoots with GBP/ZAR 22.25 and a weaker Aussie with GBP/AUD 1.85. (See below as to why Aussie weakened) Australia Not content with […]

They’re all at it We have been used to the protagonist of central bank hawkishness being the United States. With this week ahead of Easter only a day or so old, it is clear that the narrative so far has evolved to focus upon the rest of the world. So far this week we have […]

Markets As we start the first week of April that includes the end of the UK tax year, it is a good time to take stock of the markets as we embark on Q2. Starting with 10 Year Government Bond Yields, both the US and Uk are at 3.47%, Germany at 2.28% and Japan at […]