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

While the downgrades to the ECB outlook may not have been unexpected, they appear to have been viewed as the last straw for EUR bulls.  EUR has failed to respond to lower US rates in recent months or a moderate recovery in global risk appetite.  An expectation that ECB rates policy normalisation may take much longer may be encouraging the use of the EUR as a funding currency for ‘carry trades’.  The AUD is flirting with key support (0.70), and widespread expectation that the RBA will capitulate on its long-held reluctance to cut rates below 1.5% is weighing on the currency. Labour market data may hold the key.

While the downgrades to the ECB outlook may not have been unexpected, they appear to have been viewed as the last straw for EUR bulls.  EUR has failed to respond to lower US rates in recent months or a moderate recovery in global risk appetite.  An expectation that ECB rates policy normalisation may take much longer may be encouraging the use of the EUR as a funding currency for ‘carry trades’.  The AUD is flirting with key support (0.70), and widespread expectation that the RBA will capitulate on its long-held reluctance to cut rates below 1.5% is weighing on the currency. Labour market data may hold the key.

ECB Was the Last Straw, AUD’s Hold onto 70 Slipping

The surge in Chinese equities, leading a broader rebound in emerging market assets is significant and hard to ignore.  The AUD has significantly lagged the rebound in risk appetite indicators, including copper, other commodity and Asian currencies.  Fears over Australia’s housing market have dominated recent developments, but labour market indicators suggest the RBA will be in no hurry to cut rates.  US real yields have fallen significantly since their peak in November last year and may reflect recent evidence of weaker economic activity.  Prominent Fed members suggest the Fed may be moving to target average inflation, paving the way for lower US rates and a weaker USD outlook.

The surge in Chinese equities, leading a broader rebound in emerging market assets is significant and hard to ignore.  The AUD has significantly lagged the rebound in risk appetite indicators, including copper, other commodity and Asian currencies.  Fears over Australia’s housing market have dominated recent developments, but labour market indicators suggest the RBA will be in no hurry to cut rates.  US real yields have fallen significantly since their peak in November last year and may reflect recent evidence of weaker economic activity.  Prominent Fed members suggest the Fed may be moving to target average inflation, paving the way for lower US rates and a weaker USD outlook.

US Real Yields Fall, and the Fed Wants Higher Inflation

We have turned our attention to the EUR in recent days, watching it break a key support on Monday (falling through 1.1300).  Its performance has been undermined by surprisingly weak activity data, and uncertainty over the state of the Chinese economy and global trade growth.  However, the Eurozone had a run of bad luck in 2018; including the yellow vest protests, Italian political turmoil, auto sector disruption, weak close neighbour emerging markets, and a slump in export markets.  Heightened uncertainty over US-China trade relations, China economy fears, and Brexit has further dampened market sentiment. But on most fronts, the disruptions are diminishing and it is likely, in our view, that external demand will recover from its recent slump. We see upside potential for EUR in the coming months.

We have turned our attention to the EUR in recent days, watching it break a key support on Monday (falling through 1.1300).  Its performance has been undermined by surprisingly weak activity data, and uncertainty over the state of the Chinese economy and global trade growth.  However, the Eurozone had a run of bad luck in 2018; including the yellow vest protests, Italian political turmoil, auto sector disruption, weak close neighbour emerging markets, and a slump in export markets.  Heightened uncertainty over US-China trade relations, China economy fears, and Brexit has further dampened market sentiment. But on most fronts, the disruptions are diminishing and it is likely, in our view, that external demand will recover from its recent slump. We see upside potential for EUR in the coming months.

The Fed’s newfound sensitivity to global economic and financial market risks has boosted global asset markets and softened the USD.  These moves may be limited by the still substantial global uncertainty over US trade policy, surprisingly weak economic data in Europe and China, tensions surrounding US legal action against Huawei, tech sector headwinds, Brexit, and a more toxic US political environment.  However, we would not be surprised to see a period of weaker USD trading unfold, especially if the US administration and China see progress in trade talks this week.

The Fed’s newfound sensitivity to global economic and financial market risks has boosted global asset markets and softened the USD.  These moves may be limited by the still substantial global uncertainty over US trade policy, surprisingly weak economic data in Europe and China, tensions surrounding US legal action against Huawei, tech sector headwinds, Brexit, and a more toxic US political environment.  However, we would not be surprised to see a period of weaker USD trading unfold, especially if the US administration and China see progress in trade talks this week.

The market appears somewhat prepared for a dovish tilt in the ECB policy meeting on Thursday.  This may involve an acknowledgement of downside risks to their outlook.  It does not appear that the market expects any significant change in the key policy guidance on rates at this time, but it is possible that the ECB extends its expected period before a hike further to push rate hike expectations beyond this year.  The topic of TLTROs may come up in questioning.  The ECB may be mulling announcing a fresh series of TLTRO as soon as the March policy meeting.  This should be seen largely as extending the existing QE policy, but at first brush, the market could view such discussion as a further dovish tilt.

The market appears somewhat prepared for a dovish tilt in the ECB policy meeting on Thursday.  This may involve an acknowledgement of downside risks to their outlook.  It does not appear that the market expects any significant change in the key policy guidance on rates at this time, but it is possible that the ECB extends its expected period before a hike further to push rate hike expectations beyond this year.  The topic of TLTROs may come up in questioning.  The ECB may be mulling announcing a fresh series of TLTRO as soon as the March policy meeting.  This should be seen largely as extending the existing QE policy, but at first brush, the market could view such discussion as a further dovish tilt.

Germany

The euro is the official currency of the European Economic & Monetary Union. 

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Euro (USDEUR CURNCY)

ECB Was the Last Straw, AUD’s Hold onto 70 Slipping

While the downgrades to the ECB outlook may not have been unexpected, they appear to have been viewed as the last straw for EUR bulls. EUR has...

Greg Gibbs

US Real Yields Fall, and the Fed Wants Higher Inflation

The surge in Chinese equities, leading a broader rebound in emerging market assets is significant and hard to ignore. The AUD has significantly...

Greg Gibbs

Bearish Euro Sentiment Over-Done

We have turned our attention to the EUR in recent days, watching it break a key support on Monday (falling through 1.1300). Its performance has...

Greg Gibbs

Fed Completes Its Come-Down

The Fed’s newfound sensitivity to global economic and financial market risks has boosted global asset markets and softened the USD. These moves...

Greg Gibbs

ECB’s TLTROs Enter the Frame

The market appears somewhat prepared for a dovish tilt in the ECB policy meeting on Thursday. This may involve an acknowledgement of downside...

Greg Gibbs

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