Independent Insight Provider

Stewart Paterson

Taurus Advisors LLP

Macroeconomics

<p>Turkey is not the only emerging market in the early stages of what could be a classic emerging market financial crisis (see: <a href="https://www.smartkarma.com/insights/money-matters-turkey-on-the-brink" target="_blank" data-smartkarma-citation="insights:7953">Money Matters: Turkey on the Brink?</a>). Mexico has found itself at the sharp end of rhetoric from the US president-elect but the economy was already in trouble.  Is another Tequila crisis brewing (or distilling)?</p><p>Mexico's current account deficit has been widening since 2010 and stands at around 3.5% of GDP. External debt has roughly doubled since 2009 and stands at about…</p>

Turkey is not the only emerging market in the early stages of what could be a classic emerging market financial crisis (see: Money Matters: Turkey on the Brink?). Mexico has found itself at the sharp end of rhetoric from the US president-elect but the economy was already in trouble.  Is another Tequila crisis brewing (or distilling)?Mexico's current account deficit has been widening since 2010 and stands at around 3.5% of GDP. External debt has roughly doubled since 2009 and stands at about…

Money Matters: Could Tequila Mixed with Moutai Be Explosive.

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.

<p><em>In our first note for </em>2017<em> we are not ready to draw any significant conclusions for global currency markets.  It is evident that a significant correction in the USD has occurred in the first week of the year.  This may reflect significantly stronger than expected economic indicators in a range of countries other than the USA, suggesting that a cyclical upswing in the global economy is underway since around Q4 last year, helping lift support for global asset prices and investment outside of the USA.  It may reflect a natural cooling in the outlook for the </em>Trump-effect<em> on the USA economy after a surge of optimism late last year.  It may reflect a spillover from a rebound in Chinese yuan engineered by a squeeze in offshore CNH liquidity.  CNH volatility around the turn of the year is starting to look like a regular occurrence, after similar developments a year earlier.</em></p>

In our first note for 2017 we are not ready to draw any significant conclusions for global currency markets.  It is evident that a significant correction in the USD has occurred in the first week of the year.  This may reflect significantly stronger than expected economic indicators in a range of countries other than the USA, suggesting that a cyclical upswing in the global economy is underway since around Q4 last year, helping lift support for global asset prices and investment outside of the USA.  It may reflect a natural cooling in the outlook for the Trump-effect on the USA economy after a surge of optimism late last year.  It may reflect a spillover from a rebound in Chinese yuan engineered by a squeeze in offshore CNH liquidity.  CNH volatility around the turn of the year is starting to look like a regular occurrence, after similar developments a year earlier.

Broadening Evidence of Global Economic Recovery

Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

<p>I was working on a bigger piece on HK vs Singapore which I will put out later, and reviewing political classifications of economies, when I saw a good comment from Ray Dalio on Trump and his invocation of Ayn Rand. I was also in the middle of reading the history of Athens and re-reading Aristotle’s Constitution of Athens, which added perspective to Dalio. There is a lot to apply to today which I think is worth noting.</p><p>Quick conclusions before delving deeper:</p><ul><li>Ray Dalio is right to invoke Ayn Rand and flag the positives Trump could bring about;</li><li>But Let’s also keep in mind how deep the recent hole banks, Bernanke and Obama dug;</li><li>Looking at Aristotle as well, we might say that Trump’s partial democratic election has been to install an Aristocracy…this will certainly be interesting;</li><li>There are some really good free reads to turn to for a quick study of Ayn Rand;</li><li>When we listen back to Ayn Rand, we see that she disliked MNCs/Corporations because of their manipulation of government…Let’s see where Trump takes this.</li></ul>

I was working on a bigger piece on HK vs Singapore which I will put out later, and reviewing political classifications of economies, when I saw a good comment from Ray Dalio on Trump and his invocation of Ayn Rand. I was also in the middle of reading the history of Athens and re-reading Aristotle’s Constitution of Athens, which added perspective to Dalio. There is a lot to apply to today which I think is worth noting.Quick conclusions before delving deeper:Ray Dalio is right to invoke Ayn Rand and flag the positives Trump could bring about;But Let’s also keep in mind how deep the recent hole banks, Bernanke and Obama dug;Looking at Aristotle as well, we might say that Trump’s partial democratic election has been to install an Aristocracy…this will certainly be interesting;There are some really good free reads to turn to for a quick study of Ayn Rand;When we listen back to Ayn Rand, we see that she disliked MNCs/Corporations because of their manipulation of government…Let’s see where Trump takes this.

