Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul>
<li>UK inflation was marginally stronger on the CPI and weaker on the PPI in Feb-19. Partially offsetting surprises lift my March forecast lightly before lowering it.</li>
<li>Airfares and household energy prices are still set to significantly raise inflation to April before the latter unwinds enough in October to fall below target again.</li>
<li>Annual updates to weightings extend trend changes in average rates and seasonality. The latter is likely to remain a source of surprise, while some market benchmarks might move almost 20bp further as they keep converging to reality.</li>
</ul>


UK inflation was marginally stronger on the CPI and weaker on the PPI in Feb-19. Partially offsetting surprises lift my March forecast lightly before lowering it.
Airfares and household energy prices are still set to significantly raise inflation to April before the latter unwinds enough in October to fall below target again.
Annual updates to weightings extend trend changes in average rates and seasonality. The latter is likely to remain a source of surprise, while some market benchmarks might move almost 20bp further as they keep converging to reality.


UK Inflation: Devilish Detail Extending Trends

<ul>
<li>The LFS unemployment rate fell to 3.9% on rapid wage growth of 222k. Unusually elevated participation is temporarily exaggerating strength, and its correction could cause a sharper slowdown in the data, irrespective of Brexit.</li>
<li>Wage growth also exceeded expectations owing to revisions. The increasingly tight labour market appears to have melted-up at the start of 2019.</li>
</ul>


The LFS unemployment rate fell to 3.9% on rapid wage growth of 222k. Unusually elevated participation is temporarily exaggerating strength, and its correction could cause a sharper slowdown in the data, irrespective of Brexit.
Wage growth also exceeded expectations owing to revisions. The increasingly tight labour market appears to have melted-up at the start of 2019.


FLASH: UK Labour Market Melt-Up into 2019

<ul>
<li>The UK parliament voted to reject leaving with no agreement, as widely expected. Shambolic management around that looks set to force ministerial resignation.</li>
<li>Parliament continues to indulgence itself in motions against leaving the EU without a deal, but that doesn't stop it being the default defined by current laws.</li>
<li>I still see the relative probabilities of a deal, no deal, and no Brexit at 45:35:20.</li>
</ul>


The UK parliament voted to reject leaving with no agreement, as widely expected. Shambolic management around that looks set to force ministerial resignation.
Parliament continues to indulgence itself in motions against leaving the EU without a deal, but that doesn't stop it being the default defined by current laws.
I still see the relative probabilities of a deal, no deal, and no Brexit at 45:35:20.


FLASH: UK Denying No Deal Does Not Reduce Risk

<ul>
<li>The Spring Statement revealed marginally more fiscal room and no significant policy changes, consistent with the Chancellor’s intent to downgrade the event.</li>
<li>Fiscal policy can respond to the Brexit outcome, despite total financing rising on a heavy redemption profile. Net liabilities look weirdly skewed away from gilts.</li>
<li>Recent complaints about the RPI are being considered with a response planned for April. Changes to its use are more likely than to the measure’s methodology.</li>
</ul>


The Spring Statement revealed marginally more fiscal room and no significant policy changes, consistent with the Chancellor’s intent to downgrade the event.
Fiscal policy can respond to the Brexit outcome, despite total financing rising on a heavy redemption profile. Net liabilities look weirdly skewed away from gilts.
Recent complaints about the RPI are being considered with a response planned for April. Changes to its use are more likely than to the measure’s methodology.


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

<ul>
<li>Brexit fear diminishing boosting GBP and other currencies</li>
<li>Eurozone IP rebounds, the first sign of stabilisation</li>
<li>Pressure increases for a rate cut in Australia</li>
</ul>We can see a case for GBP to rise towards 1.40 helping recoveries in EUR and AUD, and weakening the USD more broadly.  But the outlook for a more sustained period of low EUR rates, no structural underweight in EUR, and limited demand for Euro assets suggest that its upside may be limited.  Rate cut expectations have reached a new peak in Australia, and the AUD should continue to remain heavy.  Chinese economic reports (trade, credit, PMIs) have been weak, Jan/Feb activity data are due later today.  The overall outlook for the USD remains mixed and cautious trading continues to be advised. Event risk will keep traders playing the short game.


Brexit fear diminishing boosting GBP and other currencies
Eurozone IP rebounds, the first sign of stabilisation
Pressure increases for a rate cut in Australia
We can see a case for GBP to rise towards 1.40 helping recoveries in EUR and AUD, and weakening the USD more broadly.  But the outlook for a more sustained period of low EUR rates, no structural underweight in EUR, and limited demand for Euro assets suggest that its upside may be limited.  Rate cut expectations have reached a new peak in Australia, and the AUD should continue to remain heavy.  Chinese economic reports (trade, credit, PMIs) have been weak, Jan/Feb activity data are due later today.  The overall outlook for the USD remains mixed and cautious trading continues to be advised. Event risk will keep traders playing the short game.

Brexit Sucking up Oxygen from the FX Market

United Kingdom

The British Pound Sterling is the official currency of The United Kingdom. 

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UK Inflation: Devilish Detail Extending Trends

UK inflation was marginally stronger on the CPI and weaker on the PPI in Feb-19. Partially offsetting surprises lift my March forecast lightly...

Phil Rush

FLASH: UK Labour Market Melt-Up into 2019

The LFS unemployment rate fell to 3.9% on rapid wage growth of 222k. Unusually elevated participation is temporarily exaggerating strength, and...

Phil Rush

FLASH: UK Denying No Deal Does Not Reduce Risk

The UK parliament voted to reject leaving with no agreement, as widely expected. Shambolic management around that looks set to force ministerial...

Phil Rush

UK Fiscal: Waiting While Brexit Burns

The Spring Statement revealed marginally more fiscal room and no significant policy changes, consistent with the Chancellor’s intent to downgrade...

Phil Rush

Brexit Sucking up Oxygen from the FX Market

Brexit fear diminishing boosting GBP and other currencies Eurozone IP rebounds, the first sign of stabilisation Pressure increases for a rate cut...

Greg Gibbs

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