SGM-FX insights

Data Update: UK Inflation Mixed messages for the UK macro economy were received once again yesterday. As the July inflation figures were released, it was clear that there wasn’t going to be one decisive narrative that would emerge as to whether the reading was supportive or destructive to the view that inflation is cooling in the […]

Zhongrong International Trust ZIT is one of China’s leading wealth management company and in case you have not yet picked up the news, it has missed payouts on some of its high yield products. This is causing worries for the health of the overall Chinese fund management industry and understandably the fear of contagion given […]

Intervention in the air Over the past 24 hours there has been a lot of talk of intervention and currency management within the market. Besides the Yen whose yield curve control debate has been dominating headlines for some time now, Argentina and Russia are in focus for the potential to take an active management role […]

Poland While some countries (the UK for example) agonise over the wording of a referendum question often ending up with a bland and neutral sentence, Poland has no such inhibitions. It is worth repeating the government’s imminent proposed question in full: “Do you support the admission of thousands of illegal immigrants from the Middle East […]

US Inflation A collective global sigh of relief to see US inflation rise just 0.2% in the month of July and on a year on year basis by 3.2% in the year to July. At the same time there were 187000 new jobs created in July which is the second smallest rise since December 2020. […]

A closer look Having signalled the importance of the US data due to be released today, it’s time to take a closer look at what’s expected. With significant US bond auctions still taking place this month, market attention to US treasuries still remains as close as ever. Today’s data will be seen as perhaps not […]

UK Retail Sales Sluggish July sales due to bad weather and caution caused by poor inflation figures meant that while an increase of 1.5% versus July one year ago was recorded, in real terms after allowing for inflation, that represented a fall. While this may have been an excuse to sell GBP, in fact looking […]

Positioning At least within the G10 space, there has been a lack of conviction behind FX positioning of late. In line with the elevated levels of volatility that we have been seeing, the volume of contracts outstanding and positioning within major FX pairings has been underwhelming. However, as central banks now begin to curtail their […]

Germany : Slowcession. The Germans have form when it comes to coining words and phrases to capture whatever is current at the time. In 2023 it is “slowcession” which is the no-man’s land between slow growth in the economy and a recession. Germany is currently laboring under annualised 6.2% inflation versus 5.3% across the Eurozone. […]

UK Interest Rates As expected by 66% of economists polled, the Bank of England duly raised rates by 25bps; 34% anticipated a more draconian 50bp rise. Little or nothing is written these days about the Governor of the Bank of England being required to write to the Chancellor of the Exchequer to explain when the […]

This week’s only just begun. Despite summer trading conditions very much taking hold of markets, there has been sufficient data and enough market-sensitive headlines to move some spot FX markets. For example, the data observing the German labour market this week provided sufficient doubt to question some of the Euro’s recent declines and relieve some […]

UK House Prices Much being made of the fact that UK house prices have fallen 3.8% in the year to July. More seasoned commentators are doubtless thinking that firstly it is surprising for now at least that they have not fallen further, and secondly that they will have further to fall as the multiple interest […]