Economist, Centennial Asia Advisors

Jason Tan

Economist

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

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GDP contracted 4% y/y in 4Q15, after rising 1.3% y/y in 3Q15. Investment growth was insufficient to offset weak consumer spending and trade. Overall GDP expanded 0.4% in 2015, a slight recovery from the 0% expansion in 2014.</li>
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Industrial activity fell 6% m/m in Dec 15, a slight improvement from the 0.9% y/y fall in Nov 15. Index for services ticked up 0.1% y/y in Dec 15, down from the 1.5% y/y increase in Nov 15. Machinery orders fell 4.2% m/m in Dec 15, up from a decline of 14.4% m/m increase in…</li>
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GDP contracted 4% y/y in 4Q15, after rising 1.3% y/y in 3Q15. Investment growth was insufficient to offset weak consumer spending and trade. Overall GDP expanded 0.4% in 2015, a slight recovery from the 0% expansion in 2014.

Industrial activity fell 6% m/m in Dec 15, a slight improvement from the 0.9% y/y fall in Nov 15. Index for services ticked up 0.1% y/y in Dec 15, down from the 1.5% y/y increase in Nov 15. Machinery orders fell 4.2% m/m in Dec 15, up from a decline of 14.4% m/m increase in…


Japan: Economy Struggling to Find Solid Ground

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.

The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two policy easing (USD/JPY around 110).  The fall comes despite the short term yield advantage for the USD/JPY rising to its widest margin in many years.  The key driver is higher global market uncertainty sharply reducing yield-seeking behavior.  The effectiveness of unconventional QE/negative rate policies appears to have sharply diminished over the last year.  We may even be witnessing the undesirable unintended consequences of prolonged global QE coming home to roost and dampening market confidence.  Nevertheless it is hard to see any other path for the BoJ and ECB, suggesting both may opt for more negative rates and play the intervention card if currencies strength persist.  We note that in the most recent bout of global market uncertainty this year, intensifying since the BoJ opted for negative rates on 29-Jan, JPY has not strengthened more than gold.

The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two policy easing (USD/JPY around 110).  The fall comes despite the short term yield advantage for the USD/JPY rising to its widest margin in many years.  The key driver is higher global market uncertainty sharply reducing yield-seeking behavior.  The effectiveness of unconventional QE/negative rate policies appears to have sharply diminished over the last year.  We may even be witnessing the undesirable unintended consequences of prolonged global QE coming home to roost and dampening market confidence.  Nevertheless it is hard to see any other path for the BoJ and ECB, suggesting both may opt for more negative rates and play the intervention card if currencies strength persist.  We note that in the most recent bout of global market uncertainty this year, intensifying since the BoJ opted for negative rates on 29-Jan, JPY has not strengthened more than gold.

AmpGFX - JPY Feeling the Unintended Consequences of QE

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence.  Bottom fishers will be tentative and choppy bearish markets are likely to persist.  Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone financial crises and litigation and compliance costs since the LIBOR and FX fixing scandals are coming home to roost and creating an echo of the financial stress that undermined global economic confidence in the crises of the last decade.  EUR is whippy as investors cope with Euro-centric financial sector stress, but this is only likely to embolden the ECB to adopt more aggressive policy easing measures.  It is possible they emulate the BoJ and adopt a tiered cash rate policy resplendent with a much lower more negative marginal cash rate.  The outcome would be much lower yields across the EUR curve and a weaker EUR (we much prefer to sell EUR against Gold; as discussed in our previous two reports). Australia has proven resilient to global economic and financial stress, but its banks are being infected by global pressures, and we see a significant risk that RBA scope to cut rates turns into an obligation before long.  We see a fallback in the AUD (again we prefer to sell against gold).

