SGM-FX insights

The same old problem The continuous evolution of and speculation over the peak of Federal Reserve interest rates has continued to wreak havoc upon emerging market currencies and assets. Due to the preeminence of the Federal Reserve, it can frequently be read as a proxy for global rates. As we have spoken about recently, the […]

Federal Reserve Chair Jerome Powell gave a speech in Washington last night that further confirmed his hard line thinking: US interest rates will need to go up more and probably it will take two separate rate rises to see if that is sufficient-the clear implication is that if it needs more, then that is what […]

Never a dull non-farm Non-farm payrolls data almost always provides the observers an opportunity to witness and potentially trade with some volatility in the markets. More often than not the salience of the event and the mixed expectations moving into it leads to more price fallout from the noise generated from the event instead of […]

US Economy The US job figures on Friday most certainly set the cat among the pigeons: with non farm payrolls expected to be up by 187,000 and the market’s expectation that Chairman Powell of the Federal Reserve was talking the talk rather than walking the walk when he had said last Wednesday that rates were […]

UK Housing Market Plenty of comment about the UK’s housing market and where it is headed, but maybe it’s time to boil down the essentials for the next year: with rates higher and unemployment likely to rise, conventional wisdom suggests that the housing market will fall. However, there are two key differences to recent previous […]

Blinkers Today is the day that the ECB and Bank of England meet. Spreads in the spot, forward and options markets are all reflecting a degree of uncertainty and exhibiting volatility already. As we have mentioned, both central banks are widely expected to pursue a 50-basis point hike but the higher conviction call within these […]

Central Banks and Cost of Borrowing Drivers The two principal levers used by central Banks are monetary policy and the setting of interest rates and the management of their balance sheets. With a move towards tightening ie higher interest rates and the reduction in balance sheet holdings, the snag is that despite some encouraging signs […]

A big week indeed Normally the first week of any new month is relatively significant. There is typically an above average volume of data releases with the notable non-farm payrolls in the United States normally the figure analysts are looking out most closely for. February will prove to be no exception with a significant load […]

Global Trade Trends Following Covid, Lock Down, Supply Chain issues and the trade war between China and the USA, while globalisation may not have ended, it is being replaced in significant part by what some economists are naming fragmentation which is the handle given to countries moving production of goods to manufacturing centres nearer to […]

Inflation With markets as ever getting ahead of themselves by many having decided that the inflation peak is a yesterday thing, there is a dawning realisation that with the current levels of USA 6.5%, 9.2% UK and 10.4% EU as at Dec 2022, inflation is not only well above target of 2% but is still […]

Will they, won’t they It’s one week to the day until the next Bank of England decision. It will prove critical to the value of GBP and perhaps prove to be a defining feature of the currency market for at least the first quarter of this calendar year. Bank rate in the UK currently sits […]

UK Government Borrowing By Numbers Many people have a disconnect when it comes to linking government finances with their own-bring on the idea of teaching finance as part of the school curriculum-however, yesterday’s release showing the government borrowing figures fall into the category of both attention grabbing but so eye watering that many will likely […]