Rates Strategist, Bondcritic

Sumit Gupta

Rates Strategist

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

FX & Rates

We are launching our Rates Monitor to track movements in global interest rates. <ul><li>
The US Federal Reserve Bank could be entering policy accommodation at its upcoming meeting on July 31, in our view. We note that historically, episodes of policy accommodation have lasted for a considerable number of months. Furthermore, the number of rate cuts (or QE equivalent) needed have been significant. 
</li></ul><ul><li>
If the historical trend is repeated, policy rates could eventually hit zero and it is potentially likely for the Fed to look for measures beyond rate cuts. 
</li></ul><ul><li>However, long-term rates today are also not significantly above the zero-lower bound. The closer they approach the zero limit; somewhat lesser the ability of unconventional policy measures to stimulate. </li></ul>

We are launching our Rates Monitor to track movements in global interest rates. 
The US Federal Reserve Bank could be entering policy accommodation at its upcoming meeting on July 31, in our view. We note that historically, episodes of policy accommodation have lasted for a considerable number of months. Furthermore, the number of rate cuts (or QE equivalent) needed have been significant. 

If the historical trend is repeated, policy rates could eventually hit zero and it is potentially likely for the Fed to look for measures beyond rate cuts. 
However, long-term rates today are also not significantly above the zero-lower bound. The closer they approach the zero limit; somewhat lesser the ability of unconventional policy measures to stimulate. 

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

SPX is pressing into the dual top zone at 2,950 and a make or break point for the global cycle. After the break above 2,800 we view this as another important juncture for the US cycle.RSI near that 70 resistance is the ideal fade zone with MACD resistance noted above with the trendline marking an key inflection point given we have yet to fully unwind bear divergence.Core sectors are still underperforming as long as we stay below 2,950.US 5 year yield is resting in key pivot support at 1.80% and will act as a bounce/break signals for the 10yr in a lead manner. We outline clear medium term resistance and support points on a pivotal yield turn.

SPX is pressing into the dual top zone at 2,950 and a make or break point for the global cycle. After the break above 2,800 we view this as another important juncture for the US cycle.RSI near that 70 resistance is the ideal fade zone with MACD resistance noted above with the trendline marking an key inflection point given we have yet to fully unwind bear divergence.Core sectors are still underperforming as long as we stay below 2,950.US 5 year yield is resting in key pivot support at 1.80% and will act as a bounce/break signals for the 10yr in a lead manner. We outline clear medium term resistance and support points on a pivotal yield turn.

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as well as our SOX-NDX-SPX domino cascade call that would lead to a downturn. This topping sequence was outlined on April 29 <a href="https://www.smartkarma.com/insights/sox-cracks-that-would-impact-the-global-tech-cycle" target="_blank" data-smartkarma-citation="insights:29471">SOX Cracks that Would Impact the Global Tech Cycle</a> and again on May 23 <a href="https://www.smartkarma.com/insights/sox-bleed-into-ndx-spx-and-global-tech-playing-out" target="_blank" data-smartkarma-citation="insights:29999">SOX Bleed into NDX, SPX and Global Tech Playing Out</a> .We now see more ominous signals unfolding that could induce a near term flash crash.Plunging bond yields, weak oil, weakening US equity breadth, USD/JPY triangle breakdown risk, gold perking up and subdued volatility are all variables culminating into a perfect storm as Trump wields his tariff saber.Charts pinpoint downside inflection triggers that would see a continueation of our bleed from tech into the SPX and the global risk cycle.

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as well as our SOX-NDX-SPX domino cascade call that would lead to a downturn. This topping sequence was outlined on April 29 SOX Cracks that Would Impact the Global Tech Cycle and again on May 23 SOX Bleed into NDX, SPX and Global Tech Playing Out .We now see more ominous signals unfolding that could induce a near term flash crash.Plunging bond yields, weak oil, weakening US equity breadth, USD/JPY triangle breakdown risk, gold perking up and subdued volatility are all variables culminating into a perfect storm as Trump wields his tariff saber.Charts pinpoint downside inflection triggers that would see a continueation of our bleed from tech into the SPX and the global risk cycle.

US Treasury (10 Yr Generic) / Technical Analysis

Our macro yield top call at 3.26% has sliced through support targets at 2.62% and 2.40% with 2.32% touted as a level that was expected to induce a bounce. Current pressure and the lower wedge support in yield calls for an adjustment to our bounce sequence.Intermediate cycle is moving into a cycle below our original target of 2.32%. A short term yield low will induce a bounce back to pattern resistance with risk of a secondary break higher on the back of noted indicator divergence that is not confirming recent lows in yield. This occurs when the market is saturated with bond long positions and consensus become complacent.We have some clear rally and fade targets with a secondary push higher in yield pivot level. A surprise rise in yield would help support the USD which has been gaining momentum and pressure emerging markets further.

Our macro yield top call at 3.26% has sliced through support targets at 2.62% and 2.40% with 2.32% touted as a level that was expected to induce a bounce. Current pressure and the lower wedge support in yield calls for an adjustment to our bounce sequence.Intermediate cycle is moving into a cycle below our original target of 2.32%. A short term yield low will induce a bounce back to pattern resistance with risk of a secondary break higher on the back of noted indicator divergence that is not confirming recent lows in yield. This occurs when the market is saturated with bond long positions and consensus become complacent.We have some clear rally and fade targets with a secondary push higher in yield pivot level. A surprise rise in yield would help support the USD which has been gaining momentum and pressure emerging markets further.

US 10yr Yield Low and Turn Target Amid Pattern Risk

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 market absorbed more negative news on the global economy last week, including the IMF forecast downgrade, pessimistic ECB, trade threats by the US towards Mexico and Europe. However, by end week, bond yields, risk assets and the EUR were stronger, suggesting the market has built-in a quite negative scenario and may respond more to positive news in coming weeks.Global bond yields reaffirmed a recent rising trend from a low in late-March.  Equities and bond yields may have ended an extended and wide period of divergence and entered a period of convergence or co-movement.  Yields now look relatively low compared to the rebound in equities and commodities this year.There are latent signs of improved economic activity in China, and the US and China may agree on a trade deal relatively soon.

The market absorbed more negative news on the global economy last week, including the IMF forecast downgrade, pessimistic ECB, trade threats by the US towards Mexico and Europe. However, by end week, bond yields, risk assets and the EUR were stronger, suggesting the market has built-in a quite negative scenario and may respond more to positive news in coming weeks.Global bond yields reaffirmed a recent rising trend from a low in late-March.  Equities and bond yields may have ended an extended and wide period of divergence and entered a period of convergence or co-movement.  Yields now look relatively low compared to the rebound in equities and commodities this year.There are latent signs of improved economic activity in China, and the US and China may agree on a trade deal relatively soon.

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US Treasury (10 Yr Generic) (GT10 GOVT)

Rates Monitor: Zero in on US Rates

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Bondcritic

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SPX is pressing into the dual top zone at 2,950 and a make or break point for the global cycle. After the break above 2,800 we view this as another...

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Equity Flash Crash Markers

In April we pinpointed weakening US equity breadth as a dire warning of a peak in US equities (started shorting weaker underperform sectors) as...

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US 10yr Yield Low and Turn Target Amid Pattern Risk

Our macro yield top call at 3.26% has sliced through support targets at 2.62% and 2.40% with 2.32% touted as a level that was expected to induce a...

Thomas Schroeder

Bond Yields Rope-A-Dope and Fight Back

The market absorbed more negative news on the global economy last week, including the IMF forecast downgrade, pessimistic ECB, trade threats by the...

Greg Gibbs

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