Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Thematic (Sector/Industry)

<ul><li>RBA communications dominated financial market developments in Australia over the past week.&nbsp; Mr Glenn Stevens gave the clearest indication that the RBA has adopted an easing bias, flagging that 'were a change to monetary policy to be required in the near term, it would almost certainly be an easing, not a tightening.' </li><li>Mr Stevens also suggests that concerns around the employment consequences of rising automation are overblown. The rise of the robots and the changing dynamic of our leisure time will give rise to occupations in the future that are unimaginable today.</li><li>Evidente discusses the risks that the few stocks offering strong growth prospects &ndash; including Domino&rsquo;s Pizza - become over-priced in an environment where the aggregate supply of growth is low.</li></ul>

RBA communications dominated financial market developments in Australia over the past week.&nbsp; Mr Glenn Stevens gave the clearest indication that the RBA has adopted an easing bias, flagging that 'were a change to monetary policy to be required in the near term, it would almost certainly be an easing, not a tightening.' Mr Stevens also suggests that concerns around the employment consequences of rising automation are overblown. The rise of the robots and the changing dynamic of our leisure time will give rise to occupations in the future that are unimaginable today.Evidente discusses the risks that the few stocks offering strong growth prospects &ndash; including Domino&rsquo;s Pizza - become over-priced in an environment where the aggregate supply of growth is low.

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.

Macroeconomics

The surprise overnight was that the BoE suggested a weaker outlook for its trading partners&rsquo; growth is likely to delay its rate hikes until 2017, and it may implement macro-prudential measures to help sustain lower rates; clearly negative for the GBP and it has reacted.&nbsp; The news may have also weighed on the USD to some extent, suggesting that the Fed should also move cautiously on its plans to hike. A hike now seem quite likely in December, provided the data and global financial conditions are reasonably stable.&nbsp; Needless to say the payrolls report in the US may set the tone for the USD. German factory orders were weak with the intensifying scandal at VW potentially a contributing factor. This should keep the ECB on track to ease policy in December.&nbsp; The RBA Statement on Monetary Policy significantly lowered its inflation outlook over the next year.&nbsp;&nbsp; Its growth outlook was little changed with weaker trading partner growth offset by a firmer outlook for non-resource sectors.&nbsp; This view relies on the AUD remaining low and suggests that the RBA would be more comfortable if the currency fell than rose; especially in light of recent falls in commodity prices. And might use its easing bias if the AUD were to rise much.

The surprise overnight was that the BoE suggested a weaker outlook for its trading partners&rsquo; growth is likely to delay its rate hikes until 2017, and it may implement macro-prudential measures to help sustain lower rates; clearly negative for the GBP and it has reacted.&nbsp; The news may have also weighed on the USD to some extent, suggesting that the Fed should also move cautiously on its plans to hike. A hike now seem quite likely in December, provided the data and global financial conditions are reasonably stable.&nbsp; Needless to say the payrolls report in the US may set the tone for the USD. German factory orders were weak with the intensifying scandal at VW potentially a contributing factor. This should keep the ECB on track to ease policy in December.&nbsp; The RBA Statement on Monetary Policy significantly lowered its inflation outlook over the next year.&nbsp;&nbsp; Its growth outlook was little changed with weaker trading partner growth offset by a firmer outlook for non-resource sectors.&nbsp; This view relies on the AUD remaining low and suggests that the RBA would be more comfortable if the currency fell than rose; especially in light of recent falls in commodity prices. And might use its easing bias if the AUD were to rise much.

AmpGFX - Low AUD crucial for RBA game-plan

EUR sits just above key supports (the lows in May and July) and may be setting itself for phase two of its big downswing that began in 2014.&nbsp; The Fed has reaffirmed its guidance on December (conditional on the economy and financial conditions remaining relatively stable).&nbsp; RBA Governor Stevens also reaffirmed his new easing bias, but is likely to wait out the Fed.&nbsp; It would not surprise if the RBA leant on its easing bias to jaw-bone the AUD down should it have any significant uptick.

EUR sits just above key supports (the lows in May and July) and may be setting itself for phase two of its big downswing that began in 2014.&nbsp; The Fed has reaffirmed its guidance on December (conditional on the economy and financial conditions remaining relatively stable).&nbsp; RBA Governor Stevens also reaffirmed his new easing bias, but is likely to wait out the Fed.&nbsp; It would not surprise if the RBA leant on its easing bias to jaw-bone the AUD down should it have any significant uptick.

