Macro Strategist, Saxo Capital Markets

Kay Van-Petersen

Macro Strategist

Saxo Capital Markets

Thematic (Sector/Industry)

Probably the next most important thing is actually not the Brexit, but the next few Fed hikes<ul><li>Whilst Jun is live, I think Jul or Sep are more likely with the second hike in Dec, those Fed minutes from last week left very little to the imagination. They were hawkish</li><li>Fed implied probability of two rate hikes by year end is too low at 25%, should be closer to 50. The street is behind the curve on this and/or does not believe it (ripples with 2015)</li><li>Where does the DXY go, given we got to 100.17 (Nov 30) going into just one rate hike in Dec last year? Where do US 10yrs go, given we are at 1.83% &amp; we were c. 2.30% in Dec last year?</li><li>Flash PMI themed week ahead, including key GDP readings out of Europe. UK will get 2nd GDP reading with mkt expecting +2.1% YoY</li></ul>

Probably the next most important thing is actually not the Brexit, but the next few Fed hikesWhilst Jun is live, I think Jul or Sep are more likely with the second hike in Dec, those Fed minutes from last week left very little to the imagination. They were hawkishFed implied probability of two rate hikes by year end is too low at 25%, should be closer to 50. The street is behind the curve on this and/or does not believe it (ripples with 2015)Where does the DXY go, given we got to 100.17 (Nov 30) going into just one rate hike in Dec last year? Where do US 10yrs go, given we are at 1.83% &amp; we were c. 2.30% in Dec last year?Flash PMI themed week ahead, including key GDP readings out of Europe. UK will get 2nd GDP reading with mkt expecting +2.1% YoY

Global Macro Take: WK 21 – The Fed To Hike Over The Next 3 Meetings [Jun 15, Jul 27, Sep 21]

<ul><li>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 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

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

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.

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

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.
​
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.

<div class="content-highlight">The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors.</div> We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: <ul><li><div class="content-highlight">The failure of some…</div></li></ul>

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors. We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: The failure of some…

The recent rebound in global assets has been driven by emerging market and USA assets, while other developed markets, particularly Japanese and Eurozone assets have lagged behind and indeed their bank stocks have sagged.  The rise in US assets is supported by resilience in US economic data, a dovish turn by the Fed and a weaker USD.  Stronger EM assets have been supported by a recovery in oil and other commodity prices, policy easing by China, Europe, and Japan, a dovish Fed, and improved outlook for Chinese growth, currency and asset markets. Weaker growth indicators in Japan, weaker inflation expectations in Europe, weaker bank equites, and overall sluggish equity performances suggest policymakers will work hard to prevent further strength in EUR and JPY.  It is hard to get behind the further rally in these currencies.  If risk aversion returns they may rise, but even then these gains are likely to be limited and gold should be favored as the alternative safe haven.  The outlook for EM assets is now more balanced after investors have piled back in over the last month.  The recent down-turn in oil prices may return as a dampening influence on EM assets and currencies. Investors may also start to consider the Fed coming back into play by mid-year.

The recent rebound in global assets has been driven by emerging market and USA assets, while other developed markets, particularly Japanese and Eurozone assets have lagged behind and indeed their bank stocks have sagged.  The rise in US assets is supported by resilience in US economic data, a dovish turn by the Fed and a weaker USD.  Stronger EM assets have been supported by a recovery in oil and other commodity prices, policy easing by China, Europe, and Japan, a dovish Fed, and improved outlook for Chinese growth, currency and asset markets. Weaker growth indicators in Japan, weaker inflation expectations in Europe, weaker bank equites, and overall sluggish equity performances suggest policymakers will work hard to prevent further strength in EUR and JPY.  It is hard to get behind the further rally in these currencies.  If risk aversion returns they may rise, but even then these gains are likely to be limited and gold should be favored as the alternative safe haven.  The outlook for EM assets is now more balanced after investors have piled back in over the last month.  The recent down-turn in oil prices may return as a dampening influence on EM assets and currencies. Investors may also start to consider the Fed coming back into play by mid-year.

AmpGFX - Warning Signs for EUR and JPY, EM Rally Mature, Gold May Be Poised for Renewed Strength

Australia

Woodside Petroleum Limited explores for and produces oil and gas from offshore and onshore facilities located in Western Australia and Northern Territory. The Company operates numerous oil and gas fields and pipelines throughout Australia, United States and Mauritania and its products include liquefied natural gas, domestic gas, condensate, crude oil and liquefied petroleum gas.

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Woodside Petroleum (WPL AU)

Global Macro Take: WK 21 – The Fed To Hike Over The Next 3 Meetings [Jun 15, Jul 27, Sep 21]

Probably the next most important thing is actually not the Brexit, but the next few Fed hikes Whilst Jun is live, I think Jul or Sep are more...

Kay Van-Petersen

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

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

Beware Impairments in EM and Asia

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for...

Mark Artherton

AmpGFX - Warning Signs for EUR and JPY, EM Rally Mature, Gold May Be Poised for Renewed Strength

The recent rebound in global assets has been driven by emerging market and USA assets, while other developed markets, particularly Japanese and...

Greg Gibbs

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