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: Buy VIX on dips below 14. We review the merits of Ray Dalio's 'Big Short' on European stocks and add long EUR-SEK and short ZAR-MXN to our watchlist. We stay defensive on USD, US Treasurys and US equities via long positions in JPY, EUR, UST 10s vs 30s and US banks vs FANG+ stocks. We are long AUD-NZD and SGD-CNH and prefer Malaysia to Indian and Philippine equities.</li>
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Monday: Japan trade, Thailand…</li>
</ul>

Our guide to this week’s global macro risk events and trading opportunities.

This week in trade ideas: Buy VIX on dips below 14. We review the merits of Ray Dalio's 'Big Short' on European stocks and add long EUR-SEK and short ZAR-MXN to our watchlist. We stay defensive on USD, US Treasurys and US equities via long positions in JPY, EUR, UST 10s vs 30s and US banks vs FANG+ stocks. We are long AUD-NZD and SGD-CNH and prefer Malaysia to Indian and Philippine equities.

Monday: Japan trade, Thailand…


Week Ahead in Global Macro: FOMC/ECB Minutes, Dalio's 'Big Short', Japan CPI, South Africa Budget

Economist

Richard Iley

Macroeconomics

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/044/620/original/Screen%20Shot%202018-02-15%20at%207.54.04%20AM.png?1518643884" class="editor-image img-responsive" data-smartkarma-image-id="44620"></figure><div class="content-highlight">
US inflation has been flickering back to life for several months now. We have been consistently highlighting this ominous trend and identified the US's deteriorating growth:inflation mix as a key investment theme for the year <a href="https://www.smartkarma.com/insights/chart-of-the-day-the-comeback-kid" target="_blank" data-smartkarma-citation="insights:16026">Chart of the Day: The Comeback Kid</a>, <a href="https://www.smartkarma.com/insights/chart-of-the-day-that-2008-feeling" target="_blank" data-smartkarma-citation="insights:16943">Chart of the Day: That 2008 Feeling....</a>, <a href="https://www.smartkarma.com/insights/global-18-for-18-part-1" target="_blank" data-smartkarma-citation="insights:16410">Global: 18 For '18 - Part 1</a>). 
But the trend in US inflation morphed from the mildly worrying to the outright scary last nightas the January CPI surprised vigorously to the upside. Our preferred…
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US inflation has been flickering back to life for several months now. We have been consistently highlighting this ominous trend and identified the US's deteriorating growth:inflation mix as a key investment theme for the year Chart of the Day: The Comeback Kid, Chart of the Day: That 2008 Feeling...., Global: 18 For '18 - Part 1). 
But the trend in US inflation morphed from the mildly worrying to the outright scary last nightas the January CPI surprised vigorously to the upside. Our preferred…


Chart of the Day: US Inflation Turns Scary

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

The tepid recovery in the USD, in spite of higher US yields and improving economic outlook, raises the question – is the market becoming spooked by the worsening US fiscal outlook.  Normally the market would not question the US Treasuries capacity to borrow.  And it may be considered heretical to see the USD as other than a safe haven. However, this US fiscal expansion is especially risky, coming near the end of the business cycle, closer to a steepening demographic fiscal slope, and politics more partisan than ever.  It is hard to imagine how Congress could cope with even a minor economic or financial crisis.

The tepid recovery in the USD, in spite of higher US yields and improving economic outlook, raises the question – is the market becoming spooked by the worsening US fiscal outlook.  Normally the market would not question the US Treasuries capacity to borrow.  And it may be considered heretical to see the USD as other than a safe haven. However, this US fiscal expansion is especially risky, coming near the end of the business cycle, closer to a steepening demographic fiscal slope, and politics more partisan than ever.  It is hard to imagine how Congress could cope with even a minor economic or financial crisis.

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


‘The dog that didn’t bark’, the famous Sherlock Holmes clue, may help us understand the Yen and evaluate whether we are seeing Asia’s biggest policy shift in three decades? US dollar weakness has always gone hand-in-hand with a surging Yen, but in the latest USD sell-off the Yen has been largely unmoved and, as the chart of a peer-weighted Yen basket (USD, Yuan, Sing$ and Won) suggests, over the past year the Yen has effectively flat-lined. This brief note summarises a series of recently…

‘The dog that didn’t bark’, the famous Sherlock Holmes clue, may help us understand the Yen and evaluate whether we are seeing Asia’s biggest policy shift in three decades? US dollar weakness has always gone hand-in-hand with a surging Yen, but in the latest USD sell-off the Yen has been largely unmoved and, as the chart of a peer-weighted Yen basket (USD, Yuan, Sing$ and Won) suggests, over the past year the Yen has effectively flat-lined. This brief note summarises a series of recently…

Is This Asia’s Biggest Policy Shift in Three-Decades?

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.

United States

The euro is the official currency of the European Economic & Monetary Union.  The US dollar is the official currency of the United States of America.

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Week Ahead in Global Macro: FOMC/ECB Minutes, Dalio's 'Big Short', Japan CPI, South Africa Budget

Our guide to this week’s global macro risk events and trading opportunities. This week in trade ideas: Buy VIX on dips below 14. We review the...

Virgil Fernandez Esguerra

Chart of the Day: US Inflation Turns Scary

US inflation has been flickering back to life for several months now. We have been consistently highlighting this ominous trend and identified the...

Richard Iley

USD and US Fiscal Policy Off-The-Rails

The tepid recovery in the USD, in spite of higher US yields and improving economic outlook, raises the question – is the market becoming spooked by...

Greg Gibbs

Is This Asia’s Biggest Policy Shift in Three-Decades?

‘The dog that didn’t bark’, the famous Sherlock Holmes clue, may help us understand the Yen and evaluate whether we are seeing Asia’s biggest...

Michael J. Howell

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

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