SGM-FX insights

China: the great leap forward On reports of the Chinese government’s president Xi arranging talks with the regulators and an imminent policy adjustment to offer relief to the beleaguered Chinese equity market, Chinese equities had their best session for 14 months yesterday.USD/CNY 7.1880. Australia Meanwhile the Reserve Bank of Australia held rates steady-no surprise- as […]

Make your mind up Sterling wasn’t excessively punished during last week’s monetary policy decision. Despite the majority of the Committee voting to keep rates on hold, including Governor Andrew Bailey, there were three dissenters. It’s not uncommon to have outlying votes even within the small Monetary Policy Committee of the Bank of England. However, those […]

US Jobs Friday’s US jobs figures that showed an increase of 353,000 jobs which was almost exactly double what was expected has poured more than cold water on the argument for the first US rate cut happening next month. With wage inflation at 4.5%, the fear that the present level of interest rates is curbing […]

Bank of England To absolutely no-one’s surprise the Bank of England left rates as they were yesterday at 5.25% and Governor Bailey said they needed more data before cutting rates. Critics of the UK Monetary Policy setting unit will soon be accusing the Bank of being too slow to raise rates when inflation took off […]

Hat trick + 1 Yesterday’s was the fourth straight Federal Reserve meeting that has seen the FOMC hold rates at highly restrictive levels. Since the hiking cycle concluded last year, market attention has inevitably focussed upon how rates may be normalised from here. The job of the Fed has been to sustain health interest rate […]

Eurozone At the beginning of 2023 the ECB forecast was for the Eurozone to grow by 0.5%: hardly earth shaking but in the circumstances following the interest rate rises and the rocketing energy costs in 2022 and not at all to overlook the war in Ukraine, understandable. With no sense of schadenfreude -or the enjoyment […]

Stock check I know, I know. The new year celebrations are still so close in the rear-view mirror how could a whole month have possibly passed? Well, it almost has, and the passing of month end tomorrow will also bring with it new forces into the market. As far as seasonal effects are concerned, January […]

US Treasury Bonds With $34 trillion of debt the US Government has to run fast to keep up as it keeps increasing given the cost of re-financing the debt.  This week the US has auctioned $61 billion of 5 year debt and $ 60 billion of 2 year debt. In April the USA is looking […]

ECB President As predicted, Mme Lagarde, President Christine Lagarde yesterday stuck to her existing line that it was all much too early to talk about interest rate cuts in the Eurozone. The market or rather 60% of those polled are holding out for the first such rate cut occurring in April. Maybe that 60% should […]

UK Election The current political situation in the UK is delicate. Fortunately, by contrast to the often calamitous moments of the Johnson and Truss eras of governance, political risk is being somewhat overlooked. We are likely in an election year in the UK, at least that’s what the Prime Minister has recently told us. A […]

Question Without wanting to sound alarmist the question is whether markets have factored in the geo political risks present due to the conflicts in Eastern Europe and the twin conflicts in the Middle East which are overlaid by the vast number of general elections scheduled for 2024. Maybe a better way to express the question is […]

BoJ: could we have expected more? With a relatively light economic calendar so far this week, the BoJ’s monetary policy decision overnight stands out as a major event. As always, the divisive monetary policy approach taken in Japan led to debate over whether a change of course will be offered. Hopes that the new governorship […]