SGM-FX insights

What if economics doesn’t work? Forgive another briefing on interest rates. However, as part of our offering as your eyes and ears on the FX market, it’s important we bring you coverage on those topics dominating market discourse. Unfortunately, those not too fond of monetary policy and economics might find the market’s latest fixation on […]

UK Interest Rates A big week for the Monetary Policy Committee at the Bank of England which will meet and pronounce this Thursday: while the general expectation is for a rise of 25bps, there are plenty of hardliners who are calling for a draconian 50bp rise and of course there are still the doves who […]

European Central Bank Yesterday’s decision by the ECB to raise rates by 25bps was no surprise, but the closely watched language around the announcement did gain the attention of market watchers. Casting our minds back to the seemingly long ago June ECB meeting, the language then was around more interest rate rises required in subsequent […]

Fed up, ECB up? Despite last night’s Federal Reserve decision still ringing in the ears of markets this morning, there will be little respite. With the ECB decision only a few hours away, markets will remain attentive. Summer trading conditions have hampered volatility but this could show signs of stress should any surprises be concluded […]

UK Cost of Government Debt For 2022 the UK has achieved the dubious distinction of being the leading developed nation when it comes to the costs of servicing its debt at GBP 110 billion or 10.4% of government revenues. To give an idea of the perils of group think on boom bust and by implication […]

Another datum, another dive We are entering the phase where politicians are obscuring their eyes behind their palms, but central bankers begin to sweat a little less. ECON101 will tell you that monetary policy is faster than fiscal policy to have an impact on the economy, but you’ll never find someone boasting about how reactive […]

Russia and Ukraine The decision by Russia to withdraw from the global wheat deal is yet another challenge for global central banks in their fight against inflation: the knock on effect will likely lead to a secondary round of price rises of other commodities. In particular oil and also fertilizer, as Russian as well as […]

Wheat Following Russia’s actions this week to threaten to fire on ships collecting grain from Ukraine plus its bombardment of the port of Odessa, wheat prices have risen 8%. Realistically the only meaningful export route from Ukraine is by sea since the amount that can be transported by train is relatively small due to capacity […]

The crunch Was yesterday the crunch point for GBP that we will be referring back to for several months? Quite possibly, is the answer. Readers of the daily briefing and our clients will likely have shared conversations with our front desk of a forthcoming crunch point in Sterling markets. We have been suggesting that the […]

USD, EUR and GBP With the USD index which measures the currency against a basket of 6 currencies falling 0.15% to 99.753 to a 27 month low at the beginning of the world’s trading day yesterday in Asia, it would look like the USD will remain under selling pressure in the short term as markets […]

UK Data Check Tomorrow morning, ahead of market open, UK inflation data will provide in the latest meaningful metric for which to adjust GBP forecasts. We have seen inflation data remain stubbornly high in the UK recently, at a time when inflation rates are beginning to falter in other geographies. Tomorrow’s reading may therefore hold […]

USD Carry Trade With the USD currency basket down 13% since last year’s 20 year, it is worth dusting off the impact that the move is having on risk assets including emerging markets and the attractions of the carry trade where investors sell USD and buy higher yielding currencies. For example such a move into […]