China Macroeconomics & Academia

Christopher Balding

FX & Rates

Over and over again we have commented on China’s FX market as a gauge for health of China’s markets. It is not just due to FX trading and rate shifts. It is also because it is easier to spot the PBOC gaming the system in the FX market. And we do believe that right now the PBOC is pushing the CNY away from what the value would be otherwise.

Over and over again we have commented on China’s FX market as a gauge for health of China’s markets. It is not just due to FX trading and rate shifts. It is also because it is easier to spot the PBOC gaming the system in the FX market. And we do believe that right now the PBOC is pushing the CNY away from what the value would be otherwise.

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


<ul>
<li>
Global Liquidity contracted at annualised rate of 8.2% last week</li>
<li>China's PBoC doubling-down on tightening by shrinking balance sheet at annualised minus 15.8%</li>
<li>
Bank of Japan same tightening message</li>
<li>Conclusion: this could be a bear market rally</li>
</ul>



Global Liquidity contracted at annualised rate of 8.2% last week
China's PBoC doubling-down on tightening by shrinking balance sheet at annualised minus 15.8%

Bank of Japan same tightening message
Conclusion: this could be a bear market rally


China Delivers A Chill Warning As World Central Banks Continue The Freeze

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 multipronged stimulus policy announcement in China appears significant and should help Chinese investor and economic confidence recover.  The market is probably braced for weaker Chinese December activity reports next week and should look forward with some increased confidence in Chinese equities.  This is likely to contribute to a firmer outlook for the EUR that has suffered from a slump in its industrial activity that appears to reflect weaker demand from China.  The AUD has been highly correlated with Chinese equities in the last year, and it may also respond positively to prospects for some recovery in China.  However, its upside may be hampered by the increasing concern over more rapidly falling house prices in Australia, weaker construction activity and fears that households may have slowed spending.  RBA rate cut expectations have increased and Australian rates have lagged the recent rebound in US rates.

The multipronged stimulus policy announcement in China appears significant and should help Chinese investor and economic confidence recover.  The market is probably braced for weaker Chinese December activity reports next week and should look forward with some increased confidence in Chinese equities.  This is likely to contribute to a firmer outlook for the EUR that has suffered from a slump in its industrial activity that appears to reflect weaker demand from China.  The AUD has been highly correlated with Chinese equities in the last year, and it may also respond positively to prospects for some recovery in China.  However, its upside may be hampered by the increasing concern over more rapidly falling house prices in Australia, weaker construction activity and fears that households may have slowed spending.  RBA rate cut expectations have increased and Australian rates have lagged the recent rebound in US rates.

Chinese Stimulus Vs. A Weak Australian Housing Market

Out-performance in the US economy, as was seen in 2018, seems much less likely in the year ahead.  Lower oil prices and slowing high tech sectors will dampen activity and assets in the US more than many other developed and EM countries.  The boost to equities and growth from US tax policy has passed its peak.  US politics is set to become increasingly partisan over the next two years of the Trump administration.  US trade policy has softened in the wake on the sharp fall in US equities in Q4.  Several EM countries have resolved their deep political distractions, and their economies have improved since mid-year.  We can see the USD reversing more of its gains in the last year as the global economic outlook stabilises and the Fed enters an extended pause in rates policy.

Out-performance in the US economy, as was seen in 2018, seems much less likely in the year ahead.  Lower oil prices and slowing high tech sectors will dampen activity and assets in the US more than many other developed and EM countries.  The boost to equities and growth from US tax policy has passed its peak.  US politics is set to become increasingly partisan over the next two years of the Trump administration.  US trade policy has softened in the wake on the sharp fall in US equities in Q4.  Several EM countries have resolved their deep political distractions, and their economies have improved since mid-year.  We can see the USD reversing more of its gains in the last year as the global economic outlook stabilises and the Fed enters an extended pause in rates policy.

USD Peaking with the Economic and Political Cycle

Chinese equities face a crossroad to start the year as the market mulls a more serious phase in the structural decline in China’s economy balanced against renewed efforts to stimulate growth in 2019.  The US-China trade dispute and broader US policy shift to contain China’s economic ambitions in high tech industries have contributed to fears of a Chinese led global economic downturn.  But these concerns may ease as China and the US progress through trade negotiations restarted amidst a truce on tariff policy through 1-March.  The AUD and copper prices have been highly correlated with Chinese equities over the last year, highlighting the broader market implications of trade talks this week and renewed Chinese efforts to restore economic confidence.

Chinese equities face a crossroad to start the year as the market mulls a more serious phase in the structural decline in China’s economy balanced against renewed efforts to stimulate growth in 2019.  The US-China trade dispute and broader US policy shift to contain China’s economic ambitions in high tech industries have contributed to fears of a Chinese led global economic downturn.  But these concerns may ease as China and the US progress through trade negotiations restarted amidst a truce on tariff policy through 1-March.  The AUD and copper prices have been highly correlated with Chinese equities over the last year, highlighting the broader market implications of trade talks this week and renewed Chinese efforts to restore economic confidence.

China

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

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CNY (USDCNY CURNCY)

PBOC and the CNY Job

Over and over again we have commented on China’s FX market as a gauge for health of China’s markets. It is not just due to FX trading and rate...

Christopher Balding

China Delivers A Chill Warning As World Central Banks Continue The Freeze

Global Liquidity contracted at annualised rate of 8.2% last week China's PBoC doubling-down on tightening by shrinking balance sheet at...

Michael J. Howell

Chinese Stimulus Vs. A Weak Australian Housing Market

The multipronged stimulus policy announcement in China appears significant and should help Chinese investor and economic confidence recover. The...

Greg Gibbs

USD Peaking with the Economic and Political Cycle

Out-performance in the US economy, as was seen in 2018, seems much less likely in the year ahead. Lower oil prices and slowing high tech sectors...

Greg Gibbs

Chinese Market Sentiment at a Crossroad

Chinese equities face a crossroad to start the year as the market mulls a more serious phase in the structural decline in China’s economy balanced...

Greg Gibbs

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)