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.


FX & Rates

Things are changing fast. Singapore’s Lee Kwan Yew wisely observed that China is not just the largest economy in the World: it is the largest economy the World has ever seen! Expect big things. Our view is that the Chinese Yuan is en route to being the major challenger to the US dollar as an international means of payment. This will take time, but every journey has its first steps and China is already stepping out. Such long-term trends often show up early in financial markets and frequently in…

Things are changing fast. Singapore’s Lee Kwan Yew wisely observed that China is not just the largest economy in the World: it is the largest economy the World has ever seen! Expect big things. Our view is that the Chinese Yuan is en route to being the major challenger to the US dollar as an international means of payment. This will take time, but every journey has its first steps and China is already stepping out. Such long-term trends often show up early in financial markets and frequently in…

The Two Charts That Every Asian Investor Should Know About

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.

In recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets.  Several higher-yielding EM currencies have fallen more sharply; including ARS, TRL, IDR and INR.  There appears to be some momentum behind the recent capital flight from EM that may not quickly reverse.  US bond yields have stabilised near recent highs in the last week, but most other major market yields have retreated, further increasing the USD yield advantage to new highs.  Our report today concentrates on the EUR.  Economic surprise indices for the Eurozone have sunk to new extreme lows and maybe forcing a shake-down in the market’s stubbornly optimistic outlook for the region. EUR has hit a new low for the year, but it is too early to presume it will stabilise.

In recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets.  Several higher-yielding EM currencies have fallen more sharply; including ARS, TRL, IDR and INR.  There appears to be some momentum behind the recent capital flight from EM that may not quickly reverse.  US bond yields have stabilised near recent highs in the last week, but most other major market yields have retreated, further increasing the USD yield advantage to new highs.  Our report today concentrates on the EUR.  Economic surprise indices for the Eurozone have sunk to new extreme lows and maybe forcing a shake-down in the market’s stubbornly optimistic outlook for the region. EUR has hit a new low for the year, but it is too early to presume it will stabilise.

EUR Hits a New Low for 2018, Emerging Markets Under-Perform

Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

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.

Cross Asset Strategy

By confronting Beijing over the US deficit in bilateral trade, President Trump has opened a Pandora’s Box of grievances concerning the broader aspects of the US/China relationship which have been mainly suppressed since the GFC.It’s not clear if President Trump had intended to challenge the whole basis of the US/China relationship or whether he was just looking for a big win on specific trade-related issues before the midterm elections in early November, but the broader Washington policymaking establishment is now pushing an agenda for China to reverse the authoritarian shift in political and economic policies which has been evident since the GFC.The rising tensions between the two global superpowers are an additional headwind for emerging equities, which are starting to underperform their developed peers due to the rising dollar and crowded long positions in EM debt and equity.  Dedicated EM or NJA investors should switch from the more cyclical markets such as Taiwan and Korea, towards those markets in South East Asia, which have come under the most intense pressure from rising US bond yields, namely Indonesia and the Philippines.Further out, the most vulnerable market to the US/China dispute(s) should be China itself, which has been designated as a safe haven by many big investors, a stance which will be undermined if the rising dollar and increasing pressure from Washington, are catalysts for renewed capital outflows. A strong dollar will also limit Beijing’s ability to provide a renewed stimulus, as the reflation which has relieved the pressure on the most heavily indebted industrial sectors, subsides.

By confronting Beijing over the US deficit in bilateral trade, President Trump has opened a Pandora’s Box of grievances concerning the broader aspects of the US/China relationship which have been mainly suppressed since the GFC.It’s not clear if President Trump had intended to challenge the whole basis of the US/China relationship or whether he was just looking for a big win on specific trade-related issues before the midterm elections in early November, but the broader Washington policymaking establishment is now pushing an agenda for China to reverse the authoritarian shift in political and economic policies which has been evident since the GFC.The rising tensions between the two global superpowers are an additional headwind for emerging equities, which are starting to underperform their developed peers due to the rising dollar and crowded long positions in EM debt and equity.  Dedicated EM or NJA investors should switch from the more cyclical markets such as Taiwan and Korea, towards those markets in South East Asia, which have come under the most intense pressure from rising US bond yields, namely Indonesia and the Philippines.Further out, the most vulnerable market to the US/China dispute(s) should be China itself, which has been designated as a safe haven by many big investors, a stance which will be undermined if the rising dollar and increasing pressure from Washington, are catalysts for renewed capital outflows. A strong dollar will also limit Beijing’s ability to provide a renewed stimulus, as the reflation which has relieved the pressure on the most heavily indebted industrial sectors, subsides. 

