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

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

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Thematic (Sector/Industry)

<ul><li>Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.</li></ul><ul><li>In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.</li><li>Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.</li></ul>

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

Equity Bottom-Up

iShares MSCI Australia / Equity Bottom-Up

<ul><li>In the second weekly wrap of top-down and bottom-up developments during Australia&rsquo;s reporting season, Evidente discusses the PBOC&rsquo;s rationale for devaluing the CNY/USD rate.&nbsp; Although it confirms that the authorities remain concerned about the state of the economy, this in itself is hardly new news.&nbsp; The peg to the dollar had effectively seen the yuan appreciate by 25% on a trade weighted basis over the past four years, and the devaluation now returns the yuan to the level that prevailed in late 2014, hardly a harbinger of a currency war.&nbsp; The PBOC is right to seek to re-align the currency with the economy&rsquo;s shortfall in aggregate demand. &nbsp;</li><li>In stock news for Australia, I suggest that investors avoid Realestate.com in the short-term because APRA&rsquo;s macro-prudential policies should to lead to a slowdown in credit growth to housing investors, which has been driving housing turnover and real estate listings higher.&nbsp; And a key lesson from Ansell&rsquo;s earnings miss is that investors need to beware that other globally dispersed, complex firms could also deliver an untimely earnings torpedo.</li></ul>

In the second weekly wrap of top-down and bottom-up developments during Australia&rsquo;s reporting season, Evidente discusses the PBOC&rsquo;s rationale for devaluing the CNY/USD rate.&nbsp; Although it confirms that the authorities remain concerned about the state of the economy, this in itself is hardly new news.&nbsp; The peg to the dollar had effectively seen the yuan appreciate by 25% on a trade weighted basis over the past four years, and the devaluation now returns the yuan to the level that prevailed in late 2014, hardly a harbinger of a currency war.&nbsp; The PBOC is right to seek to re-align the currency with the economy&rsquo;s shortfall in aggregate demand. &nbsp;In stock news for Australia, I suggest that investors avoid Realestate.com in the short-term because APRA&rsquo;s macro-prudential policies should to lead to a slowdown in credit growth to housing investors, which has been driving housing turnover and real estate listings higher.&nbsp; And a key lesson from Ansell&rsquo;s earnings miss is that investors need to beware that other globally dispersed, complex firms could also deliver an untimely earnings torpedo.

Australia

Matrix Composites & Engineering Ltd. is an engineering company. The Company specialises in the design, application and manufacturing of products based on advanced composite materials, engineering plastics and elastomers.

Whitehaven Coal Limited mines and sells metallurgical and thermal coals to the global steel, power generation, and metallurgical industries.

Viva Energy Group Limited markets petroleum products. The Company focuses on making, importing, and delivering the fuels, lubricants, chemicals, and bitumen. Viva Energy Group serves the mining, aviation, and marine industries in Australia.

New Hope Corporation Limited is a thermal coal production company based in Australia. The Company also has interests in logistics and infrastructure operations in Australia as well.

Paladin Energy Ltd operates as a mining company. The Company explores and mines uranium. Paladin Energy serves customers worldwide.

Beach Energy Limited explores for, develops, and produces oil and natural gas. The Company holds interests in exploration and production tenements in Australia, USA, Egypt, Tanzania and Papua New Guinea.

Washington H. Soul Pattinson & Company Limited is an investment holding company. The Company owns shares and properties, coal mining, bulk handling, commercial television licensee, telecommunications carrier, merchant banking, funds management, pharmaceutical retailing, manufacture, processing and marketing of biscuits and cakes.

Washington H. Soul Pattinson and Co. Ltd (SOL AU)

Stanmore Coal Ltd. explores for coal in Australia. The Company's interests include a portfolio of coal assets within Queensland's Bowen and Surat Basin coal provinces.

Emerald Resources NL is an oil and gas exploration company with exploration activities in the United States and Australia.

Karoon Energy Ltd operates as an exploration company. The Company explores and acquires oil and gas exploration assets. Karoon Energy serves customers worldwide.

Patterson-UTI Energy, Inc. provides land-based drilling services to major and independent oil and natural gas companies.  The Company conducts drilling operations in Texas, New Mexico, Utah, Oklahoma, Louisiana, and western Canada. Patterson-UTI is also involved in pressure pumping, oil and gas exploration and production, and drilling and completion fluids services.

Tidewater Inc. provides offshore supply vessels and marine support services to the offshore energy exploration, development, and production industry. The Company tows and anchor-handles mobile drilling rigs and equipment, transports supplies and personnel, and supports pipe laying and other offshore construction activities.

Valaris Limited provides offshore contract drilling services. The Company owns, operates, and manages rig fleets and provides drilling services. Valaris serves customers worldwide.

Transocean Ltd. is an offshore drilling contractor.  The Company owns or operates mobile offshore drilling units, inland drilling barges, and other assets utilized in the support of offshore drilling activities worldwide. Transocean specializes in technically demanding segments of the offshore drilling business, including deepwater and harsh environment drilling services.

Yantai Jereh Oilfield Services Group Co., Ltd develops, manufactures and sells oil field equipment.  The Company's products include well cementing equipment, well fracturing equipment, and natural gas compression and transportation equipment.

Subsea 7 SA offers oilfield services.  The Company designs, fabricates, builds and installs equipment for the offshore oil industry.  Subsea 7 builds flexible flowlines, risers, umbilicals and other equipment.  The Company operates in the Gulf of Mexico, the Asia Pacific region, the North Sea and the Mediterranean; and offshore Africa, the Middle East, and South America.

China Oilfield Services Limited provides oilfield services. The Company provides geophysical prospecting, drilling, oilfield technology development, and other services. China Oilfield Services also operates transportation businesses.

Helmerich & Payne, Inc. provides contract drilling of oil and gas wells in the Gulf of Mexico and South America. The Company operates land rigs and platform rigs.

Offshore Oil Engineering Co., Ltd. provides offshore oil engineering services, including designing, construction, installation, and repair and maintenance services.  The Company's main businesses include oil/gas exploration engineering, subsea pipeline laying, oil/gas field equipment testing and maintenance, as well as pressure container and steel structure manufacturing.

Archrock, Inc. operates as a natural gas contract compression services company. The Company offers natural gas compression and aftermarket services, as well as provides used equipment for oil and gas industry. Archrock serves customers in the United States.

WorleyParsons Limited provides professional services through alliance and integrated service contracts to the energy, resource and complex process industries.  The Company provides its services to industrial sectors such as oil and gas refining, petrochemicals and chemicals, minerals and metals, power and water and industrial and infrastructure.

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WorleyParsons Ltd (WOR AU)

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

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards...

Sam Ferraro

Weekly Impressions

In the second weekly wrap of top-down and bottom-up developments during Australia’s reporting season, Evidente discusses the PBOC’s rationale for...

Sam Ferraro

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