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

Brexit fear is now close to being fully priced into the GBP, in our view.  The most recent slide in October tends to reflect the hard Brexit risk.  GBP is likely to remain weak for some time, but it may have seen its low in the flash crash last week.  Global bond yields continue their creep up despite dovish comments by the ECB and BoJ since Friday. We can see further rises in global yields unwinding from an extreme low that evolved on expectations of more QE, deeper negative rates, and extreme dis-inflationary expectation.  The market has been distracted from the evidence of modest improvement in the global economy and a rising trend in commodity prices this year by Brexit, banking sector woes in Europe and Japan and more bearish long-term forecasts by the Fed since mid-year. Fiscal impetus has turned positive and inflation expectations are now firming, supported by higher commodity prices.  As yields rise they will tend to reinforce an improvement in global economic confidence and unwind excessive pessimism on inflation.  Higher yields have negative implications for both ends of the risk spectrum, they will tend to weaken extreme low yielders (JPY, EUR, and gold) and also weaken the high yielders, like NZD.

Brexit fear is now close to being fully priced into the GBP, in our view.  The most recent slide in October tends to reflect the hard Brexit risk.  GBP is likely to remain weak for some time, but it may have seen its low in the flash crash last week.  Global bond yields continue their creep up despite dovish comments by the ECB and BoJ since Friday. We can see further rises in global yields unwinding from an extreme low that evolved on expectations of more QE, deeper negative rates, and extreme dis-inflationary expectation.  The market has been distracted from the evidence of modest improvement in the global economy and a rising trend in commodity prices this year by Brexit, banking sector woes in Europe and Japan and more bearish long-term forecasts by the Fed since mid-year. Fiscal impetus has turned positive and inflation expectations are now firming, supported by higher commodity prices.  As yields rise they will tend to reinforce an improvement in global economic confidence and unwind excessive pessimism on inflation.  Higher yields have negative implications for both ends of the risk spectrum, they will tend to weaken extreme low yielders (JPY, EUR, and gold) and also weaken the high yielders, like NZD.

Brexit Impact Over, Yields Rising, Currencies at Both Ends of Risk Spectrum Fall

GBP has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of significant UK fiscal stimulus.  The outlook remains negative, but it is risky to jump on the selling bandwagon.  Bond yields may have resumed a fledgling rising trend, supported by the BoJ’s ‘Yield Curve Control’ and notions of ECB tapering that stem from the same concern that flat yield curves are bad for the financial sector and may be counter-productive. Higher yields are also supported by increasing expectations of more fiscal stimulus and firming commodity prices related to modest improvement in global economic activity.  Yields may be rebounding from extraordinary lows generated by fear of a shortage of bonds to feed QE programs, and depressed views on inflation and secular stagnation.  Gold has broken key support, weighed down by rising bond yields and firming confidence in global growth.  JPY has also broken a year-long downtrend and combined with weaker trends in gold and GBP is spilling over to broader gains in the USD, even though US economic data has been mixed. Vague ECB taper talk has added uncertainty.  It may tend to reinforce a rise in yields, but threatens to turn what was a constructive market to one that is more risk-averse.

GBP has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of significant UK fiscal stimulus.  The outlook remains negative, but it is risky to jump on the selling bandwagon.  Bond yields may have resumed a fledgling rising trend, supported by the BoJ’s ‘Yield Curve Control’ and notions of ECB tapering that stem from the same concern that flat yield curves are bad for the financial sector and may be counter-productive. Higher yields are also supported by increasing expectations of more fiscal stimulus and firming commodity prices related to modest improvement in global economic activity.  Yields may be rebounding from extraordinary lows generated by fear of a shortage of bonds to feed QE programs, and depressed views on inflation and secular stagnation.  Gold has broken key support, weighed down by rising bond yields and firming confidence in global growth.  JPY has also broken a year-long downtrend and combined with weaker trends in gold and GBP is spilling over to broader gains in the USD, even though US economic data has been mixed. Vague ECB taper talk has added uncertainty.  It may tend to reinforce a rise in yields, but threatens to turn what was a constructive market to one that is more risk-averse.

AmpGFX - Knock-Ons from Rising Bond Yields

Currency markets have been mixed, choppy and in most cases exhibiting no trend over recent months. There are few clear opportunities and a number of risks to consider.  Two key data points this week in the USA include PCE inflation and durable goods orders. The Fed has forecast a subdued outlook for inflation, but it is not far below target, and the CPI measure is trending higher and above target.  Capital investment has been weak, but there has been a lift-off in orders in the two months to July, it will be important to see if this can build further.  However, recent broad activity indicators have been weak.  The forecast for a more gradual and shallow hiking path by the Fed helped lift some EM and commodity currencies last week. The BoJ policy meeting also contributed to a drop in long term yields back into their previous range, contributing to a rebound in equities and gold.  EM bonds and equities led the rebound in riskier assets and may continue to attract demand unless the low global rates view at the Fed is questioned.  Brexit and banking sector concerns may weigh on the GBP and EUR.  CAD looks a bit expensive relative to rates and oil prices.  A number of key events this week may set the tone for CAD; including a speech by Poloz, USA presidential debate, OPEC talks, and GDP data.

