SGM-FX insights

US Interest Rates and Oil No room for errors is the mantra that has dawned on the market as the effect of having been so exuberant about the path of US interest rates in 2024. In the same way that fears of an escalation of disruption in the Red Sea of oil shipments by the […]

Did we forget CHF? With the sudden pivot by the Fed in mid-December, it has been easy to marginalise otherwise high salience events. One such largely overlooked development has been within Switzerland and its Franc. The Swissy has been a key currency as it has been one of those major currencies undertaking a program of […]

US Dollar and Markets USD generally weak in thin markets and the EUR strong at EUR/USD 1.1040 and EUR/JPY 157.40.Gold at $2066.Brent Oil $81.10 as the markets watch the Red Sea and the Houthis with trepidation. One oil fact for 2023: Russia sold half of its entire oil production to China. Another reason why the […]

A Tale of Two Cities Very early yesterday morning Lloyds Bank of the UK released the results of its Business Confidence Survey and it is fair to say it was more Bah Humbug than full of seasonal cheer since it showed the largest monthly fall since August 2022 down from 42 to 35. Meanwhile the […]

How to tighten without tightening As the ECB learned last week, the easiest way to de facto tighten policy is to allow others to do it for you. At the press conference last week, President Lagarde did not reveal similar vulnerabilities to the ECB’s monetary outlook as the Fed had done the evening prior. The […]

Oil Prices So far the attacks on ships in the Red Sea have had a muted effect on the oil price with Brent rising just 1%. However with more shipping lines holding shipments and re-routing them around the Cape of Good Hope, the likelihood of the extra 3,500 nautical miles and 10 days sailing time […]

Will there be a last Hoorah? Each December there is a moment where the final risk adjustment of the calendar year takes place. Some in recent memory have been particularly violent and often late. In 2020, the Brexit deal stuck on Christmas Eve saw a particularly sharp adjustment with markets preparing for a new framework […]

GBP strong for long? To begin with GBP is at its highest level since July this year when it briefly marched up to GBP/USD 1.31 and the reason for that is that the market has bought into the argument that the Bank of England will keep interest rates higher for longer. On that basis, holders […]

Central Economic Work Conference The CEWC is China’s closely watched economic policy setting committee which this week was chaired by President Xi. An economic growth rate of 5% has been set for 2024, but a more realistic target according at least to Western analysts is 4.5%. While still healthy in comparison to near zero to […]

Okay.. for now The Federal Reserve delivered its latest monetary policy decision last night. After months of huge deliberation over very little fresh inflation, it appears the Fed has finally caved to the market’s pricing and rhetoric. Following last night’s decision, the Dollar is trading at least one cent weaker within major crosses. That sell […]

UK Interest Rates This comes under the heading of do not shoot the messenger: the market believes that rates will/should be cut sooner rather than later. The Bank of England is making it clear that its Monetary Policy Committee will not be so easily swayed. Why? If you have not spotted it, it is largely […]

Higher for longer The message that most central banks have been trying to push throughout their hiking cycles has been to expect rates to rise and remain elevated. It is the ultimate level of rates more than the speed at which they rise that determines how the economy receives monetary tightening. At least in the […]