Macro Strategist, Saxo Capital Markets

Kay Van-Petersen

Macro Strategist

Saxo Capital Markets

Thematic (Sector/Industry)

<ul><li>Key close on DXY above 94.50 on <span data-term="goog_403356677">a Frid</span>ay, liquidating my thesis on a tactical USD liquidation phase. Seems like we’ve now had a very sharp V-shaped bounce from the pullback 2 wks back</li><li>If the strong USD trend continues, we’d expect risk-off to be the flavour of the moment with EM, Commodities &amp; equities in general set to decline</li><li>Check out the long NOKSEK SaxoStrats idea flagged by our Head of FX Strategy John Hardy – I like the thesis, it definitely worth doing some heavy lifting on this</li><li>Plus a few links to the Sohn Investment Conference where movers &amp; shakers such as Chanos &amp; Druckenmiller were talking their views </li></ul>

Key close on DXY above 94.50 on a Friday, liquidating my thesis on a tactical USD liquidation phase. Seems like we’ve now had a very sharp V-shaped bounce from the pullback 2 wks backIf the strong USD trend continues, we’d expect risk-off to be the flavour of the moment with EM, Commodities &amp; equities in general set to declineCheck out the long NOKSEK SaxoStrats idea flagged by our Head of FX Strategy John Hardy – I like the thesis, it definitely worth doing some heavy lifting on thisPlus a few links to the Sohn Investment Conference where movers &amp; shakers such as Chanos &amp; Druckenmiller were talking their views 

Global Macro Take: WK 20 – The US Dollar Just Won't Die

EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

<p>This weekend saw the retirement of long-serving Saudi oil minister Ali al-Naimi and his replacement by the Chairman of Aramco, Khalid al-Falih.</p><p>At 80 years of age, the retirement of al-Naimi had been on the cards for a number of years, with some indications that it had been scheduled to occur five years ago, but was postponed given the need for stability as the Arab Spring erupted in the region.</p><p>Now that he has moved on to a position as advisor to the Royal Court, whether Saudi oil policy will…</p>

This weekend saw the retirement of long-serving Saudi oil minister Ali al-Naimi and his replacement by the Chairman of Aramco, Khalid al-Falih.At 80 years of age, the retirement of al-Naimi had been on the cards for a number of years, with some indications that it had been scheduled to occur five years ago, but was postponed given the need for stability as the Arab Spring erupted in the region.Now that he has moved on to a position as advisor to the Royal Court, whether Saudi oil policy will…

New Saudi Oil Minister, Old Saudi Oil Policy

<p>It has been an interesting few weeks for observers of Saudi Arabia as Doha oil freeze talks failed, concerns re-emerged over the stability of the Saudi-US relationship and months of press coverage culminated in the announcement of Saudi Vision 2030 today.</p><p>This note analyses some of the drivers of the changes we have seen in Saudi policy and the likely impact of these going forward on local markets and the oil price.</p><p>The upshot is that I am, just as was the case in 2015, once more bearish on oil and oil-related equities into summer, although I retain my bullish view longer term.</p><p>This should also prevent significant appreciation in Middle East markets short-term, although it is likely to be an interesting few years ahead as reforms, many of which necessitate increased economic and market liberalization and sharp increases in FDI, start to come in force.</p><p> </p>

It has been an interesting few weeks for observers of Saudi Arabia as Doha oil freeze talks failed, concerns re-emerged over the stability of the Saudi-US relationship and months of press coverage culminated in the announcement of Saudi Vision 2030 today.This note analyses some of the drivers of the changes we have seen in Saudi policy and the likely impact of these going forward on local markets and the oil price.The upshot is that I am, just as was the case in 2015, once more bearish on oil and oil-related equities into summer, although I retain my bullish view longer term.This should also prevent significant appreciation in Middle East markets short-term, although it is likely to be an interesting few years ahead as reforms, many of which necessitate increased economic and market liberalization and sharp increases in FDI, start to come in force. 

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.

