Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

Our guide to this week’s global macro risk events and trading opportunities.<ul class="">
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This week in trade ideas: Short Italian stocks and bonds on election-related turbulence, under-priced risk scenarios (BTP-Bund, FTSE-MIB vs Stoxx 600). Short EUR-JPY, long EUR-SEK. Stay long SGD-CNH, AUD-NZD, Malaysian equities.
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Monday: ECB Draghi and VP nominee de Guindos, UK Corbyn</li>
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Tuesday: NZ trade, Korea BOK, German CPI, Barnier Brexit briefing, US durable goods, Fed Powell Day 1</li>
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Wednesday: Japan retails/IP…</li>
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Our guide to this week’s global macro risk events and trading opportunities.

This week in trade ideas: Short Italian stocks and bonds on election-related turbulence, under-priced risk scenarios (BTP-Bund, FTSE-MIB vs Stoxx 600). Short EUR-JPY, long EUR-SEK. Stay long SGD-CNH, AUD-NZD, Malaysian equities.


Monday: ECB Draghi and VP nominee de Guindos, UK Corbyn

Tuesday: NZ trade, Korea BOK, German CPI, Barnier Brexit briefing, US durable goods, Fed Powell Day 1

Wednesday: Japan retails/IP…


Week Ahead in Global Macro: Powell in Congress, Italian Elections, PMIs, US PCE, Brexit Speech

Emerging Markets Cross-Asset Strategist, Emvest Partners

Guillaume Coutant

Emerging Markets Cross-Asset Strategist

Cross-Asset Emerging Markets Technical Research

Emvest Partners

Emvest Partners is the leading independent French financial analyst specializing in Emerging Markets for  Asset Managers, Hedge Funds and Family Offices. The studies provided by Emvest Partners are based on a top-down, cross-asset and relative-value approach of the financial markets. The articulation of macroeconomic analysis and technical analysis improves the consistency of the recommendations, the mitigation of risks of error and a significant improvement in performance.

Technical Analysis

<a href="https://www.smartkarma.com/entities/22869" target="_blank" data-smartkarma-citation="entities:22869:1">Crude Oil (CRUDE OIL COMDTY)</a> (BRENT) started a bullish trend in early 2016, with no strong signs of reversal at this stage. Long term view should advocate for further rise towards 80.00.However, overbought indicators combined with with the potential end of an intermediate bull cycle in the 65.00/68.00 area suggest that a period of range/setback should be taking place.Correlated assets are also showing negative signals. <a href="https://www.smartkarma.com/entities/22833" target="_blank" data-smartkarma-citation="entities:22833:1">RUB (USDRUB CURNCY)</a> is expected to depreciate towards the 61.00/62.00 area…

Crude Oil (CRUDE OIL COMDTY) (BRENT) started a bullish trend in early 2016, with no strong signs of reversal at this stage. Long term view should advocate for further rise towards 80.00.However, overbought indicators combined with with the potential end of an intermediate bull cycle in the 65.00/68.00 area suggest that a period of range/setback should be taking place.Correlated assets are also showing negative signals. RUB (USDRUB CURNCY) is expected to depreciate towards the 61.00/62.00 area…

Brent Crude Oil Is Showing Signs of Exhaustion

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

Major corrective moves may be underway in EUR and NZD. Further weakness may also be in stall for CAD and AUD.  In the case on EUR, CAD and AUD, long positions and bullish sentiment leave them vulnerable to position-squaring.  The EUR has moved too far from its yield disadvantage, and it is not as cheap as some might have you believe.  The Bank of Canada has moved into a watch-and-wait mode. The political shockwave in NZ may be the catalyst for a major realignment in the NZD’s long-run over-valuation.  AUD is suffering from weaker house price growth in Australia and China, the RBA is badly missing its inflation target, and its politics are hardly a shining example for any country.

Major corrective moves may be underway in EUR and NZD. Further weakness may also be in stall for CAD and AUD.  In the case on EUR, CAD and AUD, long positions and bullish sentiment leave them vulnerable to position-squaring.  The EUR has moved too far from its yield disadvantage, and it is not as cheap as some might have you believe.  The Bank of Canada has moved into a watch-and-wait mode. The political shockwave in NZ may be the catalyst for a major realignment in the NZD’s long-run over-valuation.  AUD is suffering from weaker house price growth in Australia and China, the RBA is badly missing its inflation target, and its politics are hardly a shining example for any country.

