SGM-FX insights

European Central Bank Doubtless the ECB wished that their awaited meeting and press conference had not been scheduled to take place yesterday given the fragile state of global markets. Although an improvement on the febrile atmosphere earlier in the week following the affirmative and decisive action from the Swiss National Bank in providing a USD […]

David and Goliath Yesterday’s FX market was characterised by heavy Euro weakness and a surging US Dollar. The only discussion taking place in the market yesterday, aside from a minor distraction in the form of Jeremy Hunt’s budget, was Credit Suisse. So, can the Goliath of the US Dollar really be undermined by a single […]

US Consumer Price Index Yesterday’s release must rank as one of the most closely watched numbers for many years given the Federal Reserve’s rhetoric, in the context of its rate rising policy, the mixed US economic picture and now the banking contagion fears following the failure of 3 sizeable US banks. Before the release, expectations […]

Fed’s pickle The Federal Reserve is meeting next Wednesday for its latest monetary policy announcement. Focus upon the event has been immense. However, given the turmoil in the financial sector created by the forced sales of both Silicon Valley Bank and Signature Bank last week, speculation over the rate decision has been increasingly predicated upon […]

Is the US already in recession? Due to the mixed messages from recent economic releases on the state of the US economy with for example record low unemployment while at the same time there is increasing data on lay offs especially in the tech sector, it is worth asking the question: Is the US already […]

British Pound A better day for GBP as Sterling clawed back almost half of its losses from earlier in the week. Following Federal Reserve Chair Powell’s comments on higher for longer US interest rates on Tuesday, the USD strengthened sharply at the expense of all currencies and was then evidenced by a sickly looking GBP. […]

Inflation now, (no) growth later When you tame inflation by using monetary policy you are influencing the demand function within an economy. By tightening monetary policy, you can by definition only constrict the available capital within an economy and therefore attempt to reduce demand and spending. There is no expected constructive supply side adjustment to […]

British Pound In itself not really a story but when a Member of the Bank of England’s Monetary Policy Committee opines on the UK currency, the market reacts. Yesterday it was the statement that if investors had not fully priced in the likelihood of further interest rate rises from both the Federal Reserve and the […]

New Governor in town The Japanese Yen has attracted a lot of economic commentary over the past few months. The Yen had been losing significant ground on markets as the Bank of Japan clung to ultra-loose monetary policy. Even in an environment of rising global inflation, the central bank kept rates low and kept the […]

US Employment Fasten your seatbelts for a big week on the US jobs front. After 517,000 new jobs were created in January, the expectation is for February to reflect growth in jobs but much less-200,000 in fact. At present US unemployment is at its lowest level since 1969 so the argument that the Federal Reserve […]

US Treasury Bonds With the 10 Year now back over 4 at 4.07% and the 2 Year at 4.90%, the market has in the past week or so moved dramatically and is now anticipating the Federal Reserve to err on the side of caution and do what it has in fact been saying for the […]

Deciding not to decide Just because there isn’t a rate decision in the UK due for some three weeks yet hasn’t stopped interest rates having a decisive impact upon Sterling crosses in the FX market. In fact, the weeks between monetary policy decisions present opportunities for many policy makers to give speeches or publications where […]