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence.  Bottom fishers will be tentative and choppy bearish markets are likely to persist.  Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone financial crises and litigation and compliance costs since the LIBOR and FX fixing scandals are coming home to roost and creating an echo of the financial stress that undermined global economic confidence in the crises of the last decade.  EUR is whippy as investors cope with Euro-centric financial sector stress, but this is only likely to embolden the ECB to adopt more aggressive policy easing measures.  It is possible they emulate the BoJ and adopt a tiered cash rate policy resplendent with a much lower more negative marginal cash rate.  The outcome would be much lower yields across the EUR curve and a weaker EUR (we much prefer to sell EUR against Gold; as discussed in our previous two reports). Australia has proven resilient to global economic and financial stress, but its banks are being infected by global pressures, and we see a significant risk that RBA scope to cut rates turns into an obligation before long.  We see a fallback in the AUD (again we prefer to sell against gold).

AmpGFX - Dead-Cats and Body Blows, Financial Crisis Echo, RBA Scope to Become Obligation

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Our sell out of Asian longs yesterday was timely. S&amp;P top is in place at 1,940 (futures) after hitting our base case level of 1,938 with risk to 1,950. We failed to short the S&amp;P but now calibrating levels on a bounce to short financials, small caps and the S&amp;P. The fact that we broke below 1,910 implies a top is in place. Weak sector links telegraphing further weakness. Our macro bear targets remains at S&amp;P 1,720 (tactical rise) and then 1,620.<div>S&amp;P 1,875 is a level to stage a recovery back to…</div>

Our sell out of Asian longs yesterday was timely. S&amp;P top is in place at 1,940 (futures) after hitting our base case level of 1,938 with risk to 1,950. We failed to short the S&amp;P but now calibrating levels on a bounce to short financials, small caps and the S&amp;P. The fact that we broke below 1,910 implies a top is in place. Weak sector links telegraphing further weakness. Our macro bear targets remains at S&amp;P 1,720 (tactical rise) and then 1,620.S&amp;P 1,875 is a level to stage a recovery back to…

The Bank has cut the effective cash interest rate to -0.1% from +0.1% (-20bp).  Banks will be required to pay 0.1% on balances held in their current account that are above a certain threshold.In order not to tax banks too much, the BoJ has introduced a three-tier system with current account balances up to the first tier still earning 0.1%, zero on the second tier and -0.1% on the third tier.This third tier rate will be the most relevant to money market rates since, with excess reserve balances…

The Bank has cut the effective cash interest rate to -0.1% from +0.1% (-20bp).  Banks will be required to pay 0.1% on balances held in their current account that are above a certain threshold.In order not to tax banks too much, the BoJ has introduced a three-tier system with current account balances up to the first tier still earning 0.1%, zero on the second tier and -0.1% on the third tier.This third tier rate will be the most relevant to money market rates since, with excess reserve balances…

AmpGFX - Quick Take on the BoJ Shock Rate Cut

Japan

TOPIX ETF is an Exchange-traded fund which holds a portfolio representing all stocks in the Tokyo Price Index (TOPIX).  The objective of the trust is to provide investment results that corresponds to the price and yield performance of the component securities of the Tokyo Price Index.

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Nomura ETF Topix (1306 JP)

Japan: Economy Struggling to Find Solid Ground

GDP contracted 4% y/y in 4Q15, after rising 1.3% y/y in 3Q15. Investment growth was insufficient to offset weak consumer spending and trade....

Jason Tan

AmpGFX - JPY Feeling the Unintended Consequences of QE

The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two...

Greg Gibbs

AmpGFX - Dead-Cats and Body Blows, Financial Crisis Echo, RBA Scope to Become Obligation

All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence. Bottom...

Greg Gibbs

Increasing Shorts on Strength

Our sell out of Asian longs yesterday was timely. S&P top is in place at 1,940 (futures) after hitting our base case level of 1,938 with risk...

Thomas Schroeder

AmpGFX - Quick Take on the BoJ Shock Rate Cut

The Bank has cut the effective cash interest rate to -0.1% from +0.1% (-20bp). Banks will be required to pay 0.1% on balances held in their...

Greg Gibbs

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