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

More stability in oil prices, anticipated policy easing by the ECB, intensified efforts in China to control its currency, and a Fed that is keeping its policy options open and likely to delay policy tightening on recent ebbing trends in US growth and global market uncertainty are likely to combine to  support global equity markets and risk appetite.  We anticipate a lengthy consolidation in equities after a tough start to the year, and some recovery in commodity currencies, mostly against the EUR.  Weak Chinese economic growth and more volatile Chinese equities, indicative of domestic financial stress, pose the biggest threat to this more benign near term outlook.  However, a good deal of the negative outlook for Chinese commodity demand may be baked in the cake.

More stability in oil prices, anticipated policy easing by the ECB, intensified efforts in China to control its currency, and a Fed that is keeping its policy options open and likely to delay policy tightening on recent ebbing trends in US growth and global market uncertainty are likely to combine to  support global equity markets and risk appetite.  We anticipate a lengthy consolidation in equities after a tough start to the year, and some recovery in commodity currencies, mostly against the EUR.  Weak Chinese economic growth and more volatile Chinese equities, indicative of domestic financial stress, pose the biggest threat to this more benign near term outlook.  However, a good deal of the negative outlook for Chinese commodity demand may be baked in the cake.

AmpGFX - More Stable Oil and EUR to Underperform Commodity Currencies

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.

Equity Bottom-Up

<ul><li>Evidente has updated the performance and ranking of its proprietary systematic model of earnings certainty or predictability and found that stocks that ranked strongly at the end of 2014 (based on real time information) strongly out-performed the worst ranked stocks over the course of 2015, with the long-short return ranging from 10%-30%.  The performance is impressive because the model does not include measures of dividends, growth, momentum or valuations.</li><li>Companies attain a high score for earnings predictability for the following attributes: low volatility, low beta, low dispersion, low EPS volatility and those that have been listed for a long time.  Firm vintage is designed to capture the dynamics around investor learning: investors typically assign higher standard errors to the growth prospects for newly listed firms.  The rationale for firm vintage draws on the work of Lubos Pastor at the University of Chicago.</li><li>I demonstrate that Evidente's model does a remarkably good job of assessing and summarising the key risk attributes of stocks.  The top 5 ranked stocks for 2016 are: AMC, ASX, BXB, RHC and SHL, while the worst ranked stocks include: MYR, BRS, SPO, GMA and SVW. </li></ul>

Evidente has updated the performance and ranking of its proprietary systematic model of earnings certainty or predictability and found that stocks that ranked strongly at the end of 2014 (based on real time information) strongly out-performed the worst ranked stocks over the course of 2015, with the long-short return ranging from 10%-30%.  The performance is impressive because the model does not include measures of dividends, growth, momentum or valuations.Companies attain a high score for earnings predictability for the following attributes: low volatility, low beta, low dispersion, low EPS volatility and those that have been listed for a long time.  Firm vintage is designed to capture the dynamics around investor learning: investors typically assign higher standard errors to the growth prospects for newly listed firms.  The rationale for firm vintage draws on the work of Lubos Pastor at the University of Chicago.I demonstrate that Evidente's model does a remarkably good job of assessing and summarising the key risk attributes of stocks.  The top 5 ranked stocks for 2016 are: AMC, ASX, BXB, RHC and SHL, while the worst ranked stocks include: MYR, BRS, SPO, GMA and SVW. 

Earnings Certainty Continues to Deliver Strong Returns

Independent Insight Provider

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…

<ul><li>Global commodity prices have continued to slide in recent months, with the RBA Commodity Price index down another 5% in US dollar terms.&nbsp; Nonetheless, the Australian dollar has been resilient in the face of commodity headwinds, rising by around 4% against the US dollar, thanks to&nbsp;the extreme under-valuation that the A$ had reached by the end of September.&nbsp;</li><li>As a result of the recent&nbsp;lift in the A$ and continued weakness in commodity prices, the model's strong A$ buy signal has diminished, with the currency now trading only 3% below fair value.</li><li>Evidente's basket of ASX listed US dollar earners&nbsp;has yielded&nbsp;poor returns since peaking in March despite renewed depreciation of the A$/US$.&nbsp; Limited valuation support based on ROE adjusted P/B ratios suggests that the performance of the basket will continue to be capped in the near-term.&nbsp;</li></ul>

