Emerging Market Economist, Emerginomics

Tatiana Orlova

Emerging Market Economist

Emerginomics

Macroeconomics

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Earlier this month, the news that the US and China were nearing a limited trade deal returned optimism to the markets. At the annual IMF and World Bank meetings, hopes that the global economy was likely to avoid recession in 2020 were still running high. However, data on global manufacturing and investment remain gloomy. Turkey’s military operation in response to US President Trump’s decision to pull US troops from Syria roiled Turkey’s markets. Despite the removal of the US sanctions after Turkey and Russia reached an accord in Sochi, we think higher geopolitical risks should remain embedded in Turkish yields. All eyes now should be on the Trump-Xi meeting and the US decision on tariffs on EU auto imports due in November.
This week, the US Fed is holding a regular meeting; the markets are widely expecting another 25bp cut in the Fed funds rate. An insufficiently hawkish Fed statement or an unexpected decision to keep the policy on hold could dilute the markets' optimism and provoke a sell-off in high-yielding assets. Furthermore, they would likely draw more criticism from Trump and stoke up concerns that the Fed has become a hostage in the US-China trade confrontation.
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Earlier this month, the news that the US and China were nearing a limited trade deal returned optimism to the markets. At the annual IMF and World Bank meetings, hopes that the global economy was likely to avoid recession in 2020 were still running high. However, data on global manufacturing and investment remain gloomy. Turkey’s military operation in response to US President Trump’s decision to pull US troops from Syria roiled Turkey’s markets. Despite the removal of the US sanctions after Turkey and Russia reached an accord in Sochi, we think higher geopolitical risks should remain embedded in Turkish yields. All eyes now should be on the Trump-Xi meeting and the US decision on tariffs on EU auto imports due in November.
This week, the US Fed is holding a regular meeting; the markets are widely expecting another 25bp cut in the Fed funds rate. An insufficiently hawkish Fed statement or an unexpected decision to keep the policy on hold could dilute the markets' optimism and provoke a sell-off in high-yielding assets. Furthermore, they would likely draw more criticism from Trump and stoke up concerns that the Fed has become a hostage in the US-China trade confrontation.


Geopolitical Comment: While Markets Are Hoping for US-China Mini-Deal, Turkey Is Playing with Fire

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

We want to outline probable downside targets given increasing risk of a military response out of China once the HSI is back below 25,000 pivotal macro support. 25k base line support halted the decline in 2018 but trend indicators warn of a sustained move below 25,000 and may not hold secondary support at 24,000. Downside support and projection levels show a higher frequency of being met given weak seasonality into September/October and increasing HK demonstration tensions.Weekly MACD that demonstrates downside cyclicality that would threaten the 24,000 physical support (old price highs).USD/CNH triangulation is set to push higher with targets at 7.18 and 7.37.A hedge option in an event where the stock exchange were to be closed rests with shorting the US ETF (EWH) with projection at 20.30 and critical price support at 19.60.

We want to outline probable downside targets given increasing risk of a military response out of China once the HSI is back below 25,000 pivotal macro support. 25k base line support halted the decline in 2018 but trend indicators warn of a sustained move below 25,000 and may not hold secondary support at 24,000. Downside support and projection levels show a higher frequency of being met given weak seasonality into September/October and increasing HK demonstration tensions.Weekly MACD that demonstrates downside cyclicality that would threaten the 24,000 physical support (old price highs).USD/CNH triangulation is set to push higher with targets at 7.18 and 7.37.A hedge option in an event where the stock exchange were to be closed rests with shorting the US ETF (EWH) with projection at 20.30 and critical price support at 19.60.

In this webcast we update levels and momentum triggers in our base case bear scenario post Fed and below SPX 2,950. We started shorting weaker parts of Asia and Europe after the G20 ahead of an SPX cycle peak due in Late July. Our work called for shorting weaker US sectors and the NDX at 8,000 as core sector were due to resume the underperform cycle with tech the last leg of support to break lower.USD/CNH above 7 is a game changer for Asian equity risk and FX. Upside targets are meaningful with 7.04 dip support and a trailing stop below 7.0. We have been USD long from 6.82. Outflows from Asian equities will only exacerbate the decline in process. USD/JPY bear call is one of our higher conviction patterns as the weekly triangle breaks lower with targets at 102 and a reach for 99. This in turn is inflecting the Nikkei. Korea has been the downside leader and now seeing Taiwan and Singapore follow.Gold is resuming its ascend and will see support transition from lower yields to risk aversion.Weaker equity seasonality plays a role into a hard decline into September if not October.

