Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul>
<li>The UK unemployment rate rose by 5bps to 4.09% in Sep-18, contrary to expectations. Underlying momentum had already weakened enough to make this a real risk.</li>
<li>Rising vacancies and pay growth make this look more like a small supply shock than a disinflationary demand distortion.</li>
<li>The BoE’s supply-side update in Feb-19 could allow it to temper disappointment in its forecasts. A further UR rise in Nov-18 is possible and would make an early 2019 rate hike difficult. Nonetheless, Brexit remains the primary uncertainty.</li>
</ul>


The UK unemployment rate rose by 5bps to 4.09% in Sep-18, contrary to expectations. Underlying momentum had already weakened enough to make this a real risk.
Rising vacancies and pay growth make this look more like a small supply shock than a disinflationary demand distortion.
The BoE’s supply-side update in Feb-19 could allow it to temper disappointment in its forecasts. A further UR rise in Nov-18 is possible and would make an early 2019 rate hike difficult. Nonetheless, Brexit remains the primary uncertainty.


UK Cycle: UR Rise in Sep-18 Is Not Disinflationary

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 market appears to be taking a grimmer view of big global risk factors (Brexit, Italy, Chinese economy, and US trade policy).  The relative certainty that the Fed will persist with rate hikes despite souring global growth confidence may by driving up the USD.  Asian markets may be undermined by signs of weaker demand for tech goods, and a lack of bounce in Chinese assets pointing to deeper more persistent troubles in China over an above fears over US trade policy.  The EUR may be responding belatedly to persistently softer growth in the Eurozone and fading confidence in its export markets.  Brexit uncertainty has increased, dragging down GBP, but it could rebound quickly if the market contemplates fresh elections and a second referendum.  Two-way risks remain into year end.  China is rolling out policies to support its economy, the Xi-Trump meeting may ease trade tensions, US political risks may become more elevated, oil price falls may support the global economy, and US rate hike expectations may fade if US equities slide accelerates.  However, a relatively robust US economy, high USA yields, and fading global confidence may drive further gains in the USD in coming weeks.

The market appears to be taking a grimmer view of big global risk factors (Brexit, Italy, Chinese economy, and US trade policy).  The relative certainty that the Fed will persist with rate hikes despite souring global growth confidence may by driving up the USD.  Asian markets may be undermined by signs of weaker demand for tech goods, and a lack of bounce in Chinese assets pointing to deeper more persistent troubles in China over an above fears over US trade policy.  The EUR may be responding belatedly to persistently softer growth in the Eurozone and fading confidence in its export markets.  Brexit uncertainty has increased, dragging down GBP, but it could rebound quickly if the market contemplates fresh elections and a second referendum.  Two-way risks remain into year end.  China is rolling out policies to support its economy, the Xi-Trump meeting may ease trade tensions, US political risks may become more elevated, oil price falls may support the global economy, and US rate hike expectations may fade if US equities slide accelerates.  However, a relatively robust US economy, high USA yields, and fading global confidence may drive further gains in the USD in coming weeks.

A Grimmer View on Global Risks Boosting the Dollar

<ul>
<li>Tuesday’s UK labour market report should reveal further good news on wage growth, but there is a risk of a temporary rise in the UR, which would offset that.</li>
<li>My UK inflation forecasts for Oct-18 are in line with the Consensus, but there are risks. CPI inflation is on the cusp of rounding higher after its latest disappointment while the RPI is even more precariously balanced but with a downside tilt instead.</li>
</ul>


Tuesday’s UK labour market report should reveal further good news on wage growth, but there is a risk of a temporary rise in the UR, which would offset that.
My UK inflation forecasts for Oct-18 are in line with the Consensus, but there are risks. CPI inflation is on the cusp of rounding higher after its latest disappointment while the RPI is even more precariously balanced but with a downside tilt instead.


Preview: UK Oct-18 Inflation and Q3 Labour Market

<ul>
<li>Monthly UK GDP growth was flat again in September, but earlier strength raised the quarterly pace to 0.6% q-o-q in 3Q18, up from 0.4% in 2Q18, as expected.</li>
<li>A negligible statistical carry-over effect and little sign of a resurgence during 4Q18 mean GDP growth remains likely to at least half to 0.3% q-o-q.</li>
</ul>


Monthly UK GDP growth was flat again in September, but earlier strength raised the quarterly pace to 0.6% q-o-q in 3Q18, up from 0.4% in 2Q18, as expected.
A negligible statistical carry-over effect and little sign of a resurgence during 4Q18 mean GDP growth remains likely to at least half to 0.3% q-o-q.


FLASH: UK GDP Growth Halving After a 3Q18 Surge

<ul>
<li>The BoE MPC was unanimous in voting for no policy changes in November, as widely expected, after hiking Bank rate to 0.75% in August. Amid acute uncertainty about the Brexit deal and responses to that, the BoE is temporarily treading water.</li>
<li>Surprisingly resilient inflation forecasts have slightly raised the hawkish tensions despite assuming tighter monetary conditions. The 60% probability of exceeding the target in 2yrs is consistent with BoE forecasts ahead of previous rate hikes.</li>
<li>A Feb-19 hike requires a deal before Christmas and for Sterling not to deliver all the tightening. I maintain my view on the compromise, timeline and GBP reaction.</li>
</ul>


The BoE MPC was unanimous in voting for no policy changes in November, as widely expected, after hiking Bank rate to 0.75% in August. Amid acute uncertainty about the Brexit deal and responses to that, the BoE is temporarily treading water.
Surprisingly resilient inflation forecasts have slightly raised the hawkish tensions despite assuming tighter monetary conditions. The 60% probability of exceeding the target in 2yrs is consistent with BoE forecasts ahead of previous rate hikes.
A Feb-19 hike requires a deal before Christmas and for Sterling not to deliver all the tightening. I maintain my view on the compromise, timeline and GBP reaction.


BoE: Hiking Threshold Conditionally Met for Feb-19

United Kingdom

The British Pound Sterling is the official currency of The United Kingdom. 

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UK Cycle: UR Rise in Sep-18 Is Not Disinflationary

The UK unemployment rate rose by 5bps to 4.09% in Sep-18, contrary to expectations. Underlying momentum had already weakened enough to make this a...

Phil Rush

A Grimmer View on Global Risks Boosting the Dollar

The market appears to be taking a grimmer view of big global risk factors (Brexit, Italy, Chinese economy, and US trade policy). The relative...

Greg Gibbs

Preview: UK Oct-18 Inflation and Q3 Labour Market

Tuesday’s UK labour market report should reveal further good news on wage growth, but there is a risk of a temporary rise in the UR, which would...

Phil Rush

FLASH: UK GDP Growth Halving After a 3Q18 Surge

Monthly UK GDP growth was flat again in September, but earlier strength raised the quarterly pace to 0.6% q-o-q in 3Q18, up from 0.4% in 2Q18, as...

Phil Rush

BoE: Hiking Threshold Conditionally Met for Feb-19

The BoE MPC was unanimous in voting for no policy changes in November, as widely expected, after hiking Bank rate to 0.75% in August. Amid acute...

Phil Rush

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