Founder and CEO, Europacifica Consulting

Naomi Fink

Founder and CEO

Europacifica Consulting

Macroeconomics

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/009/868/original/Chart2.Australia.Risk_.Pref_.png?1467594254" class="editor-image img-responsive" data-smartkarma-image-id="9868"><figcaption class="figcaption">Australians risk-averse? Not today, mate (Source: Europacifica)</figcaption></figure> Speculation that Australia will lose its <a href="http://www.afr.com/news/politics/election/election-2016-the-trafficjam-political-culture-threatening-aaa-credit-rating-20160703-gpxil9" target="_blank">AAA rating</a> due to political deadlock at the polls has probably been enhanced by <a href="http://www.telegraph.co.uk/business/2016/06/27/george-osborne-to-speak-in-attempt-to-calm-markets-following-bre/" target="_blank">the final downgrade</a> to the UK's own rating, motivated by the recent EU referendum.  Medium-term, the "lucky country" might very well escape the fate of capital flight, given there are many more controversial events (such as US elections) that affect Australia little. Whenever appetite for risk revives…

Australians risk-averse? Not today, mate (Source: Europacifica) Speculation that Australia will lose its AAA rating due to political deadlock at the polls has probably been enhanced by the final downgrade to the UK's own rating, motivated by the recent EU referendum.  Medium-term, the "lucky country" might very well escape the fate of capital flight, given there are many more controversial events (such as US elections) that affect Australia little. Whenever appetite for risk revives…

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

It is easy to understand why there has been and remains so much hope regarding the profitability of China’s banks. The simple answer is penetration. Here we are referring to how accessible banking is to the population, and we measure this by population/bank branches. Where banking is less accessible and limited, there is less competition and a greater ability for banks to charge high prices.This should be reflected in the variance of net interest margins by country. But it is not this simple…

It is easy to understand why there has been and remains so much hope regarding the profitability of China’s banks. The simple answer is penetration. Here we are referring to how accessible banking is to the population, and we measure this by population/bank branches. Where banking is less accessible and limited, there is less competition and a greater ability for banks to charge high prices.This should be reflected in the variance of net interest margins by country. But it is not this simple…

Asia-Pacific: Branch Banking and Profitability

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

We think the case is clear for the RBA to cut rates tomorrow and are predicting this outcome.  The much lower core inflation reading, evidence of tightening bank credit conditions, some softening recently in credit growth, cooler job vacancies, a stronger AUD, some renewed doubts on China and timing of the 2 July election suggest the RBA needs to be decisive and get ahead of expectations.  Consequently we see further weakness in the AUD and continue to favour gold as we discussed last week outlining risks in China that may spill over to global asset markets and the rebounding JPY that may push the BoJ toward more easing.

We think the case is clear for the RBA to cut rates tomorrow and are predicting this outcome.  The much lower core inflation reading, evidence of tightening bank credit conditions, some softening recently in credit growth, cooler job vacancies, a stronger AUD, some renewed doubts on China and timing of the 2 July election suggest the RBA needs to be decisive and get ahead of expectations.  Consequently we see further weakness in the AUD and continue to favour gold as we discussed last week outlining risks in China that may spill over to global asset markets and the rebounding JPY that may push the BoJ toward more easing.

Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.

Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

<ul><li>BIS will no longer allow internal modeling for banks to arrive at risk weights</li><li>In all likelihood, there will be a rise in credit risk assets, which is by far the most important category of risk- weighted assets</li><li>The risk is that under new regulations those banks benefiting from internal models to drive their credit risk estimates, will be penalized the most</li><li>Australia's banks stand out as possibly being hardest hit, but we are not convinced</li><li>Hang Seng Bank, is at the other end of the spectrum, and may be less over capitalised than it appears</li></ul>

BIS will no longer allow internal modeling for banks to arrive at risk weightsIn all likelihood, there will be a rise in credit risk assets, which is by far the most important category of risk- weighted assetsThe risk is that under new regulations those banks benefiting from internal models to drive their credit risk estimates, will be penalized the mostAustralia's banks stand out as possibly being hardest hit, but we are not convincedHang Seng Bank, is at the other end of the spectrum, and may be less over capitalised than it appears 

Australia

Insurance Australia Group Limited (IAG) is an Australian-based international general insurance group with operations in Australia, New Zealand, and Asia. The Group provides a range of personal and commercial insurance products, primarily motor vehicle and home insurance.

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Insurance Australia (IAG AU)

Australia a Risk Haven? Not Today, Mate

Speculation that Australia will lose its AAA rating due to political deadlock at the polls has probably been enhanced by the final downgrade to...

Naomi Fink

Asia-Pacific: Branch Banking and Profitability

It is easy to understand why there has been and remains so much hope regarding the profitability of China’s banks. The simple answer is...

Daniel Tabbush

AmpGFX - RBA Cut the Obvious Decision

We think the case is clear for the RBA to cut rates tomorrow and are predicting this outcome. The much lower core inflation reading, evidence of...

Greg Gibbs

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Domestic Australian factors are being overshadowed by global developments. These global drivers account for both its rapid rebound over the last...

Greg Gibbs

Bank Regulatory Changes to Credit Risk

BIS will no longer allow internal modeling for banks to arrive at risk weights In all likelihood, there will be a rise in credit risk assets,...

Daniel Tabbush

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