SGM-FX insights

Chinese Electric Vehicles When the news of the EU slapping additional tariffs on imports of Chinese EVs from the current level of 10% this week, there was a sense of inevitability but not a widespread appreciation of the quantum: some Chinese EV imports will attract an additional tariff of over 38%. China needless to say […]

Eclipsed The message from Jerome Powell last night was on the whole unequivocal. In the face of higher inflation, the Fed expects to take a more conservative and cautious approach to monetary policy adjustment. In doing so the dot plot showed just one rate cut would take place this year should the median policy path […]

Joining David and Michael in the Capital.com studio this week is FX expert Humphrey Percy. With over 40 years of international banking experience, he has worked at the likes of J. Henry Schroder Wagg, Barclays Bank Group and WestLB, holding positions including CEO, Managing Director, General Manager, and Head of Global Financial Markets. Humphrey founded […]

UK Election Landslide As we are being told that it is game over for PM Rishi Sunak, it is worth taking a look as to what that would mean for markets with an incoming Labour Government for the first time for 15 years with a large majority and an untested cadre of top leaders. Deep […]

All in (except Macron?) The results of the European Parliamentary elections have hit the Euro hard. Key crosses including EUR/GBP and EUR/CHF as well as the barometer of EUR/USD all trade lower, reflecting a weaker Euro. A greater than expected rise of populist voting habits across the continent has increased perceived political risk within Europe. […]

Vigilance, Commitment and Perseverance Those are the requirements from ECB President Christine Lagarde for Europe to win the fight against inflation. What is conspicuously missing is an indication of the likely timing for the next cut in EUR interest rates, but it will not be at the time of the next ECB meeting in July. […]

ECB As was widely expected, the European Central Bank duly cut its deposit rate by 25bps from 4.00 to 3.75% yesterday lunchtime. Despite inflation being forecast to remain above the key target rate of 2.0% well into 2025 and currently standing at 2.2%, the ECB went ahead with the President, Mme Lagarde strictly pronouncing at […]

Feathering the brakes or cutting the lines? Today the ECB will deliver to markets its latest monetary policy decision. A press conference will follow the decision which will see journalists probe the President for information regarding the path of future policy adjustments. Today’s decision will take place within a market that has already fully priced […]

European Elections Traditionally European voters are decided on how to cast their votes well in advance of polling day, right? Wrong: in most cases and for example while worth looking at Malta where only 5% make up their minds in the last few days, at the other end of the scale in the Netherlands where […]

Skewed risks US core PCE data was released on Friday. Mildly softer inflation has allowed some limited US Dollar selling pressure. Due to revisions in US rate expectations, risks to the US Dollar that are driven by inflation publications are significantly skewed towards soft inflation releases. Friday’s data showing 0.2% month-on-month core inflation therefore caught […]

British Pound As the main global economies reported on inflation last week, analysts are drawing some high level conclusions: inflation remains stubborn which reduces the probability of the number of rate cuts this year expected three months ago. Consumer sentiment remains strong in the USA. Europe has declared that it is not constrained by other […]

Currency Volatility Recently we wrote about the possibility of market volatility arising from the elections and their outcomes that will take place around the world over the next 6 months. Looking at the DB Index of FX Volatility which currently stands at 6.3, it is more than worth noting that the 5 year average is […]