SGM-FX insights

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 […]

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 […]

If you are reading this, you might be contemplating doing some FX business in the Twixtmas period- SGM-FX is open 30+31 December and ready to help. Equities, British Pound, Gold and Oil Morgan Stanley sprinkled some less than sparkling seasonal cheer over the weekend on US equity price direction by saying that due to current […]

If you are reading this, you might be contemplating doing some FX business in the Twixtmas period- SGM-FX is open 27+30+31 December and ready to help. US Dollar As we approach 2025 it is still a USD story in currency markets with just 35bps of interest rate cuts in the USA pencilled in for the […]

Euro Markets are currently pricing in four 25bp rate cuts for 2025 in the EU from 3% to 2% but some analysts are now predicting that rates may go as low as 1.5%. What that means is that EUR will remain weak and allow buyers of EUR to lock in the best levels for years.  […]

British Pound With GBP if not all at sea but wallowing against the crashing waves of USD strength, it is a tale of two cities for beleaguered Brits: GBP/USD dipping below the previous floor of 1.2600 but versus EUR GBP still looking firm due to the apparent divergence between the Federal Reserve and the European […]

Germany Gloomy Germans is not an entirely unknown phenomenon for those of us who have toiled in Finanzplatz Deutschland or the Financial Marketplace of Germany which primarily encompasses Frankfurt, Berlin, Dusseldorf and Hamburg. Unfortunately the ZEW German Research Institute are upholding that less than noble tradition in their Economic Sentiment Indicator report that was released […]

Gold and Oil Gold is still firm at USD 2716 but flat whereas oil is perky with Brent at USD 73.22. The reason oil is firmer despite the hopefully de-escalating Middle East situation is that there is hope being injected into the price by the Chinese economic stimulus and the hope that the expected imminent […]

2024 Global Economy Like much else in the dismal science of economics the 80/20 rule applies to the global economy with the G20+ BRICS economies accounting for 80% of the pie and the rest of the world making up 20%. When it comes to the G20 the G7 countries make up 41% and the 5 […]

Dollarisation A chart in this week’s Economist was both not surprising and at the same time quite remarkable. The not so surprising part was that it showed that USD share of all international payments has risen steadily over the past 12 years since 2012, from 30% to just under 50%. Equally expected is that GBP […]