In our view, the probability of a Bank of Canada hike on Wednesday is essentially zero, creating some risk of a further kneejerk rise in USD/CAD.  The market is pricing in a modest 19% chance of a hike.  The tone of the Bank’s statement, press conference and Monetary Policy Review will probably reflect the message delivered by Governor Poloz’s speech on 27-Sep; that the Bank is now more data dependent, and not a slave to its models.  The tone of recent data is that the economy has moderated from its rapid growth in the first half of the year.  There is enough reason to wait for a few months to see how the economy responds to the two quick-fire hikes in Q3.  However, the Bank is still likely to view the economy in-line with the forecasts presented in its July MPR and retain a clear tightening bias.  The labour market in particular retained its strength in September, and wage growth has lifted from low levels.  The recent retreat in the CAD exchange rate is consistent with the narrowing in its yield advantage in the last month.  Further gains in USD/CAD are possible in the context of a stronger USD and NAFTA uncertainty.

In our view, the probability of a Bank of Canada hike on Wednesday is essentially zero, creating some risk of a further kneejerk rise in USD/CAD.  The market is pricing in a modest 19% chance of a hike.  The tone of the Bank’s statement, press conference and Monetary Policy Review will probably reflect the message delivered by Governor Poloz’s speech on 27-Sep; that the Bank is now more data dependent, and not a slave to its models.  The tone of recent data is that the economy has moderated from its rapid growth in the first half of the year.  There is enough reason to wait for a few months to see how the economy responds to the two quick-fire hikes in Q3.  However, the Bank is still likely to view the economy in-line with the forecasts presented in its July MPR and retain a clear tightening bias.  The labour market in particular retained its strength in September, and wage growth has lifted from low levels.  The recent retreat in the CAD exchange rate is consistent with the narrowing in its yield advantage in the last month.  Further gains in USD/CAD are possible in the context of a stronger USD and NAFTA uncertainty.

The market has spent much of this year unwinding a structural short EUR position.  Bank analysts have shifted to a bullish long-term EUR view, ECB QE taper is largely priced-in, the political risk gap between Europe and the USA has narrowed, and the EUR is now stretched from its widening yield disadvantage.  Traders appear to hold an extreme long EUR position, and a head-and-shoulders top appears to be developing; a break of recent lows might target a fall to 1.13.  The US is making progress towards tax reform, and the market is too sanguine on US inflation risks.  Traders also appear to be holding extreme long positions in CAD, the Bank of Canada has shifted its tone on its policy outlook, Canada housing market is slowing, and negotiations on NAFTA are not going well (although have been extended).

The market has spent much of this year unwinding a structural short EUR position.  Bank analysts have shifted to a bullish long-term EUR view, ECB QE taper is largely priced-in, the political risk gap between Europe and the USA has narrowed, and the EUR is now stretched from its widening yield disadvantage.  Traders appear to hold an extreme long EUR position, and a head-and-shoulders top appears to be developing; a break of recent lows might target a fall to 1.13.  The US is making progress towards tax reform, and the market is too sanguine on US inflation risks.  Traders also appear to be holding extreme long positions in CAD, the Bank of Canada has shifted its tone on its policy outlook, Canada housing market is slowing, and negotiations on NAFTA are not going well (although have been extended).

EUR and CAD Need to Square up to Growing Threats

Canada

The Canadian dollar is the official currency of Canada. 

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CAD (USDCAD CURNCY)

Week Ahead in Global Macro: Powell in Congress, Italian Elections, PMIs, US PCE, Brexit Speech

Our guide to this week’s global macro risk events and trading opportunities. This week in trade ideas: Short Italian stocks and bonds on...

Virgil Fernandez Esguerra

Brent Crude Oil Is Showing Signs of Exhaustion

Crude Oil (CRUDE OIL COMDTY) (BRENT) started a bullish trend in early 2016, with no strong signs of reversal at this stage. Long term view should...

Guillaume Coutant

Major Moves Afoot (EUR, CAD, NZD & AUD)

Major corrective moves may be underway in EUR and NZD. Further weakness may also be in stall for CAD and AUD. In the case on EUR, CAD and AUD,...

Greg Gibbs

Bank of Canada on Hold This Time

In our view, the probability of a Bank of Canada hike on Wednesday is essentially zero, creating some risk of a further kneejerk rise in USD/CAD....

Greg Gibbs

EUR and CAD Need to Square up to Growing Threats

The market has spent much of this year unwinding a structural short EUR position. Bank analysts have shifted to a bullish long-term EUR view, ECB...

Greg Gibbs

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