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

Individual country preliminary inflation data for May suggest that Eurozone headline and core measures will rebound more than expected.  Without the political upheaval in Italy, the data might signal a clearer path to exiting QE and support a sizeable recovery in EUR.  Political uncertainty eased somewhat on Tuesday and EUR has rebounded, but the situation remains fluid.  US economic reports were mixed with a downward revision in Q1 PCE inflation, and softer ADP employment.  However, the Beige Book pointed to somewhat more wage and inflation pressure.  The Bank of Canada suggested that a hike at its next meeting in July would be consistent with their gradual normalisation in rates policy, necessary with inflation on target and the economy operating near capacity.  They see risks from trade policy and global stresses, but not enough to derail plans to hike soon.

Individual country preliminary inflation data for May suggest that Eurozone headline and core measures will rebound more than expected.  Without the political upheaval in Italy, the data might signal a clearer path to exiting QE and support a sizeable recovery in EUR.  Political uncertainty eased somewhat on Tuesday and EUR has rebounded, but the situation remains fluid.  US economic reports were mixed with a downward revision in Q1 PCE inflation, and softer ADP employment.  However, the Beige Book pointed to somewhat more wage and inflation pressure.  The Bank of Canada suggested that a hike at its next meeting in July would be consistent with their gradual normalisation in rates policy, necessary with inflation on target and the economy operating near capacity.  They see risks from trade policy and global stresses, but not enough to derail plans to hike soon.

Euro Inflation, US Economy and Canada Rates Still on Track

Italian leaders have set on a course to clash with the EU that will be hard to turn back from.  A more prolonged crisis appears likely.  Trump is pursuing his hard-line on trade; announcing plans to move ahead with tariffs on Chinese imports and restrictions on investments and trade in the high tech sector.  It wasn’t so long ago that global investor confidence was buoyed by solid synchronized global growth. And yields were rising on firming commodity prices, tightening labour markets, fiscal expansion, rate rises in the US and some other economies, and anticipation that the ECB would end QE in September and begin hikes in 2019.  Fears over populist policy trends were receding.  They are back with a vengeance. Populist policies that threaten regional and global cooperation are driving up risk aversion.

Italian leaders have set on a course to clash with the EU that will be hard to turn back from.  A more prolonged crisis appears likely.  Trump is pursuing his hard-line on trade; announcing plans to move ahead with tariffs on Chinese imports and restrictions on investments and trade in the high tech sector.  It wasn’t so long ago that global investor confidence was buoyed by solid synchronized global growth. And yields were rising on firming commodity prices, tightening labour markets, fiscal expansion, rate rises in the US and some other economies, and anticipation that the ECB would end QE in September and begin hikes in 2019.  Fears over populist policy trends were receding.  They are back with a vengeance. Populist policies that threaten regional and global cooperation are driving up risk aversion. 

Hardened Populist Politics in Italy and the USA

Both the EUR and GBP have taken a beating in the last month.  The EUR is near key support and may recover somewhat as risk aversion related to Italy eases and Q2 economic reports recover.  However, we see the bounce as limited with Italian political risk set to linger and the potential for growing trade and political tensions with the US.  Higher oil prices should also boost confidence in the US economy over the Eurozone.  We have more confidence in a recovery in the GBP.  PM May is likely to resist the latest bout of political turmoil and progress has been made in Brexit planning and negotiations.  BoE rate hike expectations are likely to come back into focus.

Both the EUR and GBP have taken a beating in the last month.  The EUR is near key support and may recover somewhat as risk aversion related to Italy eases and Q2 economic reports recover.  However, we see the bounce as limited with Italian political risk set to linger and the potential for growing trade and political tensions with the US.  Higher oil prices should also boost confidence in the US economy over the Eurozone.  We have more confidence in a recovery in the GBP.  PM May is likely to resist the latest bout of political turmoil and progress has been made in Brexit planning and negotiations.  BoE rate hike expectations are likely to come back into focus.

The EUR has been undermined in recent days by political risk in Italy.  The untested young leaders of anti-establishment populist parties in coalition talks to govern Italy have argued for freedoms from the rules of Eurozone monetary union.  Italian bond yields rose 16bp on Wednesday, with some contagion to other periphery government bond markets and European bank stocks.  The EUR has lost ground against a range of other currencies and may continue to languish should Italy’s new leaders propose significant new deficit spending that appears to flout the EU Growth and Stability Pact.

The EUR has been undermined in recent days by political risk in Italy.  The untested young leaders of anti-establishment populist parties in coalition talks to govern Italy have argued for freedoms from the rules of Eurozone monetary union.  Italian bond yields rose 16bp on Wednesday, with some contagion to other periphery government bond markets and European bank stocks.  The EUR has lost ground against a range of other currencies and may continue to languish should Italy’s new leaders propose significant new deficit spending that appears to flout the EU Growth and Stability Pact.

Italian Leaders Pose a New Threat to the EUR

In recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets.  Several higher-yielding EM currencies have fallen more sharply; including ARS, TRL, IDR and INR.  There appears to be some momentum behind the recent capital flight from EM that may not quickly reverse.  US bond yields have stabilised near recent highs in the last week, but most other major market yields have retreated, further increasing the USD yield advantage to new highs.  Our report today concentrates on the EUR.  Economic surprise indices for the Eurozone have sunk to new extreme lows and maybe forcing a shake-down in the market’s stubbornly optimistic outlook for the region. EUR has hit a new low for the year, but it is too early to presume it will stabilise.

In recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets.  Several higher-yielding EM currencies have fallen more sharply; including ARS, TRL, IDR and INR.  There appears to be some momentum behind the recent capital flight from EM that may not quickly reverse.  US bond yields have stabilised near recent highs in the last week, but most other major market yields have retreated, further increasing the USD yield advantage to new highs.  Our report today concentrates on the EUR.  Economic surprise indices for the Eurozone have sunk to new extreme lows and maybe forcing a shake-down in the market’s stubbornly optimistic outlook for the region. EUR has hit a new low for the year, but it is too early to presume it will stabilise.

EUR Hits a New Low for 2018, Emerging Markets Under-Perform

Germany

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

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Euro (USDEUR CURNCY)

Euro Inflation, US Economy and Canada Rates Still on Track

Individual country preliminary inflation data for May suggest that Eurozone headline and core measures will rebound more than expected. Without...

Greg Gibbs

Hardened Populist Politics in Italy and the USA

Italian leaders have set on a course to clash with the EU that will be hard to turn back from. A more prolonged crisis appears likely. Trump is...

Greg Gibbs

EUR and GBP Fortunes May Diverge

Both the EUR and GBP have taken a beating in the last month. The EUR is near key support and may recover somewhat as risk aversion related to...

Greg Gibbs

Italian Leaders Pose a New Threat to the EUR

The EUR has been undermined in recent days by political risk in Italy. The untested young leaders of anti-establishment populist parties in...

Greg Gibbs

EUR Hits a New Low for 2018, Emerging Markets Under-Perform

In recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets. Several...

Greg Gibbs

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