SGM-FX insights

UK Growth Further worries this weekend for UK Chancellor Reeves as it emerges that if her plans were based on up to date forecasts rather than UK official growth projections not only would her numbers not add up but the UK would be faced with a GBP 30 billion hole in the budget. While inflation […]

Germany In just 6 weeks Germany will vote and while Chancellor Scholz thinks that he can win, most others are equally convinced that he cannot based on his economic record alone that has seen the German economy contract by 0.3% in 2023 and by an estimated 0.2% in 2024. That on top of his ability […]

Markets In Reverse – Inflation to the Rescue Particularly in the case of the beleaguered GB Pound, it may be time to do away with the textbook. Instead of attracting further demand as UK yields have risen, GBP has registered one of its worst starts to a year on record. It is a narrative of […]

British Pound With a GBP 4 billion auction of 10 Year Gilts today, markets are watching carefully as higher long term rates put pressure on the UK Chancellor and GBP bounces around between USD 1.21 and 1.22. After 6 consecutive trading sessions with GBP weaker and a low of 1.2097 which has taken its toll, […]

Reckoning Days Despite it being less than one week until Donald Trump’s inauguration, markets are still fixated on the evolution of the UK’s bond market and its currency. The Chancellor may well have been hoping for some distracting headlines from the incoming President-elect. Unfortunately for her, those that have come from the Trump administration and […]

Most Valuable Currencies in the world as at January 2025 Not a surprise that the Kuwaiti Dinar at $3.24 tops the league table nor that the Bahraini Dinar $2.65 and the Omani Riyal at $2.59 are also in the top 5. But maybe UK Chancellor Reeves should pay more attention to the magnificent legacy for […]

British Pound GBP at its lowest for over 1 year while UK Government borrowing costs are at their highest for 16 years is not a good look and a situation that will further constrain Chancellor Reeves on delivering on her oft repeated but as yet undelivered promises on growth. Tax increases and spending cuts are […]

Round two? Rising UK borrowing costs have failed to drag demand into the Pound. This time we are not referring to benchmark yields, with BoE Governor Bailey still insisting cuts amounting to 100-basis points are due in 2025. As we approached the new year, the 30-year gilt yield pushed above 5%, its highest level in […]

Europe With EU annual inflation coming in at 2.4% up from 2.2%, conventional wisdom might suggest that that might dampen the ECB’s enthusiasm for an early cut in EUR interest rates at the end of January. But such is the weakness pervading the EU economies, it is more likely that the hawkish tendencies at the […]

EURO At its weakest for 2 years against USD and reflecting a fall of 9% in 2024, EUR has a look of drifting down towards parity with USD and then below. The news on gas supplies from Russia being stopped by Ukraine, the likelihood of a more dovish ECB agenda on interest rates and the […]

UK Interest Rates Instructive that rate cuts of 100bps in short term UK interest rates in 2024 resulted in 10 Year Government Bond yields rising by exactly 100bps from 3.6% to 4.6% to the levels last seen after short lived PM Liz Truss’ ill-fated foray into the world of market economics with her September 2022 […]

2+1 ‘winners’ Happy New Year. As weather warnings fade in favour of New Year’s resolutions, the UK embarks upon its first trading day of 2025. Some markets remain closed today with notable value date exceptions from Switzerland, Japan and New Zealand. As we highlighted earlier in the week, 2024 was characterised by the typically asynchronous […]