The US/China Relationship: Investors Complacent Despite Irreconcilable Differences

It is easy to be cynical about newfound USD bullish sentiment, where suddenly yields and rates matter for currencies.  However, rates and yields have more often played a dominant role in currency markets.  Now that the equity market has become more volatile and confidence in the global economy has ebbed, we may see the USD continue to reconnect to its interest rate and yield differentials.  In more automated and index driven markets, we may see a surprisingly rapid rebound in the USD with limited retracement. Political uncertainty has weighed on the USD over the last year, but Trump has gained traction with tax reform, trade policy, progress in Korea, and can claim credit for stronger economic momentum.  A more assertive policy towards Syria and Iran may help improve Trump’s approval at home while increasing geopolitical uncertainty.  It is too early for the market to be fretting about twin deficits.  It needs to wait until there is a clearer picture of how Trump’s policies influence potential output, and the peak in US rates and yields are in sight.  AUD/USD has broken key support and maybe reconnecting to its now negative yield spread across its entire yield curve.  It faces headwinds from protectionist trade policies, tightening Chinese financial sector oversight, a weaker housing market, rising bank funding costs, pressure on its financial sector from a Royal Commission into its misconduct, and political uncertainty.

It is easy to be cynical about newfound USD bullish sentiment, where suddenly yields and rates matter for currencies.  However, rates and yields have more often played a dominant role in currency markets.  Now that the equity market has become more volatile and confidence in the global economy has ebbed, we may see the USD continue to reconnect to its interest rate and yield differentials.  In more automated and index driven markets, we may see a surprisingly rapid rebound in the USD with limited retracement. Political uncertainty has weighed on the USD over the last year, but Trump has gained traction with tax reform, trade policy, progress in Korea, and can claim credit for stronger economic momentum.  A more assertive policy towards Syria and Iran may help improve Trump’s approval at home while increasing geopolitical uncertainty.  It is too early for the market to be fretting about twin deficits.  It needs to wait until there is a clearer picture of how Trump’s policies influence potential output, and the peak in US rates and yields are in sight.  AUD/USD has broken key support and maybe reconnecting to its now negative yield spread across its entire yield curve.  It faces headwinds from protectionist trade policies, tightening Chinese financial sector oversight, a weaker housing market, rising bank funding costs, pressure on its financial sector from a Royal Commission into its misconduct, and political uncertainty.

Regime Change for the USD; AUD Breaks Down

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

This month we are turning bullish on the Dollar.  The main conclusions are:<ul><li>The Dollar Index had achieved almost all we expected of it on the downside last month, but there was still conflict in the signals. It had produced the minimum pattern needed to end the 5-wave decline from the 2017 high, its initial rally and correction off the Q1 low both had bullish shapes.  Since then a base-like pattern below 91.00 has begun to break upwards, targeting 93.70 minimum.  In practice, that means a retest…</li></ul>

This month we are turning bullish on the Dollar.  The main conclusions are:The Dollar Index had achieved almost all we expected of it on the downside last month, but there was still conflict in the signals. It had produced the minimum pattern needed to end the 5-wave decline from the 2017 high, its initial rally and correction off the Q1 low both had bullish shapes.  Since then a base-like pattern below 91.00 has begun to break upwards, targeting 93.70 minimum.  In practice, that means a retest…

United States

The euro is the official currency of the European Economic & Monetary Union.  The US dollar is the official currency of the United States of America.

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The Two Charts That Every Asian Investor Should Know About

Things are changing fast. Singapore’s Lee Kwan Yew wisely observed that China is not just the largest economy in the World: it is the largest...

Michael J. Howell

EUR Hits a New Low for 2018, Emerging Markets Under-Perform

In recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets. Several...

Greg Gibbs

The US/China Relationship: Investors Complacent Despite Irreconcilable Differences

By confronting Beijing over the US deficit in bilateral trade, President Trump has opened a Pandora’s Box of grievances concerning the broader...

John-Paul Smith

Regime Change for the USD; AUD Breaks Down

It is easy to be cynical about newfound USD bullish sentiment, where suddenly yields and rates matter for currencies. However, rates and yields...

Greg Gibbs

US Dollar: Monthly Currency Focus

This month we are turning bullish on the Dollar. The main conclusions are: The Dollar Index had achieved almost all we expected of it on the...

Peter Beuttell

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