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

S interest rates have fallen significantly this year (-36bp) reducing the USD yield advantage.  This has been matched by the GBP and CAD, but AUD and NZD rates have been much more stable than previous episodes of global risk aversion. The Fed is sticking to its outlook for gradual policy tightening, but weak growth is expected to be reported in Q4, activity indicators are weak heading into 2016, medium and longer term inflation expectations are down sharply, and the only plank left supporting rate hike forecasts is the solid labor market.  However, recent unemployment claims have drifted up, and a considerable pause in US rates appears likely.  The US economy has been dragged back to the pack to some extent by the deep fall in oil prices.  While the US energy sector is not all that large, it is much more cyclical than OPEC countries, and activity in this sector has been a factor slowing the US economy.   We may be moving into a phase where confidence in the US economy is waning.  This may tend to weaken the USD in 2016.  Global risk aversion and weaker commodity prices may also weaken commodity and emerging market currencies, but if perceptions on US monetary policy change enough, even these currencies may recover at some point.

S interest rates have fallen significantly this year (-36bp) reducing the USD yield advantage.  This has been matched by the GBP and CAD, but AUD and NZD rates have been much more stable than previous episodes of global risk aversion. The Fed is sticking to its outlook for gradual policy tightening, but weak growth is expected to be reported in Q4, activity indicators are weak heading into 2016, medium and longer term inflation expectations are down sharply, and the only plank left supporting rate hike forecasts is the solid labor market.  However, recent unemployment claims have drifted up, and a considerable pause in US rates appears likely.  The US economy has been dragged back to the pack to some extent by the deep fall in oil prices.  While the US energy sector is not all that large, it is much more cyclical than OPEC countries, and activity in this sector has been a factor slowing the US economy.   We may be moving into a phase where confidence in the US economy is waning.  This may tend to weaken the USD in 2016.  Global risk aversion and weaker commodity prices may also weaken commodity and emerging market currencies, but if perceptions on US monetary policy change enough, even these currencies may recover at some point.

Hao Wang, CFA

Thematic (Sector/Industry)

This is a very short note on my top 5 trade recommendations in 2016 after the close of 2015 based on my previous note of 2016 outlook (i.e. be aggressive in Q1 but defensive thereafter). The basis are higher commodities prices led by copper, crude and some bulk, and relatively weaker USD. <figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/004/820/original/Fig6.png?1451718588" class="editor-image img-responsive" data-smartkarma-image-id="4820"><figcaption class="figcaption">Top five macro trades in 2016Q1</figcaption></figure>In the above trade recommendations, you also have levels of profit target and stop loss. They are ranked by the ratio of reward/risk. Going forward I will keep updating levels…

This is a very short note on my top 5 trade recommendations in 2016 after the close of 2015 based on my previous note of 2016 outlook (i.e. be aggressive in Q1 but defensive thereafter). The basis are higher commodities prices led by copper, crude and some bulk, and relatively weaker USD. Top five macro trades in 2016Q1In the above trade recommendations, you also have levels of profit target and stop loss. They are ranked by the ratio of reward/risk. Going forward I will keep updating levels…

Little changed to support the rebound in EUR and weakness in the USD on Thursday.&nbsp; In fact dovish ECB comments and on-message statements from senior Fed members suggest the policy divergence is likely to intensify next month.&nbsp; Eurozone industrial production showed a flat trend in recent quarters and US labour data were firm.&nbsp; Eurozone GDP and US retail sales today in focus. A comparison of CAD and AUD reveal much in common, we see downside pressure persisting for both.&nbsp; Weaker oil prices an immediate threat for CAD.&nbsp; Bank of Canada speech tonight in focus.&nbsp; Australian RBA minutes and wage data next week pose downside risk for the AUD.

Little changed to support the rebound in EUR and weakness in the USD on Thursday.&nbsp; In fact dovish ECB comments and on-message statements from senior Fed members suggest the policy divergence is likely to intensify next month.&nbsp; Eurozone industrial production showed a flat trend in recent quarters and US labour data were firm.&nbsp; Eurozone GDP and US retail sales today in focus. A comparison of CAD and AUD reveal much in common, we see downside pressure persisting for both.&nbsp; Weaker oil prices an immediate threat for CAD.&nbsp; Bank of Canada speech tonight in focus.&nbsp; Australian RBA minutes and wage data next week pose downside risk for the AUD.

