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

US equities couldn’t muster an end of month consolidation.  They attempted to stabilise on Thursday but closed near their lows on Friday. The weight of the news was too much – Trump expanding tariffs threats to one of its biggest and most integrated trading partners, Mexico, and trade relations hardened between China and the US. Trump plans to convince the UK to avoid Huawei, China started its own “Entity” list to potential ban US companies, and it is preparing to halt rare earth mineral exports to the US.  Optimists are giving up on a global economic recovery, and Chinese PMI data confirm its manufacturing sector is struggling already from the trade war.   The tide may be turning against the USD as the market prices in significant Fed rate cuts, its yields fall sharply, and its equity market leads recent falls.  The USA is starting to look like one of the biggest potential losers in a trade war.  Its economic data are not revealing many problems yet, but this only suggests it has further to fall.  The market is likely to dismiss stronger US economic data and panic at the first sign of weakness (raising risks around the ISM and payrolls reports next week).

US equities couldn’t muster an end of month consolidation.  They attempted to stabilise on Thursday but closed near their lows on Friday. The weight of the news was too much – Trump expanding tariffs threats to one of its biggest and most integrated trading partners, Mexico, and trade relations hardened between China and the US. Trump plans to convince the UK to avoid Huawei, China started its own “Entity” list to potential ban US companies, and it is preparing to halt rare earth mineral exports to the US.  Optimists are giving up on a global economic recovery, and Chinese PMI data confirm its manufacturing sector is struggling already from the trade war.   The tide may be turning against the USD as the market prices in significant Fed rate cuts, its yields fall sharply, and its equity market leads recent falls.  The USA is starting to look like one of the biggest potential losers in a trade war.  Its economic data are not revealing many problems yet, but this only suggests it has further to fall.  The market is likely to dismiss stronger US economic data and panic at the first sign of weakness (raising risks around the ISM and payrolls reports next week). 

Safe Haven Status of the USD Starting to Crumble Under the Weight of Trump’s Trade Wars

Macroeconomics

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus would generate a recovery in the global economy and the US economy was largely immune to a slowdown in activity abroad. However, the tariffs have been increased, trade talks have stalled, and the US has rolled out bans on Chinese tech companies.  The evidence grows that there is a structural rift in US-China trade relations. The rebound in Chinese economic activity in March was not backed up by data in other Asian exporter nations or Europe through April.  Chinese activity data slumped again in April, and the latest PMI data in the Eurozone, Japan and the USA for May are weak. Oil and copper prices have turned lower, suggesting that industrial activity remains weak.  We continue to see downside risk for still elevated US equities.  The strength in the USD to date is contributing to downward pressure on US equities.  The gains in the USD may have become over-extended.  China may pursue a more stable CNY for a period and lower US yields should support safe haven currencies, JPY, CHF and gold.

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus would generate a recovery in the global economy and the US economy was largely immune to a slowdown in activity abroad. However, the tariffs have been increased, trade talks have stalled, and the US has rolled out bans on Chinese tech companies.  The evidence grows that there is a structural rift in US-China trade relations. The rebound in Chinese economic activity in March was not backed up by data in other Asian exporter nations or Europe through April.  Chinese activity data slumped again in April, and the latest PMI data in the Eurozone, Japan and the USA for May are weak. Oil and copper prices have turned lower, suggesting that industrial activity remains weak.  We continue to see downside risk for still elevated US equities.  The strength in the USD to date is contributing to downward pressure on US equities.  The gains in the USD may have become over-extended.  China may pursue a more stable CNY for a period and lower US yields should support safe haven currencies, JPY, CHF and gold.

The trade dispute has escalated in the last two weeks and looks set to be a war of attrition.  This is not good for the Chinese economy, or the US economy.  It is not good for global growth and will detract from the performance of more trade-dependent economies.Threats to global investor confidence include tensions between the US and Iran.  Combined with the trade war between the US and China, and Brexit chaos, there appears to be good reasons for the market to be trimming exposure to high beta assets (equities, high yield credit, EM markets) and increasing exposure to safe haven currencies – Gold and JPY.  Bond yields and rate expectations are behaving more rationally, with yields falling.It is hard to say that the USD should continue to strengthen when US yields have fallen more than most other countries in recent weeks.  But at this stage, there are few other alternatives.  Gold seems to be an obvious choice, especially if China were to respond to their dispute with the US by seeking an alternative for their US Treasury holdings.