In this webcast we update levels and momentum triggers in our base case bear scenario post Fed and below SPX 2,950. We started shorting weaker parts of Asia and Europe after the G20 ahead of an SPX cycle peak due in Late July. Our work called for shorting weaker US sectors and the NDX at 8,000 as core sector were due to resume the underperform cycle with tech the last leg of support to break lower.USD/CNH above 7 is a game changer for Asian equity risk and FX. Upside targets are meaningful with 7.04 dip support and a trailing stop below 7.0. We have been USD long from 6.82. Outflows from Asian equities will only exacerbate the decline in process. USD/JPY bear call is one of our higher conviction patterns as the weekly triangle breaks lower with targets at 102 and a reach for 99. This in turn is inflecting the Nikkei. Korea has been the downside leader and now seeing Taiwan and Singapore follow.Gold is resuming its ascend and will see support transition from lower yields to risk aversion.Weaker equity seasonality plays a role into a hard decline into September if not October.

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. We like the CAD on a USD bounce as the top commodity currency.Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge resistance the case of the Euro). Fresh Euro buy support lies near or just under 1.13.This webcast outlines what currencies in Asia we are trading a USD bounce and where to set intermediate short levels with a focus in the USD/SGD and USD/KRW near respective resistance points at 1.36 and 1,170.USD/THB is moving into a more strategic low and leading the USD bottom cycle in Asia with a focus on the 30.50 level. We closed our short from 32.00.EM FX short term lows are visible in a number of 5 wave counts that call for a dollar bounce and one that sets up a short in line with our DXY shift. We like the CAD on a USD bounce as the top commodity currency.Strategy points – Euro above 1.13 is bearish DXY (below 96.50). Weekly DXY cycle rolling over and calls for selling USD rallies. Sterling may have difficulty at 1.28. USD/JPY 109/108 pivotal for global risk (keep in mind the USD/JPY bearish formation is of a macro degree). US 10yr yield looks very oversold into weakness below 2% and may be a variable that helps the USD bounce near term. Our bet is for a bounce to 2.18% with scope to 2.30% (remain macro bearish yield to 1.62%).

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.

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus would generate a recovery in the global economy and the US economy was largely immune to a slowdown in activity abroad. However, the tariffs have been increased, trade talks have stalled, and the US has rolled out bans on Chinese tech companies.  The evidence grows that there is a structural rift in US-China trade relations. The rebound in Chinese economic activity in March was not backed up by data in other Asian exporter nations or Europe through April.  Chinese activity data slumped again in April, and the latest PMI data in the Eurozone, Japan and the USA for May are weak. Oil and copper prices have turned lower, suggesting that industrial activity remains weak.  We continue to see downside risk for still elevated US equities.  The strength in the USD to date is contributing to downward pressure on US equities.  The gains in the USD may have become over-extended.  China may pursue a more stable CNY for a period and lower US yields should support safe haven currencies, JPY, CHF and gold.

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus would generate a recovery in the global economy and the US economy was largely immune to a slowdown in activity abroad. However, the tariffs have been increased, trade talks have stalled, and the US has rolled out bans on Chinese tech companies.  The evidence grows that there is a structural rift in US-China trade relations. The rebound in Chinese economic activity in March was not backed up by data in other Asian exporter nations or Europe through April.  Chinese activity data slumped again in April, and the latest PMI data in the Eurozone, Japan and the USA for May are weak. Oil and copper prices have turned lower, suggesting that industrial activity remains weak.  We continue to see downside risk for still elevated US equities.  The strength in the USD to date is contributing to downward pressure on US equities.  The gains in the USD may have become over-extended.  China may pursue a more stable CNY for a period and lower US yields should support safe haven currencies, JPY, CHF and gold.

China

The Chinese renminbi (yuan) is the official currency of The People's Republic of China. 

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Geopolitical Comment: While Markets Are Hoping for US-China Mini-Deal, Turkey Is Playing with Fire

Earlier this month, the news that the US and China were nearing a limited trade deal returned optimism to the markets. At the annual IMF and World...

Tatiana Orlova

Hong Kong Event Downside Support/Target

We want to outline probable downside targets given increasing risk of a military response out of China once the HSI is back below 25,000 pivotal...

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Risk Ripples Below SPX 2950

In this webcast we update levels and momentum triggers in our base case bear scenario post Fed and below SPX 2,950. We started shorting weaker...

Thomas Schroeder

Where to Sell the USD Post Bounce

DXY weekly cycle is breaking down on the back of non confirmation in trending indicators and the break of rising wedge support (falling wedge...

Thomas Schroeder

The Global Recovery Narrative Crumbles

The US equity market was running with an optimistic assessment that there is a Trump and Fed put, that a trade deal and Chinese policy stimulus...

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