SGM-FX insights

UK Growth   GDP contracted by 0.1% in March in a quarter that saw growth grow by a slender 0.8% which was down from growth of 1.3% in Q4 2021 and below the forecast of 1%. GBP/USD dropped to 1.2166, its lowest for 2 years.   The most valuable company in the world   The […]

Blame the Data   Volatility has continued to stretch the foreign exchange market out of its usual ranges. In the case of GBP, the market is evidently heavily short Sterling but until yesterday lacked the optimism to close some of the open positioning or the conviction to drive speculative positions further. The precarious nature of […]

New Zealand   News just out that NZ is opening its borders 2 months early at the end of July. Named as the best politician in the world at the height of the pandemic, PM Jacinda Ardern is not riding so high now with flagging polls on the back of her don’t care economic regime […]

Emerging Market Meltdown   War as an economic event creates winners and losers. Theories of politics and economics suggest that there’s more losers than winners (on average by mode and mean) and in most episodes of at least recent history the world suffers economic and general setback as a result of it. Some currencies are […]

Markets   As we start the week with WTI oil at $110.60, the USD remains very strong at EUR/USD 1.0550 and GBP/USD 1.2280 and GBP/EUR 1.1680. Gold firmer at $1882.   US 10 Year Treasury Bond   Last week the yield reached 3.14% at the same times as the Dow lost 1000 points on Thursday. […]

UK Interest Rates   25bp increase versus the widely expected 50bp rise: a predictable market reaction: GBP smacked. Never mind that the BoE is once again saying they know best and that economic activity is fragile and cannot sustain a 50bp shot. Hopefully this turns out better than the Bank of England inflation is transitory […]

Half a percent   Over the past two decades, the norm for the size and frequency for interest rate adjustments has continued to fade. The tool most obviously available to central banks, the interest paid on deposits held at their institution, is now seen as the heavy touch option and accordingly even when it is […]

Australia   RBA raising interest rates from 0.10% to 0.35% may not sound like much, but it may be the final nail in the coffin that is incumbent PM Scott Morrison’s hope of re-election as he trails in the polls ahead of the National Election on May 21. In case you have lost sight of […]

Much-awaited May   Almost all central banks have now begun their policy normalisation cycle. The ultra-low yield group most notably including the Eurozone and Japan would have something to say and argue about this, but by and large respective central banks have either signposted their tightening cycle or the market has begun to do it […]

Starbucks   With more than 25,000 outlets worldwide in more than 70 countries, Starbucks has by any stretch of the imagination a thriving business. Have you noticed that when you pay for your coffee it is always a little bit more than the quoted tariff ? No neither had I until yesterday when I was […]

Emerging Markets   Take one glance at intraday currency moves and you’ll see that volatility is up in a noticeable and pervasive way. There are many expressions of risk in the foreign exchange market at present: the persistent and increasing strength of the US Dollar is symptomatic not just of the increasingly hawkish repricing of […]

Burger King   As previously reported Burger King is in hot water with advertising standards officers in the USA having overstated the size of its Whopper burger product by up to 30% in advertisements. Undaunted by that spot of bother, Burger King has announced that it is opening 200 new outlets in the UK. Applying […]