SGM-FX insights

The battle of Japan   Trading flows have continued to pummel the Japanese Yen. Even as the USDJPY spot price crossed through 130, there was only a momentary pause before selling pressure continued. The record weakness in JPY had made headlines and forced analysts to question just how low the currency could fall. Despite a […]

Eye of the Storm?   Last week saw the biggest drop in world stock markets for 2 years but now things have calmed down…or have they? With inflation topping out/coming down, it will allow Central Banks to ease off their recent tightening, but that does not mean that volatility will ease, in fact it is […]

An economic reality   Post financial crisis we have seldom seen volatility of the extent that we have experienced recently. Certainly, at least not on such a widespread level that has regularly been characterised by simultaneous write-downs in normally negatively correlated assets. Financial headlines last week at least attested to some concrete actions to justify […]

Eurozone Wildfires   The province of Zamora in north west Spain like many other parts of the Iberian peninsula has seen 40c temperatures over the weekend which has caused forest fires to break out and firefighters to be deployed. Elsewhere in the Eurozone, similar temperatures are being experienced in Paris and no doubt the aircon in […]

Swiss Roll   The Swiss Central Bank managed to shock markets that were widely expecting a rate increase from the UK’s Bank of England but not from Zürich yesterday. The 25bp UK rise having been expected meant GBP weakened by half a cent but the real action came when the Swiss reduced their rates from […]

Central bank mania   Heading into this week, markets had already braced for raised volatility in expectation of two key and much awaited central bank meetings. Those two central banks that were scheduled to meet were the Bank of England and the Federal Reserve. As you will recall, there has been a theme this year […]

British Pound   Already battered as we wrote earlier in the week, GBP came under renewed pressure yesterday from a stronger USD on the back of high US inflation numbers which gave rise to growing expectations of a more aggressive Federal Reserve response in the shape of an early 0.75% interest rate rise. This was further […]

Fragile   Entering market open yesterday many investors and analysts had commented on the fragility that they foresaw for yesterday’s trading session. The catalyst for the unnerved markets was the recently released US inflation data which was still not identifying a peak in price inflation that many had expected to emerge by now. As the […]

Four Day Working Week   Beware of statistics: the rise in the number of 4 days a week jobs in the UK has risen by 90% post the Covid pandemic. But from a very low base. The jobs quoted are predominantly in the charity, hospitality and sales and distribution sectors which given the nature of […]

ECB   ECB President Mme Lagarde (finally) promised to acknowledge the rising cost of living led by food and energy prices by saying yesterday that the ECB was now minded to raise interest rates higher than was expected for the first time for 10 years citing higher inflation and lower growth expectations.   US Battery […]

Markets   US 10 Year Treasury now back just over the psychological 3% mark, USD strong on the back of that EUR/USD 1.0670. Japanese Yen at a 20 year low USD/JPY 132.80. Australia raised interest rates yesterday by 0.50 in a surprise move and indicated that a steep path of further increases lies ahead from […]

No Confidence   Following two days of bank holiday and a weekend, Sterling markets opened yesterday to the prospect of a vote of no confidence in the UK Prime Minister Boris Johnson. Having received a sufficient number of letters expressing no-confidence in the Prime Minister, the Chair of the 1922 committee announced the forthcoming vote. […]