SGM-FX insights

British Pound Some chilly pre-Easter sunshine in London yesterday for GBP which for the first time since last year breached GBP/USD 1.2500 and managed to improve versus EUR with GBP/EUR 1.1445. Other green shoots with GBP/ZAR 22.25 and a weaker Aussie with GBP/AUD 1.85. (See below as to why Aussie weakened) Australia Not content with […]

They’re all at it We have been used to the protagonist of central bank hawkishness being the United States. With this week ahead of Easter only a day or so old, it is clear that the narrative so far has evolved to focus upon the rest of the world. So far this week we have […]

Markets As we start the first week of April that includes the end of the UK tax year, it is a good time to take stock of the markets as we embark on Q2. Starting with 10 Year Government Bond Yields, both the US and Uk are at 3.47%, Germany at 2.28% and Japan at […]

European Gas Prices Six long months ago the cost per MegaWatt hour of European gas was EUR175. It now stands at EUR 44. Good news but core inflation in the EU still remains stubbornly high.  German inflation for example stands at approximately 7% which is not what was predicted by the ECB and not the […]

Breathing room, but not much Following Jay Powell’s recent private testimony to lawmakers, the market’s belief in the Fed’s conviction to stay the course on tackling inflation is rising. The testimony to lawmakers saw the Chairman confirm that dot-plot released during the latest Federal Reserve decision represented a fair summary of the view at the […]

UK Food Inflation If you doubted it, the evidence is there to see: food prices are at an all time high and a large part of the problem is sugar which is up 9% in the past year. Despite victory on inflation being declared in some quarters, the food inflation index has not received the […]

Rebalancing Month end, quarter end and financial year end for many UK companies is drawing closer. The financial flows that the conclusion of such periods can bring to markets can create significant price instability. More often than not, at least in recent history, those flows have delivered a premium to USD. However, there is a […]

US Interest Rates A frisson running through the Chartists among market operators due to 10 Year US Treasury yields having declined to 3.38%. By monitoring patterns and comparing those patterns to historical bond movements they have deduced that US interest rates have topped out and it’s all downhill yield wise from here. The final factor […]

Bank of England When the Monetary Policy Committee raised interest rates yesterday by 25bps, that was broadly expected since the concerns about the health of the banking system had largely receded -at least in the UK. What was not expected was the leading once again with the corporate chin by the Governor with the pronouncement […]

Testing conviction With a Bank of England decision scheduled for later today and a Federal Reserve decision last night ringing in the ears of markets, traders should be braced for volatility. The decision last night by the Federal Reserve showed the FOMC treading a delicate path between demonstrating their commitment to taming inflation but being […]

Bank of England The UK’s Monetary Policy Committee will pronounce tomorrow and uppermost in their minds will be the UK Inflation release which came out first thing this morning. Because it is higher at 10.4% rather than significantly lower than last month’s annualised 10.1%, not only does the Bank of England have more egg on […]

Minsky Moment There has been a lot of attention paid to the increasing divergence in economic forecasts produced by analysts and policy makers. We know that the source of this diverge is uncertainty. The incomplete puzzle of the unfolding post-pandemic economy is leading to vastly different forecasts from largely similar financial contributors. The evolution of […]