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.

FX & Rates

<p><em>The US economy has retained strong momentum, generally beating expectations, while the Eurozone economy has lost momentum and has consistently underwhelmed expectations over recent months.  The ECB said it has been monitoring strength in the EUR since January.  The evidence suggests that indeed EUR strength has contributed to weaker growth and is a problem for the ECB.  The EUR has fallen after the last four ECB meetings, as Draghi emphasised patience and warned of risks. The same appears likely this week. It may seem distracting to consider relative economic trends and rate spreads when the USD has suffered a big picture slump in confidence, but the background noise may no longer be drowning out the economic action at the front of the stage.</em></p>

The US economy has retained strong momentum, generally beating expectations, while the Eurozone economy has lost momentum and has consistently underwhelmed expectations over recent months.  The ECB said it has been monitoring strength in the EUR since January.  The evidence suggests that indeed EUR strength has contributed to weaker growth and is a problem for the ECB.  The EUR has fallen after the last four ECB meetings, as Draghi emphasised patience and warned of risks. The same appears likely this week. It may seem distracting to consider relative economic trends and rate spreads when the USD has suffered a big picture slump in confidence, but the background noise may no longer be drowning out the economic action at the front of the stage.

<p><em>We see the recent resurgence in US yields as potentially the most important driver in the coming week or longer.  The resumption of the rise in US yields in the last week appears related to a more persistent underlying trend.  It has been supported by a rise in commodity prices, but occurred despite weaker confidence in global growth and equity markets, suggesting it may be a more pervasive trend likely to influence other markets, rather than be influenced by them. The USD reaction to higher US yields has hardly been straightforward in the last year, but it did strengthen broadly in-line with higher yields in the last week.  This may reflect troubles in the tech sector and broader geopolitical uncertainty undermining EM markets. EM equities and currencies have underperformed developed markets in the last month.  Some easing in trade tensions over the weekend may help stabilise EM currencies and global equities.  However, concerns over the tech sector are starting to run deeper and may prevent their recovery.  If US yields rise significantly further, they may also cap equities more broadly, and undermine EM currencies, especially high yielders more susceptible to US yields.  USD/JPY may initially benefit from higher US yields, but equity performance may limit gains.  EUR has been able to shake off a more significant slowdown in Eurozone economy momentum to date, underpinned by capital flows from SEK, CHF and RUB, but these have likely peaked.</em></p>

We see the recent resurgence in US yields as potentially the most important driver in the coming week or longer.  The resumption of the rise in US yields in the last week appears related to a more persistent underlying trend.  It has been supported by a rise in commodity prices, but occurred despite weaker confidence in global growth and equity markets, suggesting it may be a more pervasive trend likely to influence other markets, rather than be influenced by them. The USD reaction to higher US yields has hardly been straightforward in the last year, but it did strengthen broadly in-line with higher yields in the last week.  This may reflect troubles in the tech sector and broader geopolitical uncertainty undermining EM markets. EM equities and currencies have underperformed developed markets in the last month.  Some easing in trade tensions over the weekend may help stabilise EM currencies and global equities.  However, concerns over the tech sector are starting to run deeper and may prevent their recovery.  If US yields rise significantly further, they may also cap equities more broadly, and undermine EM currencies, especially high yielders more susceptible to US yields.  USD/JPY may initially benefit from higher US yields, but equity performance may limit gains.  EUR has been able to shake off a more significant slowdown in Eurozone economy momentum to date, underpinned by capital flows from SEK, CHF and RUB, but these have likely peaked.

A Pervasive Rise in Yields May Propel Further USD Gains

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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

<figure class="editor-figure mceNonEditable"><img class="editor-image img-responsive" src="https://static-prod.smartkarma.com/images/media/000/049/770/original/CP%20header.jpg?1523938797" data-smartkarma-image-id="49770"></figure><p>We have made a case that EM FX is kicking off a cycle that will lead a USD key low in Asia stemming largely from the leading cycle in the TRY breakout and the secondary trigger breakout in BRL. We are seeing more signs of a reluctance for the USD trade low in in Asian FX and are gradually increasing USD long exposure which will play a role in the next equity decline in Asia.</p><p><strong>EM FX leading </strong></p><div style="text-align: left;">To view click on this link: <strong><a href="https://www.screencast.com/t/lfUq75NsE" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://www.screencast.com/t/lfUq75NsE&amp;source=gmail&amp;ust=1524024619361000&amp;usg=AFQjCNGlIcjXS-97LJt3X7JzCjDcjpZQxw">https://www.screencast.com/t/lfUq75NsE</a>  </strong>15:11 min.</div><div style="text-align: left;">
<figure class="editor-figure mceNonEditable"><img class="editor-image img-responsive" src="https://static-prod.smartkarma.com/images/media/000/049/772/original/CPG%20INSERT.png?1523938838" data-smartkarma-image-id="49772"></figure><div class="content-caption">FX webcast</div>
<p><strong>DXY </strong>– DXY 89 is the…</p>
</div>

