SGM-FX insights

A risk to cable The sequencing of rate cuts will be a huge driver of FX pricing this year. As we saw several years ago as we approached this latest hiking cycle in the face of rising inflation, those central banks swift to raise rates were at best rewarded and at least spared the slings […]

US Interest Rates As we begin the first full business week of 2024, let’s recap on where we reached on interest rate reduction expectations for 2024 before the start of the Christmas break: 6 cuts were predicted. Then there was an early New Year wobble that saw markets sell off and those 6 became 3 […]

UK report card as at end of 2023 As we embark on a new calendar year, it is timely to take a snapshot of where the UK stands economically and also where it is versus other G7 countries.InflationUK 3.9% versus EU at 3.1% and USA 2.1%Interest ratesUK 5.25% versus EU at 4.50% and USA 5.50%Growth […]

Wait a minute(s) If mid-December isn’t far too long ago to recall following the festivities, you will remember the Federal Reserve’s decision as the catalyst for the latest leg lower in the Dollar. This was largely because the market saw the Fed blink in both its rhetoric and projection surrounding rate cuts and the need […]

US Equity Winners and the USD in 2023 By some distance the Nasdaq finished the year a big winner in 43%; the S&P managed a gain of 24% and the Dow up 14%. Despite many if not most commentators (but not SGM-FX) calling the demise of the Dollar in 2023, it finished the year down […]

Say Squeeze Happy New Year to you all. With this, the first trading session of 2024, I thought it important to look at an element of potentially complacent pricing that had endured the final trading sessions of 2023. The risk that is presenting itself within EURUSD could be one of the first misallocations to be […]

US Interest Rates and Oil No room for errors is the mantra that has dawned on the market as the effect of having been so exuberant about the path of US interest rates in 2024. In the same way that fears of an escalation of disruption in the Red Sea of oil shipments by the […]

Did we forget CHF? With the sudden pivot by the Fed in mid-December, it has been easy to marginalise otherwise high salience events. One such largely overlooked development has been within Switzerland and its Franc. The Swissy has been a key currency as it has been one of those major currencies undertaking a program of […]

US Dollar and Markets USD generally weak in thin markets and the EUR strong at EUR/USD 1.1040 and EUR/JPY 157.40.Gold at $2066.Brent Oil $81.10 as the markets watch the Red Sea and the Houthis with trepidation. One oil fact for 2023: Russia sold half of its entire oil production to China. Another reason why the […]

A Tale of Two Cities Very early yesterday morning Lloyds Bank of the UK released the results of its Business Confidence Survey and it is fair to say it was more Bah Humbug than full of seasonal cheer since it showed the largest monthly fall since August 2022 down from 42 to 35. Meanwhile the […]

How to tighten without tightening As the ECB learned last week, the easiest way to de facto tighten policy is to allow others to do it for you. At the press conference last week, President Lagarde did not reveal similar vulnerabilities to the ECB’s monetary outlook as the Fed had done the evening prior. The […]

Oil Prices So far the attacks on ships in the Red Sea have had a muted effect on the oil price with Brent rising just 1%. However with more shipping lines holding shipments and re-routing them around the Cape of Good Hope, the likelihood of the extra 3,500 nautical miles and 10 days sailing time […]