The AUD is being pulled harder in opposite directions with the labour data suggesting the non-mining sector is coming to life, but weaker commodity demand in China and weak energy prices are dragging harder from below; best to stay on the side-lines for now.&nbsp; Oil prices appear to be responding to concerns over too much supply.&nbsp; The ECB has said low oil prices are a contributing factor to its assessment that more policy easing may be required. We stick to our weaker EUR view, as other major CBs are more prepared to look through the dis-inflation risk.

The AUD is being pulled harder in opposite directions with the labour data suggesting the non-mining sector is coming to life, but weaker commodity demand in China and weak energy prices are dragging harder from below; best to stay on the side-lines for now.&nbsp; Oil prices appear to be responding to concerns over too much supply.&nbsp; The ECB has said low oil prices are a contributing factor to its assessment that more policy easing may be required. We stick to our weaker EUR view, as other major CBs are more prepared to look through the dis-inflation risk.

AmpGFX - AUD pulled harder in opposite directions

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Although we continue to believe that crude oil prices are well below the levels required to incentivize sufficient investment to meet demand beyond 2017, we are reducing our long-term price outlook by $5 per barrel to $70 Brent and $64 WTI to reflect bearish developments in recent quarters in the outlook for low-cost supply and industrywide cost deflation.While $5 represents a relatively small adjustment to our long-term oil price assumption, we are also adjusting our near-term activity and pricing forecasts to reflect our belief that industry oversupply is making it very likely that crude markets will not approach any semblance of normalcy until 2017.Taken together, these changes have a meaningful impact on a handful of our energy sector fair value estimates, particularly firms that currently employ large amounts of leverage.&nbsp;We are beginning to publish new fair value estimates today, and all companies will be live two weeks from today.Analyst: Mark TaylorSector Head: Mathew HodgeFull report below the fold....

Although we continue to believe that crude oil prices are well below the levels required to incentivize sufficient investment to meet demand beyond 2017, we are reducing our long-term price outlook by $5 per barrel to $70 Brent and $64 WTI to reflect bearish developments in recent quarters in the outlook for low-cost supply and industrywide cost deflation.While $5 represents a relatively small adjustment to our long-term oil price assumption, we are also adjusting our near-term activity and pricing forecasts to reflect our belief that industry oversupply is making it very likely that crude markets will not approach any semblance of normalcy until 2017.Taken together, these changes have a meaningful impact on a handful of our energy sector fair value estimates, particularly firms that currently employ large amounts of leverage.&nbsp;We are beginning to publish new fair value estimates today, and all companies will be live two weeks from today.Analyst: Mark TaylorSector Head: Mathew HodgeFull report below the fold....

Oil Price Outlook: All Signs Point to a Brutal Near-Term and a Meaningful Long-Term Recovery

Australia

Origin Energy Limited is an integrated energy company. The Company is an energy retailer in Australia across electricity, gas and LPG. Origin Energy also holds a generation portfolio and fuel position and a renewable energy portfolio, as well as unconventional gas and LNG interests.

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Origin Energy (ORG AU)

Confidence in Fed Hikes Waning

S interest rates have fallen significantly this year (-36bp) reducing the USD yield advantage. This has been matched by the GBP and CAD, but AUD...

Greg Gibbs

Top 5 Macro Trades in 2016Q1

This is a very short note on my top 5 trade recommendations in 2016 after the close of 2015 based on my previous note of 2016 outlook (i.e. be...

Hao Wang, CFA

AmpGFX - CAD and AUD in the hot-seat

Little changed to support the rebound in EUR and weakness in the USD on Thursday. In fact dovish ECB comments and on-message statements from...

Greg Gibbs

AmpGFX - AUD pulled harder in opposite directions

The AUD is being pulled harder in opposite directions with the labour data suggesting the non-mining sector is coming to life, but weaker commodity...

Greg Gibbs

Oil Price Outlook: All Signs Point to a Brutal Near-Term and a Meaningful Long-Term Recovery

Although we continue to believe that crude oil prices are well below the levels required to incentivize sufficient investment to meet demand beyond...

Morningstar, Inc.

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