AmpGFX - EUR facing big test as Fed reaffirms guidance on December

<ul><li>Contrary to Evidente's expectations, the RBA left the Official Cash Rate unchanged at its November Board meeting.&nbsp; The&nbsp;RBA has adopted an easing bias, with the statement reading that&nbsp;'the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.'&nbsp; </li><li>The outlook for interest rates hinges on the RBA's tolerance for sub-trend growth.&nbsp; Despite the RBA's glass half full perspective, Evidente doesn't see much upside to the outlook for activity in the near term.&nbsp;&nbsp;The RBA missed a golden&nbsp;opportunity today to capitalise on the positive narrative that the low 3Q CPI print offered.&nbsp; But the central bank's easing bias suggests that the case for more monetary stimulus (at either&nbsp;the December or &nbsp;February Board meetings) remains compelling.</li><li>The Australian dollar jumped on the news and is trading at around 72 US cents.&nbsp; Despite this, it continues to trade well below fair value based on Evidente's currency model.</li></ul>

Contrary to Evidente's expectations, the RBA left the Official Cash Rate unchanged at its November Board meeting.&nbsp; The&nbsp;RBA has adopted an easing bias, with the statement reading that&nbsp;'the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.'&nbsp; The outlook for interest rates hinges on the RBA's tolerance for sub-trend growth.&nbsp; Despite the RBA's glass half full perspective, Evidente doesn't see much upside to the outlook for activity in the near term.&nbsp;&nbsp;The RBA missed a golden&nbsp;opportunity today to capitalise on the positive narrative that the low 3Q CPI print offered.&nbsp; But the central bank's easing bias suggests that the case for more monetary stimulus (at either&nbsp;the December or &nbsp;February Board meetings) remains compelling.The Australian dollar jumped on the news and is trading at around 72 US cents.&nbsp; Despite this, it continues to trade well below fair value based on Evidente's currency model.

RBA holds fire for now but adopts easing bias

The smart money has decided there will be no rate cut today by the RBA and the AUD has firmed ahead of the announcement. But there are reasons for the RBA to put a cut back on the agenda and renewed price falls in its key commodity markets may encourage the RBA to re-instate a preference for a lower AUD.&nbsp; Strength in the AUD on a no cut announcement may be fleeting and it is likely to fall if the RBA inserts even a modest easing bias into the statement.

The smart money has decided there will be no rate cut today by the RBA and the AUD has firmed ahead of the announcement. But there are reasons for the RBA to put a cut back on the agenda and renewed price falls in its key commodity markets may encourage the RBA to re-instate a preference for a lower AUD.&nbsp; Strength in the AUD on a no cut announcement may be fleeting and it is likely to fall if the RBA inserts even a modest easing bias into the statement.

AmpGFX - Strength in the AUD may be fleeting

Australia

iShares MSCI Australia ETF is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of the MSCI Australia Index. The ETF holds predominantly large-cap stocks from Australian companies. The ETF weights the holdings using a market capitalization methodology and rebalances quarterly.

iShares MSCI Australia (EWA US)

Weekly Impressions

RBA communications dominated financial market developments in Australia over the past week. Mr Glenn Stevens gave the clearest indication that...

Sam Ferraro

AmpGFX - Low AUD crucial for RBA game-plan

The surprise overnight was that the BoE suggested a weaker outlook for its trading partners’ growth is likely to delay its rate hikes until 2017,...

Greg Gibbs

AmpGFX - EUR facing big test as Fed reaffirms guidance on December

EUR sits just above key supports (the lows in May and July) and may be setting itself for phase two of its big downswing that began in 2014. The...

Greg Gibbs

RBA holds fire for now but adopts easing bias

Contrary to Evidente's expectations, the RBA left the Official Cash Rate unchanged at its November Board meeting. The RBA has adopted an easing...

Sam Ferraro

AmpGFX - Strength in the AUD may be fleeting

The smart money has decided there will be no rate cut today by the RBA and the AUD has firmed ahead of the announcement. But there are reasons for...

Greg Gibbs