Economist

Richard Iley

Macroeconomics

<div class="content-highlight">The advance estimate of Q3 GDP confirms that the US economy continues to enjoy robust, above-trend, non-inflationary GDP growth, which is unprecedented, even extraordinary, given the relative maturity of the economic cycle.  Below are 10 'nuggets' from the Q3 report that should cover all you need to know about this key data release. </div>Here are 10 key take-aways from the <a href="https://www.bea.gov/newsreleases/national/gdp/2017/pdf/gdp3q17_adv.pdf" target="_blank">BEA's advance estimate of US Q3 GDP</a>: 1) At 3% SAAR, the advance estimate was stronger than expected. Consensus estimates had…

The advance estimate of Q3 GDP confirms that the US economy continues to enjoy robust, above-trend, non-inflationary GDP growth, which is unprecedented, even extraordinary, given the relative maturity of the economic cycle.  Below are 10 'nuggets' from the Q3 report that should cover all you need to know about this key data release. Here are 10 key take-aways from the BEA's advance estimate of US Q3 GDP: 1) At 3% SAAR, the advance estimate was stronger than expected. Consensus estimates had…

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

Canadian house price growth has cooled abruptly in recent months from rapid growth in the first half of the year.  After broad-based economic strength in the first half of the year, recent Canadian economic reports have been mixed.  A reversal of fortunes in the housing market may contain consumer confidence and activity.  In late-September, BoC Governor Poloz said that the Bank would be more data dependent in assessing future rate hikes after two back-to-back hikes in Jul/Sep this year. The risk is shifting to a more prolonged period before Canadian rates are raised further.  NAFTA uncertainty also poses a risk for the Canadian economy.  US PPI was stronger than expected and may reflect the impact of a weaker USD this year (CPI due tomorrow).  The Fed minutes were seen as dovish, revealing FOMC concerns over low inflation.  However, upside risk for US yields may arise from the impact of Hurricane recovery on growth, wages and inflation into year end.  The Fed and the US rates market do not appear to have built-in much risk that tax reform will be enacted next year.  Warsh would seem the best fit for Fed Governor and this prospect may boost US yields.

Canadian house price growth has cooled abruptly in recent months from rapid growth in the first half of the year.  After broad-based economic strength in the first half of the year, recent Canadian economic reports have been mixed.  A reversal of fortunes in the housing market may contain consumer confidence and activity.  In late-September, BoC Governor Poloz said that the Bank would be more data dependent in assessing future rate hikes after two back-to-back hikes in Jul/Sep this year. The risk is shifting to a more prolonged period before Canadian rates are raised further.  NAFTA uncertainty also poses a risk for the Canadian economy.  US PPI was stronger than expected and may reflect the impact of a weaker USD this year (CPI due tomorrow).  The Fed minutes were seen as dovish, revealing FOMC concerns over low inflation.  However, upside risk for US yields may arise from the impact of Hurricane recovery on growth, wages and inflation into year end.  The Fed and the US rates market do not appear to have built-in much risk that tax reform will be enacted next year.  Warsh would seem the best fit for Fed Governor and this prospect may boost US yields.

CAD Facing Risks from a Weaker Housing Market and NAFTA

Not a big response in US rates and yields to the FOMC minutes, although the USD appeared to weaken somewhat.The FOMC minutes continue to reveal a broad church with some forecasting fewer hikes, concerned by low inflation and wages growth, fearing that this is spilling into lower inflation expectations.  Others have more confidence that the tightening labor market is starting to generate higher wage growth, and concerned that financial stability risks may build if rates are not raised at least…

Not a big response in US rates and yields to the FOMC minutes, although the USD appeared to weaken somewhat.The FOMC minutes continue to reveal a broad church with some forecasting fewer hikes, concerned by low inflation and wages growth, fearing that this is spilling into lower inflation expectations.  Others have more confidence that the tightening labor market is starting to generate higher wage growth, and concerned that financial stability risks may build if rates are not raised at least…