Trump Not Likely to Halt Decline of US. But Ray Dalio Makes Good Case in Bringing Back Ayn Rand

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

<ul>
<li>Overweighting EM versus DM and global resources/deep cyclicals looked like a compelling contrarian bet coming into Q1 as consensus bearishness reached an extreme.</li>
<li><div>If the reflationary theme persists through 2017, EM equities will outperform bonds - the structural decline in ROE which led to very low P/B ratios now looks over.</div></li>
<li><div>The broad improvement in EM relative macro momentum is reflected in net earnings revision momentum (strongest in MSCI AXJ, with India the exception) and factory PMIs, if not…</div></li>
</ul>


Overweighting EM versus DM and global resources/deep cyclicals looked like a compelling contrarian bet coming into Q1 as consensus bearishness reached an extreme.
If the reflationary theme persists through 2017, EM equities will outperform bonds - the structural decline in ROE which led to very low P/B ratios now looks over.
The broad improvement in EM relative macro momentum is reflected in net earnings revision momentum (strongest in MSCI AXJ, with India the exception) and factory PMIs, if not…


2017 Asset Allocation Outlook: Part 1 – Emerging Markets and Commodities

<ul>
<li><div>Gold miners have crashed about a third since the August 25<sup>th</sup> note warning they were vulnerable to real yields (with which gold inversely correlates) heading higher – the worst looks over.</div></li>
<li><div><span lang="EN-US">With the USD index testing the 100 level, a new consensus has rapidly formed around loose US fiscal policy coinciding with tighter monetary policy in a re-run of the 1980s-dollar bull market.</span></div></li>
<li><div>
<span lang="EN-US">The US 10-yr yield on a currency hedged basis is attractive again to European/Japanese investors -renewed inflows should</span>…</div></li>
</ul>


Gold miners have crashed about a third since the August 25th note warning they were vulnerable to real yields (with which gold inversely correlates) heading higher – the worst looks over.
With the USD index testing the 100 level, a new consensus has rapidly formed around loose US fiscal policy coinciding with tighter monetary policy in a re-run of the 1980s-dollar bull market.

The US 10-yr yield on a currency hedged basis is attractive again to European/Japanese investors -renewed inflows should…


Reflation Trade Overshooting, as Eurozone Political Tail Risk Revives - 17th Nov 2016

Italy

Intesa Sanpaolo attracts deposits and offers banking and financial services. The Bank offers consumer credit, asset management, Internet banking, merchant banking, securities brokerage, factoring, and lease financing services, and manages mutual funds.  Intesa Sanpaolo operates branches throughout Italy, and offices elsewhere in Europe, Asia, and the United States.

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Intesa Sanpaolo (ISP IM)

Money Matters: Could Tequila Mixed with Moutai Be Explosive.

Turkey is not the only emerging market in the early stages of what could be a classic emerging market financial crisis (see: Money Matters: Turkey...

Stewart Paterson

Broadening Evidence of Global Economic Recovery

In our first note for 2017 we are not ready to draw any significant conclusions for global currency markets. It is evident that a significant...

Greg Gibbs

Trump Not Likely to Halt Decline of US. But Ray Dalio Makes Good Case in Bringing Back Ayn Rand

I was working on a bigger piece on HK vs Singapore which I will put out later, and reviewing political classifications of economies, when I saw a...

Charles De Trenck

2017 Asset Allocation Outlook: Part 1 – Emerging Markets and Commodities

Overweighting EM versus DM and global resources/deep cyclicals looked like a compelling contrarian bet coming into Q1 as consensus bearishness...

Sean Maher

Reflation Trade Overshooting, as Eurozone Political Tail Risk Revives - 17th Nov 2016

Gold miners have crashed about a third since the August 25th note warning they were vulnerable to real yields (with which gold inversely...

Sean Maher

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