Global commodity prices have continued to slide in recent months, with the RBA Commodity Price index down another 5% in US dollar terms.&nbsp; Nonetheless, the Australian dollar has been resilient in the face of commodity headwinds, rising by around 4% against the US dollar, thanks to&nbsp;the extreme under-valuation that the A$ had reached by the end of September.&nbsp;As a result of the recent&nbsp;lift in the A$ and continued weakness in commodity prices, the model's strong A$ buy signal has diminished, with the currency now trading only 3% below fair value.Evidente's basket of ASX listed US dollar earners&nbsp;has yielded&nbsp;poor returns since peaking in March despite renewed depreciation of the A$/US$.&nbsp; Limited valuation support based on ROE adjusted P/B ratios suggests that the performance of the basket will continue to be capped in the near-term.&nbsp;

Buy Signal for the A$ Weakens as the Currency Remains Resilient in the Face of Commodity Headwinds

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

<ul><li class="p1">The outlook for copper prices is worse than most think. Battered copper mining stocks may now screen as cheap, but we see further downside.&nbsp;</li><li class="p2">Copper price declines of the past few months have caused many analysts to pare their near-term price forecasts. Yet longer term, most remain bullish, citing copper's geological scarcity and continued, albeit slower, Chinese demand growth.</li><li class="p2">Most analysts forecast an eventual recovery to $2.25-$3.00 per pound, an outlook that informs aggressive price targets on copper mining stocks.&nbsp;</li><li class="p2">We forecast a long-term price of $2.00 per pound and expect ebbing Chinese demand, which accounts for roughly half of the global total, to push prices below $2.00 in 2016 and 2017.</li><li class="p2">We expect China's copper needs to fall as real estate activity fades to a level more commensurate with underlying urbanization trends and power spending shifts away from copper-heavy distribution to copper-light transmission.</li><li class="p2">On the supply side, cost deflation, a flattening of the cost curve, and rising scrap supplies all threaten prices.</li><li class="p2">We see significant downside risk in copper mining stocks.</li></ul>Analysts: Jeffrey Stafford, CFA &amp; Daniel Rohr, CFA

The outlook for copper prices is worse than most think. Battered copper mining stocks may now screen as cheap, but we see further downside.&nbsp;Copper price declines of the past few months have caused many analysts to pare their near-term price forecasts. Yet longer term, most remain bullish, citing copper's geological scarcity and continued, albeit slower, Chinese demand growth.Most analysts forecast an eventual recovery to $2.25-$3.00 per pound, an outlook that informs aggressive price targets on copper mining stocks.&nbsp;We forecast a long-term price of $2.00 per pound and expect ebbing Chinese demand, which accounts for roughly half of the global total, to push prices below $2.00 in 2016 and 2017.We expect China's copper needs to fall as real estate activity fades to a level more commensurate with underlying urbanization trends and power spending shifts away from copper-heavy distribution to copper-light transmission.On the supply side, cost deflation, a flattening of the cost curve, and rising scrap supplies all threaten prices.We see significant downside risk in copper mining stocks.Analysts: Jeffrey Stafford, CFA &amp; Daniel Rohr, CFA

The Outlook for Copper Prices Is Worse than Most Think

Australia

Amcor Limited is an international integrated packaging company offering packaging and related services.  Amcor primarily produces a wide range of packaging products which include corrugated boxes, cartons, aluminum and steel cans, flexible plastic packaging, PET plastic bottles and jars, and multi-wall sacks.

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Amcor Limited (AMC AU)

AmpGFX - More Stable Oil and EUR to Underperform Commodity Currencies

More stability in oil prices, anticipated policy easing by the ECB, intensified efforts in China to control its currency, and a Fed that is keeping...

Greg Gibbs

Earnings Certainty Continues to Deliver Strong Returns

Evidente has updated the performance and ranking of its proprietary systematic model of earnings certainty or predictability and found that stocks...

Sam Ferraro

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

Buy Signal for the A$ Weakens as the Currency Remains Resilient in the Face of Commodity Headwinds

Global commodity prices have continued to slide in recent months, with the RBA Commodity Price index down another 5% in US dollar terms. ...

Sam Ferraro

The Outlook for Copper Prices Is Worse than Most Think

The outlook for copper prices is worse than most think. Battered copper mining stocks may now screen as cheap, but we see further...

Morningstar, Inc.

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