FOMC Minutes – Low Inflation Vs. Financial Stability

After a tepid start to the week on Monday, where US bond markets were closed for Colombus Day, the USD has fallen significantly on Tuesday.  Asian currencies led the fall, enthusiastically followed by developed market currencies, including EUR and GBP.  Political uncertainty continues to undermine the USD.  Trump’s battles with Senator Corker, the NFL, North Korea, Iran, the media, and Democrats over ‘Dreamers’ creates a sense of chaos that dampens prospects for tax reform.  Global economic recovery continues to support global equity markets, and investors are more willing to take EM currency exposure to avoid elevated political risk in the USA.  EM currencies have lagged a rebound in EM equities in the last two weeks and started to play catch-up on Tuesday.  Strong German factory orders, industrial production, and exports support the EUR.  Sentix Eurozone investor confidence also rose to a new high and Spanish separatist threats have eased.  A global economic recovery is dragging the UK along for the ride, increasing the likelihood of BoE rate hikes. UK political risk may now ease from elevated levels.

After a tepid start to the week on Monday, where US bond markets were closed for Colombus Day, the USD has fallen significantly on Tuesday.  Asian currencies led the fall, enthusiastically followed by developed market currencies, including EUR and GBP.  Political uncertainty continues to undermine the USD.  Trump’s battles with Senator Corker, the NFL, North Korea, Iran, the media, and Democrats over ‘Dreamers’ creates a sense of chaos that dampens prospects for tax reform.  Global economic recovery continues to support global equity markets, and investors are more willing to take EM currency exposure to avoid elevated political risk in the USA.  EM currencies have lagged a rebound in EM equities in the last two weeks and started to play catch-up on Tuesday.  Strong German factory orders, industrial production, and exports support the EUR.  Sentix Eurozone investor confidence also rose to a new high and Spanish separatist threats have eased.  A global economic recovery is dragging the UK along for the ride, increasing the likelihood of BoE rate hikes. UK political risk may now ease from elevated levels.

Trump's 'reality Show' Hurts the Dollar, Euro and UK Look Perky

Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month.  It seems the market is sceptical that the recent rise in the USD will last, and has been in a ‘sell-the-rally’ frame of mind.  However, the rise in the USD has been consistent with a higher short and long-term yield advantage.  US economic reports, including the labor data on Friday, support the notion that the USD can rise further.  The USD has rallied in part due to a rejuvenated push for tax reform.  However, it appears that the market retains a significant risk premium (discounting the USD) to account for US political uncertainty.

Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month.  It seems the market is sceptical that the recent rise in the USD will last, and has been in a ‘sell-the-rally’ frame of mind.  However, the rise in the USD has been consistent with a higher short and long-term yield advantage.  US economic reports, including the labor data on Friday, support the notion that the USD can rise further.  The USD has rallied in part due to a rejuvenated push for tax reform.  However, it appears that the market retains a significant risk premium (discounting the USD) to account for US political uncertainty.

Skeptical Market Is Very Short US Dollars

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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US: More GDP Nuggets

The advance estimate of Q3 GDP confirms that the US economy continues to enjoy robust, above-trend, non-inflationary GDP growth, which is...

Richard Iley

CAD Facing Risks from a Weaker Housing Market and NAFTA

Canadian house price growth has cooled abruptly in recent months from rapid growth in the first half of the year. After broad-based economic...

Greg Gibbs

FOMC Minutes – Low Inflation Vs. Financial Stability

Not a big response in US rates and yields to the FOMC minutes, although the USD appeared to weaken somewhat.The FOMC minutes continue to reveal a...

Greg Gibbs

Trump's 'reality Show' Hurts the Dollar, Euro and UK Look Perky

After a tepid start to the week on Monday, where US bond markets were closed for Colombus Day, the USD has fallen significantly on Tuesday. Asian...

Greg Gibbs

Skeptical Market Is Very Short US Dollars

Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month. It...

Greg Gibbs

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