Currency markets have been mixed, choppy and in most cases exhibiting no trend over recent months. There are few clear opportunities and a number of risks to consider.  Two key data points this week in the USA include PCE inflation and durable goods orders. The Fed has forecast a subdued outlook for inflation, but it is not far below target, and the CPI measure is trending higher and above target.  Capital investment has been weak, but there has been a lift-off in orders in the two months to July, it will be important to see if this can build further.  However, recent broad activity indicators have been weak.  The forecast for a more gradual and shallow hiking path by the Fed helped lift some EM and commodity currencies last week. The BoJ policy meeting also contributed to a drop in long term yields back into their previous range, contributing to a rebound in equities and gold.  EM bonds and equities led the rebound in riskier assets and may continue to attract demand unless the low global rates view at the Fed is questioned.  Brexit and banking sector concerns may weigh on the GBP and EUR.  CAD looks a bit expensive relative to rates and oil prices.  A number of key events this week may set the tone for CAD; including a speech by Poloz, USA presidential debate, OPEC talks, and GDP data.

AmpGFX - Tough Currency Markets Await Key Events

USA rate hikes are again slipping out of view.  The ISM reports and broad labor market indicators suggest that economic momentum is slipping below potential.  A hike in September would appear to be a rash mistake and the risk is swinging towards no hike this year.  But just as the USA economy may be stalling, the economic and inflation outlook in the Eurozone, UK and Japan also appears to be weakening.  In contrast, several emerging market economies are picking up momentum, led by India, China and Russia.  Even though overall growth momentum remains modest and inflation trends are weakening in emerging markets, low yields and non-conventional policy easing in all major economies is set to perpetuate a recovery in emerging and commodity currencies.  A weak USD has been a feature of the markets this year, but the tide may be turning towards a relatively weak EUR and JPY.  Eurozone inflation indicators are weakening faster than other major countries and Eurozone rates and yields have fallen to the bottom of the pile below those in Japan.  The ECB should sound dovish this week and are expected to extend their current quantitative policy easing program beyond March.  We see a case for EUR and JPY to languish, if not clearly against the USD, then against emerging markets, commodity currencies and gold.

USA rate hikes are again slipping out of view.  The ISM reports and broad labor market indicators suggest that economic momentum is slipping below potential.  A hike in September would appear to be a rash mistake and the risk is swinging towards no hike this year.  But just as the USA economy may be stalling, the economic and inflation outlook in the Eurozone, UK and Japan also appears to be weakening.  In contrast, several emerging market economies are picking up momentum, led by India, China and Russia.  Even though overall growth momentum remains modest and inflation trends are weakening in emerging markets, low yields and non-conventional policy easing in all major economies is set to perpetuate a recovery in emerging and commodity currencies.  A weak USD has been a feature of the markets this year, but the tide may be turning towards a relatively weak EUR and JPY.  Eurozone inflation indicators are weakening faster than other major countries and Eurozone rates and yields have fallen to the bottom of the pile below those in Japan.  The ECB should sound dovish this week and are expected to extend their current quantitative policy easing program beyond March.  We see a case for EUR and JPY to languish, if not clearly against the USD, then against emerging markets, commodity currencies and gold.

AmpGFX - Emerging Economies Take Lead over Languishing Majors

Asymmetric Payoffs, Thracian Capital Management

Asymmetric Payoffs

Thracian Capital Management

I believe the selloff in GBPUSD has been an overreaction in the short term. Implied volatility is back to affordable levels, making betting on GBP upside an attractive trade. Brexit may take longer than expected and its effects may not be as negative.

I believe the selloff in GBPUSD has been an overreaction in the short term. Implied volatility is back to affordable levels, making betting on GBP upside an attractive trade. Brexit may take longer than expected and its effects may not be as negative.

Long BPA Currency (GBP/USD Future) Jun '17 140-Strike Calls at $1.30

United Kingdom

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

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GBP (GBPUSD CURNCY)

Brexit Impact Over, Yields Rising, Currencies at Both Ends of Risk Spectrum Fall

Brexit fear is now close to being fully priced into the GBP, in our view. The most recent slide in October tends to reflect the hard Brexit risk. ...

Greg Gibbs

AmpGFX - Knock-Ons from Rising Bond Yields

GBP has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of...

Greg Gibbs

AmpGFX - Tough Currency Markets Await Key Events

Currency markets have been mixed, choppy and in most cases exhibiting no trend over recent months. There are few clear opportunities and a number...

Greg Gibbs

AmpGFX - Emerging Economies Take Lead over Languishing Majors

USA rate hikes are again slipping out of view. The ISM reports and broad labor market indicators suggest that economic momentum is slipping below...

Greg Gibbs

Long BPA Currency (GBP/USD Future) Jun '17 140-Strike Calls at $1.30

I believe the selloff in GBPUSD has been an overreaction in the short term. Implied volatility is back to affordable levels, making betting on GBP...

Asymmetric Payoffs

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