SGM-FX insights

US Jobs Friday’s US jobs figures that showed an increase of 353,000 jobs which was almost exactly double what was expected has poured more than cold water on the argument for the first US rate cut happening next month. With wage inflation at 4.5%, the fear that the present level of interest rates is curbing […]

Bank of England To absolutely no-one’s surprise the Bank of England left rates as they were yesterday at 5.25% and Governor Bailey said they needed more data before cutting rates. Critics of the UK Monetary Policy setting unit will soon be accusing the Bank of being too slow to raise rates when inflation took off […]

ECB President As predicted, Mme Lagarde, President Christine Lagarde yesterday stuck to her existing line that it was all much too early to talk about interest rate cuts in the Eurozone. The market or rather 60% of those polled are holding out for the first such rate cut occurring in April. Maybe that 60% should […]

UK Election The current political situation in the UK is delicate. Fortunately, by contrast to the often calamitous moments of the Johnson and Truss eras of governance, political risk is being somewhat overlooked. We are likely in an election year in the UK, at least that’s what the Prime Minister has recently told us. A […]

De-Dollarization in Africa More on this story with real life examples of countries or rather one country in particular not just talking about it, but actually doing it: China. Bank of China has operations in Kenya, South Africa and Zambia. But when arriving at Kenneth Kaunda International Airport in the Zambian capital of Lusaka, Bank […]

US Economy The greatest risks to the US economy in 2024 at least according to 1200 US business leaders polled last week are in order as follows: Recession, Inflation and Interest Rates. Nothing unexpected there. However tacked on to the end was the fourth greatest risk at least to domestic US corporate chiefs, although outside […]

US Inflation In the end the much anticipated December US inflation figure yesterday came in at 3.4% versus the 3.2% expected and the November 3.1%. While that may not look like much of a difference, it is a signal that is unwelcome in the market especially when core inflation is only just below 4% at […]

Hello again With the festivities now having passed us by, a defining feature of 2023 markets is set to return in earnest. Aside from the non-farm payroll show that must always go on, the data calendar almost ceased over the Christmas period. For those interested in the above statistic released on the first Friday of […]

European Central Bank and British Pound Markets have fully discounted a rate cut of 25bps in EUR rates by April. Conversely the expectation is for the Bank of England to cut UK interest rates by 25bps in June with a 75% chance of that cut being brought forward to May. As it stands, the current […]

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 […]

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 […]

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 […]