SGM-FX insights

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 […]

Big Week With news about the arranged marriage of Credit Suisse to UBS announced on Sunday night following the bank’s CHF 50 billion liquidity line injection last week, repercussions from the failures of SVB and Signature Bank and fears for First Republic Bank despite a USD 30 billion multi bank rescue, expectations for a 50 […]

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 […]