Macroeconomics

<p><em>The recent rising trend in the JPY and falling trend in the USD have had a life of their own this year, unwinding excessive positioning built up from end 2012 to mid-2015 for the JPY and from mid-2014 until January this year for the USD.  These trend reversals have contributed to the volatility in global markets that were being buffeted by the upheaval in Chinese markets and commodity prices, and more recently by Brexit fears. The rebounding JPY added to risk aversion, while the falling USD boosted risk appetite, the feedback from a falling to USD to a rising JPY added to the churn and uncertainty.  However, the JPY and USD have started to stabilize in recent days and excessive positioning appears to have been significantly cleansed, allowing markets to see more clearly improving conditions in Chinese and EM economies and focus on the rebound in commodity markets.  Brexit fears are likely to remain heightened and indeed may intensify as we approach the 23 June referendum.  This may tend to keep risk appetite and USD/JPY contained below 110.  But investors may still tend to seek out EM and commodity currencies to avoid negative rates and record low yields in major economies.  Brexit fears have weighed on European currencies and we may see further gains in EM and commodity currencies against the EUR</em>.</p>

The recent rising trend in the JPY and falling trend in the USD have had a life of their own this year, unwinding excessive positioning built up from end 2012 to mid-2015 for the JPY and from mid-2014 until January this year for the USD.  These trend reversals have contributed to the volatility in global markets that were being buffeted by the upheaval in Chinese markets and commodity prices, and more recently by Brexit fears. The rebounding JPY added to risk aversion, while the falling USD boosted risk appetite, the feedback from a falling to USD to a rising JPY added to the churn and uncertainty.  However, the JPY and USD have started to stabilize in recent days and excessive positioning appears to have been significantly cleansed, allowing markets to see more clearly improving conditions in Chinese and EM economies and focus on the rebound in commodity markets.  Brexit fears are likely to remain heightened and indeed may intensify as we approach the 23 June referendum.  This may tend to keep risk appetite and USD/JPY contained below 110.  But investors may still tend to seek out EM and commodity currencies to avoid negative rates and record low yields in major economies.  Brexit fears have weighed on European currencies and we may see further gains in EM and commodity currencies against the EUR.

AmpGFX - Calmer USD and JPY, Weaker EUR, More Upside for EM and Commodity Currencies

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

<h2><strong>Summary points</strong></h2><ul>
<li><div class="content-highlight"><strong>1986 remians the best comparable for oil prices now in our opinion.</strong></div></li>
<li><div class="content-highlight"><strong>Adjusting the oil price for the action of the dollar improves the analysis.  The dollar and oil/commodities are different and should be treated as such.</strong></div></li>
<li><div class="content-highlight"><strong>Fundamental factors of supply and demand provide a mixed picture for oil.  The 'energy feedback loop' is often overlooked.</strong></div></li>
<li><div class="content-highlight"><strong>The best the <em>market</em> can do is assume that today's real oil price will be the oil price in 12 months time.</strong></div></li>
<li><div class="content-highlight">
<strong>Financialisation of commodities is a big</strong>…</div></li>
</ul>

Summary points
1986 remians the best comparable for oil prices now in our opinion.
Adjusting the oil price for the action of the dollar improves the analysis.  The dollar and oil/commodities are different and should be treated as such.
Fundamental factors of supply and demand provide a mixed picture for oil.  The 'energy feedback loop' is often overlooked.
The best the market can do is assume that today's real oil price will be the oil price in 12 months time.

Financialisation of commodities is a big…


China

Inner Mongolia Yitai Coal Company Limited is a large-scale energy enterprise primarily engaged in coal production, transportation, and sales, including mining, processing, and distribution. The company also operates in coal-related chemical processing, producing environmentally friendly thermal coal, liquid wax, naphtha, and liquefied petroleum gas. It provides extensive railway and road transportation services. The company was founded in August 1997 and is headquartered in Ordos City, Inner Mongolia, China.

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Inner Mongolia Yitai Coal (3948 HK)

Global Macro Take: WK 20 – The US Dollar Just Won't Die

Key close on DXY above 94.50 on a Friday, liquidating my thesis on a tactical USD liquidation phase. Seems like we’ve now had a very sharp...

Kay Van-Petersen

New Saudi Oil Minister, Old Saudi Oil Policy

This weekend saw the retirement of long-serving Saudi oil minister Ali al-Naimi and his replacement by the Chairman of Aramco, Khalid al-Falih.At...

Emad Mostaque

Saudi: A New Hope?

It has been an interesting few weeks for observers of Saudi Arabia as Doha oil freeze talks failed, concerns re-emerged over the stability of the...

Emad Mostaque

AmpGFX - Calmer USD and JPY, Weaker EUR, More Upside for EM and Commodity Currencies

The recent rising trend in the JPY and falling trend in the USD have had a life of their own this year, unwinding excessive positioning built up...

Greg Gibbs

Oil After 50%: Where Now for Stocks?

Summary points 1986 remians the best comparable for oil prices now in our opinion. Adjusting the oil price for the action of the dollar improves...

Mark Artherton

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