We have made a case that EM FX is kicking off a cycle that will lead a USD key low in Asia stemming largely from the leading cycle in the TRY breakout and the secondary trigger breakout in BRL. We are seeing more signs of a reluctance for the USD trade low in in Asian FX and are gradually increasing USD long exposure which will play a role in the next equity decline in Asia.EM FX leading To view click on this link: https://www.screencast.com/t/lfUq75NsE  15:11 min.
FX webcast
DXY – DXY 89 is the…


EM FX Leading a Broader USD Cycle Low in Asia

<p><em>What does the widening in USD and AUD LIBOR/OIS spreads and higher cross-currency swap basis mean for their exchange rates?  Some have argued that the implied tightening in financial conditions in their home countries may delay central bank rate hikes and undermine their exchange rates.  But this seems to ignore the fact that the spread widening has placed direct upward pressure on the effective carry from holding long positions in the USD and the AUD against other currencies.  We look specifically at the carry for 3mth and 2yr terms for the EUR/USD and AUD/USD.  Overall, FX markets remain difficult to call, and patience is required as the market grapples with tariffs, political uncertainty, and volatile equity markets. </em></p>

What does the widening in USD and AUD LIBOR/OIS spreads and higher cross-currency swap basis mean for their exchange rates?  Some have argued that the implied tightening in financial conditions in their home countries may delay central bank rate hikes and undermine their exchange rates.  But this seems to ignore the fact that the spread widening has placed direct upward pressure on the effective carry from holding long positions in the USD and the AUD against other currencies.  We look specifically at the carry for 3mth and 2yr terms for the EUR/USD and AUD/USD.  Overall, FX markets remain difficult to call, and patience is required as the market grapples with tariffs, political uncertainty, and volatile equity markets. 

<p><em>In the next week or so, key US inflation data are released; wages data on Friday (6 Apr), PPI on the following Tuesday (10 Apr), and CPI on the following Wednesday (11 Apr).   FOMC minutes are also released on 11 April.  These data have sent mixed messages so far this year and contributed to the rise in bond yields and equity market upheaval in February. Temporary factors start to wash out of the CPI data, PPI is rising faster on a weaker USD and firmer commodity prices.  Tariff fears boosted the ISM prices data.  A tightening labor market may show up in wages, and the FOMC was more hawkish than widely perceived by a distracted market.</em></p>

In the next week or so, key US inflation data are released; wages data on Friday (6 Apr), PPI on the following Tuesday (10 Apr), and CPI on the following Wednesday (11 Apr).   FOMC minutes are also released on 11 April.  These data have sent mixed messages so far this year and contributed to the rise in bond yields and equity market upheaval in February. Temporary factors start to wash out of the CPI data, PPI is rising faster on a weaker USD and firmer commodity prices.  Tariff fears boosted the ISM prices data.  A tightening labor market may show up in wages, and the FOMC was more hawkish than widely perceived by a distracted market.

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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EURO/US DOLLAR (EURUSD CURNCY)

Time for a EUR Reality Check

The US economy has retained strong momentum, generally beating expectations, while the Eurozone economy has lost momentum and has consistently...

Greg Gibbs

A Pervasive Rise in Yields May Propel Further USD Gains

We see the recent resurgence in US yields as potentially the most important driver in the coming week or longer. The resumption of the rise in US...

Greg Gibbs

EM FX Leading a Broader USD Cycle Low in Asia

We have made a case that EM FX is kicking off a cycle that will lead a USD key low in Asia stemming largely from the leading cycle in the TRY...

Thomas Schroeder

Spreads, Basis, and the USD and AUD

What does the widening in USD and AUD LIBOR/OIS spreads and higher cross-currency swap basis mean for their exchange rates? Some have argued that...

Greg Gibbs

What Next for US Inflation?

In the next week or so, key US inflation data are released; wages data on Friday (6 Apr), PPI on the following Tuesday (10 Apr), and CPI on the...

Greg Gibbs

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