Emerging Market Economist, Emerginomics

Tatiana Orlova

Emerging Market Economist

Emerginomics

Macroeconomics

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Earlier this month, the news that the US and China were nearing a limited trade deal returned optimism to the markets. At the annual IMF and World Bank meetings, hopes that the global economy was likely to avoid recession in 2020 were still running high. However, data on global manufacturing and investment remain gloomy. Turkey’s military operation in response to US President Trump’s decision to pull US troops from Syria roiled Turkey’s markets. Despite the removal of the US sanctions after Turkey and Russia reached an accord in Sochi, we think higher geopolitical risks should remain embedded in Turkish yields. All eyes now should be on the Trump-Xi meeting and the US decision on tariffs on EU auto imports due in November.
This week, the US Fed is holding a regular meeting; the markets are widely expecting another 25bp cut in the Fed funds rate. An insufficiently hawkish Fed statement or an unexpected decision to keep the policy on hold could dilute the markets' optimism and provoke a sell-off in high-yielding assets. Furthermore, they would likely draw more criticism from Trump and stoke up concerns that the Fed has become a hostage in the US-China trade confrontation.
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Earlier this month, the news that the US and China were nearing a limited trade deal returned optimism to the markets. At the annual IMF and World Bank meetings, hopes that the global economy was likely to avoid recession in 2020 were still running high. However, data on global manufacturing and investment remain gloomy. Turkey’s military operation in response to US President Trump’s decision to pull US troops from Syria roiled Turkey’s markets. Despite the removal of the US sanctions after Turkey and Russia reached an accord in Sochi, we think higher geopolitical risks should remain embedded in Turkish yields. All eyes now should be on the Trump-Xi meeting and the US decision on tariffs on EU auto imports due in November.
This week, the US Fed is holding a regular meeting; the markets are widely expecting another 25bp cut in the Fed funds rate. An insufficiently hawkish Fed statement or an unexpected decision to keep the policy on hold could dilute the markets' optimism and provoke a sell-off in high-yielding assets. Furthermore, they would likely draw more criticism from Trump and stoke up concerns that the Fed has become a hostage in the US-China trade confrontation.


Geopolitical Comment: While Markets Are Hoping for US-China Mini-Deal, Turkey Is Playing with Fire

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

<a href="https://www.smartkarma.com/entities/u-s-dollar-index-usdx" target="_blank" rel="noopener" data-smartkarma-citation="entities:26018:1">US Dollar Index (DXY) (DXY CURNCY)</a> continues its grind higher as non confirmation bear divergence matures to the point where an inflection top is taking shape.RSI and MACD non confirmations are maturing to the point of inflection into the next USD push higher near DXY 99.80. Indicator non confirmations (bear divergence) warn of tops as the bulk or market participants are long the USD (or short Euro) amid waning upside momentum (clear choppy overlap is indicative of indecision).Euro bear wedge mirrors the DXY rising grind and is drifting into lower wedge support and buy zone for an upside test.USD/JPY 106.70 represent the bull/bear pivot line for the JPY, global risk and the Nikkei.

US Dollar Index (DXY) (DXY CURNCY) continues its grind higher as non confirmation bear divergence matures to the point where an inflection top is taking shape.RSI and MACD non confirmations are maturing to the point of inflection into the next USD push higher near DXY 99.80. Indicator non confirmations (bear divergence) warn of tops as the bulk or market participants are long the USD (or short Euro) amid waning upside momentum (clear choppy overlap is indicative of indecision).Euro bear wedge mirrors the DXY rising grind and is drifting into lower wedge support and buy zone for an upside test.USD/JPY 106.70 represent the bull/bear pivot line for the JPY, global risk and the Nikkei.

DXY Exhaustive Reach as Non Confirmations Mature

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. We like the CAD on a USD bounce as the top commodity currency.Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. We like the CAD on a USD bounce as the top commodity currency.Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

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.

The market absorbed more negative news on the global economy last week, including the IMF forecast downgrade, pessimistic ECB, trade threats by the US towards Mexico and Europe. However, by end week, bond yields, risk assets and the EUR were stronger, suggesting the market has built-in a quite negative scenario and may respond more to positive news in coming weeks.Global bond yields reaffirmed a recent rising trend from a low in late-March.  Equities and bond yields may have ended an extended and wide period of divergence and entered a period of convergence or co-movement.  Yields now look relatively low compared to the rebound in equities and commodities this year.There are latent signs of improved economic activity in China, and the US and China may agree on a trade deal relatively soon.

The market absorbed more negative news on the global economy last week, including the IMF forecast downgrade, pessimistic ECB, trade threats by the US towards Mexico and Europe. However, by end week, bond yields, risk assets and the EUR were stronger, suggesting the market has built-in a quite negative scenario and may respond more to positive news in coming weeks.Global bond yields reaffirmed a recent rising trend from a low in late-March.  Equities and bond yields may have ended an extended and wide period of divergence and entered a period of convergence or co-movement.  Yields now look relatively low compared to the rebound in equities and commodities this year.There are latent signs of improved economic activity in China, and the US and China may agree on a trade deal relatively soon.

<ul>
<li>
The dollar IS the story
</li>
<li>EUR punished for negative yields</li>
<li>Chasing Brexit down a rabbit hole</li>
<li>Gold confounds </li>
<li>Bitcoin at an interesting juncture</li>
</ul>The fact that the dollar has strengthened despite the dovish turn at the Fed this year and the significant fall in US rates and bond yields has confounded many analysts.



The dollar IS the story

EUR punished for negative yields
Chasing Brexit down a rabbit hole
Gold confounds 
Bitcoin at an interesting juncture
The fact that the dollar has strengthened despite the dovish turn at the Fed this year and the significant fall in US rates and bond yields has confounded many analysts.

The Dollar IS the Story; Gold Confounds, A Brexit Rabbit Hole; EUR Punished

Germany

The euro is the official currency of the European Economic & Monetary Union. 

Price Gauge
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Geopolitical Comment: While Markets Are Hoping for US-China Mini-Deal, Turkey Is Playing with Fire

Earlier this month, the news that the US and China were nearing a limited trade deal returned optimism to the markets. At the annual IMF and World...

Tatiana Orlova

DXY Exhaustive Reach as Non Confirmations Mature

US Dollar Index (DXY) (DXY CURNCY) continues its grind higher as non confirmation bear divergence matures to the point where an inflection top is...

Thomas Schroeder

Where to Sell the USD Post Bounce

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge...

Thomas Schroeder

Bond Yields Rope-A-Dope and Fight Back

The market absorbed more negative news on the global economy last week, including the IMF forecast downgrade, pessimistic ECB, trade threats by the...

Greg Gibbs

The Dollar IS the Story; Gold Confounds, A Brexit Rabbit Hole; EUR Punished

The dollar IS the story EUR punished for negative yields Chasing Brexit down a rabbit hole Gold confounds Bitcoin at an interesting...

Greg Gibbs

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52-week Range

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