Economist

Richard Iley

Macroeconomics

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/044/028/original/Screen%20Shot%202018-02-08%20at%2011.28.12%20AM.png?1518051696" class="editor-image img-responsive" data-smartkarma-image-id="44028"></figure><div class="content-highlight">
As predicted several months ago, long-term Ozzie and US government bond yields are now kissing for the first time since the Asia Crisis almost twenty years ago (see <a href="https://www.smartkarma.com/insights/chart-of-the-day-18-years-is-a-long-time-between-kisses" target="_blank" data-smartkarma-citation="insights:15174">Chart of the Day: 18 Years Is A Long Time Between Kisses...</a>). 10-year yields for both economies are now oscillating around 2.80-2.85%. 
It is hard to overstate what a seismic shift this represents for the AUD. Its long-run, historic yield advantage over the USD has evaporated. Carry trade dynamics will no longer support the AUD. This…
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As predicted several months ago, long-term Ozzie and US government bond yields are now kissing for the first time since the Asia Crisis almost twenty years ago (see Chart of the Day: 18 Years Is A Long Time Between Kisses...). 10-year yields for both economies are now oscillating around 2.80-2.85%. 
It is hard to overstate what a seismic shift this represents for the AUD. Its long-run, historic yield advantage over the USD has evaporated. Carry trade dynamics will no longer support the AUD. This…


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.

FX & Rates

In our report last week, (<a href="https://www.smartkarma.com/insights/bond-yields-in-driver-s-seat-time-for-correction-in-equities-and-the-usd" target="_blank">Bond yields in driver’s seat; time for correction in equities and the USD; 31-Jan</a>), we anticipated rising US yields spilling over to a correction in global equities and the USD.  The recovery in the USD has been modest so far, but it may be a creeper as the market pays more attention to risks associated with late-cycle economic growth and central bank policy tightening.   Progress by the US Congress on a funding deal could be the immediate catalyst for more dollar gains.  The recent fall in AUD/NZD appears out-of-line with relative economic trends, yield spread and commodity prices.

In our report last week, (Bond yields in driver’s seat; time for correction in equities and the USD; 31-Jan), we anticipated rising US yields spilling over to a correction in global equities and the USD.  The recovery in the USD has been modest so far, but it may be a creeper as the market pays more attention to risks associated with late-cycle economic growth and central bank policy tightening.   Progress by the US Congress on a funding deal could be the immediate catalyst for more dollar gains.  The recent fall in AUD/NZD appears out-of-line with relative economic trends, yield spread and commodity prices.

Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

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Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 
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Trade ideas: We position for a policy-driven RMB depreciation by going long SGD-CNH. We take profit on long VIX but stay short 10-year USTs. We add long AUD-NZD, short Indian equities, long EUR-GBP to our watchlist. We may short the Philippine peso if the BSP keeps rates on hold.</li>
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Monday: Composite PMIs, Turkey CPI, Indonesia GDP and the Korea High Court's ruling on Samsung heir Jay Y. Lee</li>
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Tuesday…</li>
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Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 


Trade ideas: We position for a policy-driven RMB depreciation by going long SGD-CNH. We take profit on long VIX but stay short 10-year USTs. We add long AUD-NZD, short Indian equities, long EUR-GBP to our watchlist. We may short the Philippine peso if the BSP keeps rates on hold.

Monday: Composite PMIs, Turkey CPI, Indonesia GDP and the Korea High Court's ruling on Samsung heir Jay Y. Lee

Tuesday…



Week Ahead in Global Macro: US Stopgap #5, UST Auctions, RBA, RBNZ, BOE, China Trade, Phils. BSP

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

DXY bear call from 101 is nearing our macro target at 88.50 where we see at least an intermediate rally cycle unfolding. DXY roadmap is outlined. Any USD rise is unlikely to provide major headwinds for EM equities until we clear the 92 handle.Macro Euro cycle peak target outlined in the weekly chart.Top bets to front run a DXY low are seen in TRY, BRL, AUD and GBP. We are taking off our USD/SGD short within our Asian transition scenario.USD downside looks limited as down trends in Asia lose bear momentum/conviction as bull divergence takes shape. Can weaker Asian FX turn ahead or a DXY low? The Peso is leading the USD bull turn making the SGD more vulnerable. Korea's Won chart decline is maturing. MYR and CNH long vs the dollar still have more gas.A domino USD bottoming cycle is due in February with a backfill and re test touted into March which should complete an intermediate equity peak, commodity peak and USD low.

DXY bear call from 101 is nearing our macro target at 88.50 where we see at least an intermediate rally cycle unfolding. DXY roadmap is outlined. Any USD rise is unlikely to provide major headwinds for EM equities until we clear the 92 handle.Macro Euro cycle peak target outlined in the weekly chart.Top bets to front run a DXY low are seen in TRY, BRL, AUD and GBP. We are taking off our USD/SGD short within our Asian transition scenario.USD downside looks limited as down trends in Asia lose bear momentum/conviction as bull divergence takes shape. Can weaker Asian FX turn ahead or a DXY low? The Peso is leading the USD bull turn making the SGD more vulnerable. Korea's Won chart decline is maturing. MYR and CNH long vs the dollar still have more gas.A domino USD bottoming cycle is due in February with a backfill and re test touted into March which should complete an intermediate equity peak, commodity peak and USD low.

Investment Strategist, CEO, Hokkaido Asset Management

Benjamin Pedley

Investment Strategist, CEO

Hokkaido Asset Management

- China money market funds up leverage to enhance returns- Adds to risks for Australian financial markets as mainland GDP slows- Trade and investment links between Australia and China underpin correlation between two economies and relevance for equities Down Under- Trump tax cuts may accelerate Fed tightening, adding to downside risks for A$ as interest rate margin swings in favour of US dollar- US fiscal stimulus to cushion downside for A$ near-term

- China money market funds up leverage to enhance returns- Adds to risks for Australian financial markets as mainland GDP slows- Trade and investment links between Australia and China underpin correlation between two economies and relevance for equities Down Under- Trump tax cuts may accelerate Fed tightening, adding to downside risks for A$ as interest rate margin swings in favour of US dollar- US fiscal stimulus to cushion downside for A$ near-term

China Money Market Funds Pose Long-Term Risks for A$

Australia

The Australian dollar is the official currency of the Commonwealth of Australia.

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AUD (USDAUD CURNCY)

Chart of the Day: Pucker Up!

As predicted several months ago, long-term Ozzie and US government bond yields are now kissing for the first time since the Asia Crisis almost...

Richard Iley

USD Rebound Is a Creeper

In our report last week, (Bond yields in driver’s seat; time for correction in equities and the USD; 31-Jan), we anticipated rising US yields...

Greg Gibbs

Week Ahead in Global Macro: US Stopgap #5, UST Auctions, RBA, RBNZ, BOE, China Trade, Phils. BSP

Executive summary: Our guide to this week’s global macro risk events and trading opportunities. Trade ideas: We position for a policy-driven...

Virgil Fernandez Esguerra

USD Short to Long Transition Cycle

DXY bear call from 101 is nearing our macro target at 88.50 where we see at least an intermediate rally cycle unfolding. DXY roadmap is outlined....

Thomas Schroeder

China Money Market Funds Pose Long-Term Risks for A$

- China money market funds up leverage to enhance returns- Adds to risks for Australian financial markets as mainland GDP slows- Trade and...

Benjamin Pedley

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