The trade dispute has escalated in the last two weeks and looks set to be a war of attrition.  This is not good for the Chinese economy, or the US economy.  It is not good for global growth and will detract from the performance of more trade-dependent economies.Threats to global investor confidence include tensions between the US and Iran.  Combined with the trade war between the US and China, and Brexit chaos, there appears to be good reasons for the market to be trimming exposure to high beta assets (equities, high yield credit, EM markets) and increasing exposure to safe haven currencies – Gold and JPY.  Bond yields and rate expectations are behaving more rationally, with yields falling.It is hard to say that the USD should continue to strengthen when US yields have fallen more than most other countries in recent weeks.  But at this stage, there are few other alternatives.  Gold seems to be an obvious choice, especially if China were to respond to their dispute with the US by seeking an alternative for their US Treasury holdings.

Asia Ex Japan; Technology and Consumption.

Rohinee Sharma

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/665" target="_blank" data-smartkarma-citation="entities:665:1">Facebook Inc A (FB US)</a> aspires to create a Weixin similar on a global scale, with the potential to also encompass a digital identity. But how will they do it? 
What is Project Libra? and What Do we Really Know about it? 
Does the rationale for building a cryptocurrency sound credible? 
Who are the people involved? Quite a few interesting hires. But what are they building?
What could be the rationale for the need to raise USD 1bn in Funding for Project Libra ?

Facebook Inc A (FB US) aspires to create a Weixin similar on a global scale, with the potential to also encompass a digital identity. But how will they do it? 
What is Project Libra? and What Do we Really Know about it? 
Does the rationale for building a cryptocurrency sound credible? 
Who are the people involved? Quite a few interesting hires. But what are they building?
What could be the rationale for the need to raise USD 1bn in Funding for Project Libra ? 

Bits and Bytes: Facebook's Project Libra.

The RBA should cut rates next week to signal that its inflation target still matters.  Slumping inflation expectations over the last six months, and shifting global central bank focus to address low inflation outcomes, make it more imperative for the RBA to act.  Its patience with low inflation was appropriate when the housing market and associated financial stability risks were rising; this is no longer the case. Global and domestic economic indicators have already shifted the balance of risks towards a weaker labour market.  Waiting until after the election or until actual labour data soften before cutting risks more damage to the RBA’s credibility in the medium term, than acting now.The Fed emphasised a rates on hold view today, batting away pressure to address the recent fall in inflation.  Chair Powell highlighted the trimmed mean inflation data that shows inflation still steady at around 2%.  Using statistical measures of underlying inflation there is a clear divergence in inflation trends in the USA (rising) and Australia (falling).  With rates firmly on hold in the US, a rate cut by the RBA might be expected to push the AUD well below 0.70, something the RBA would welcome to help lift inflation expectations in Australia.

The RBA should cut rates next week to signal that its inflation target still matters.  Slumping inflation expectations over the last six months, and shifting global central bank focus to address low inflation outcomes, make it more imperative for the RBA to act.  Its patience with low inflation was appropriate when the housing market and associated financial stability risks were rising; this is no longer the case. Global and domestic economic indicators have already shifted the balance of risks towards a weaker labour market.  Waiting until after the election or until actual labour data soften before cutting risks more damage to the RBA’s credibility in the medium term, than acting now.The Fed emphasised a rates on hold view today, batting away pressure to address the recent fall in inflation.  Chair Powell highlighted the trimmed mean inflation data that shows inflation still steady at around 2%.  Using statistical measures of underlying inflation there is a clear divergence in inflation trends in the USA (rising) and Australia (falling).  With rates firmly on hold in the US, a rate cut by the RBA might be expected to push the AUD well below 0.70, something the RBA would welcome to help lift inflation expectations in Australia.

An RBA Rate Cut Next Week Is the Smart Move; Fed Firmly on Hold

United States

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Safe Haven Status of the USD Starting to Crumble Under the Weight of Trump’s Trade Wars

US equities couldn’t muster an end of month consolidation. They attempted to stabilise on Thursday but closed near their lows on Friday. The...

Greg Gibbs

The Global Recovery Narrative Crumbles

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus...

Greg Gibbs

Global Risks Escalate

The trade dispute has escalated in the last two weeks and looks set to be a war of attrition. This is not good for the Chinese economy, or the US...

Greg Gibbs

Bits and Bytes: Facebook's Project Libra.

Facebook Inc A (FB US) aspires to create a Weixin similar on a global scale, with the potential to also encompass a digital identity. But how will...

Rohinee Sharma

An RBA Rate Cut Next Week Is the Smart Move; Fed Firmly on Hold

The RBA should cut rates next week to signal that its inflation target still matters. Slumping inflation expectations over the last six months,...

Greg Gibbs

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