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

Every Fed rate hike over the last year and more has resulted in a weaker USD, suggesting the Fed has a habit of delivering ‘dovish’ hikes.  There is every reason to expect the same this week.  The May policy minutes sent a number of dovish signals; concern over a flattening yield curve, ambivalence on the labor market and wages, concern over trade policy, a desire for a period of above-target inflation, thoughts that policy is getting near neutral, and the Fed funds creeping up to the IOER. There is evidence that Fed policy tightening is causing financial stress in some emerging markets.  A weaker USD may be seen as a good thing for stabilising global markets. The parallels between the weaker EM currencies and the USD (unsustainable fiscal policies, external deficits and populist strong man politicians) suggest the Fed and Congress should be preparing for their own reckoning.

Every Fed rate hike over the last year and more has resulted in a weaker USD, suggesting the Fed has a habit of delivering ‘dovish’ hikes.  There is every reason to expect the same this week.  The May policy minutes sent a number of dovish signals; concern over a flattening yield curve, ambivalence on the labor market and wages, concern over trade policy, a desire for a period of above-target inflation, thoughts that policy is getting near neutral, and the Fed funds creeping up to the IOER. There is evidence that Fed policy tightening is causing financial stress in some emerging markets.  A weaker USD may be seen as a good thing for stabilising global markets. The parallels between the weaker EM currencies and the USD (unsustainable fiscal policies, external deficits and populist strong man politicians) suggest the Fed and Congress should be preparing for their own reckoning.

ECB’s Praet signalled that the ECB is thinking about withdrawing from net asset purchases soon.  We should expect a plan at the next Governing Council meeting on 14-June for the APP beyond its current completion date in September.  Praet’s upbeat view on the Eurozone’s growth and progress on convergence to the ECB’s inflation target made no mention of the political upheaval in Italy and contagion to Eurozone financial markets, or the threat from US trade policy.  A key question is how would Italian credit spreads cope with the threat of fiscal expansion in Italy that defies EU rules in an environment where the ECB is no longer buying Italian assets.  EUR has lifted on Praet’s comments, bringing forward rate hike expectations more clearly into next year.  However wider credit spreads in the Eurozone have probably limited the upside for EUR.  A weakening ECB commitment to QE will not necessarily be good news for the EUR as the year progresses.

ECB’s Praet signalled that the ECB is thinking about withdrawing from net asset purchases soon.  We should expect a plan at the next Governing Council meeting on 14-June for the APP beyond its current completion date in September.  Praet’s upbeat view on the Eurozone’s growth and progress on convergence to the ECB’s inflation target made no mention of the political upheaval in Italy and contagion to Eurozone financial markets, or the threat from US trade policy.  A key question is how would Italian credit spreads cope with the threat of fiscal expansion in Italy that defies EU rules in an environment where the ECB is no longer buying Italian assets.  EUR has lifted on Praet’s comments, bringing forward rate hike expectations more clearly into next year.  However wider credit spreads in the Eurozone have probably limited the upside for EUR.  A weakening ECB commitment to QE will not necessarily be good news for the EUR as the year progresses.

ECB’s Stepped up Plans to End QE May Not Be Good News for the EUR

The turn lower in the USD in recent sessions feels like a technical retreat from resistance.  It comes despite intensifying risk from a trade war, ongoing political risk in Italy and a tightening US labour market.  However, we are wary that the USD may continue to weaken in the near term.  Political risk in the USA is rising. A trade war could be seen as a threat to US hegemony and support for tariffs from the US public may waver. Global growth indicators have weakened, but there is scope for confidence to improve, even if risks remain elevated.  The Fed has sent mixed messages.  Longer term concerns over the US twin deficits could return.  The AUD outlook remains mixed.  Partial indicators point to more rapid economic recovery, but the housing market may be deteriorating.  Higher coal prices have boosted the terms of trade, but risks from a trade war and China’s regulatory crackdown on shadow-banking remain elevated.

The turn lower in the USD in recent sessions feels like a technical retreat from resistance.  It comes despite intensifying risk from a trade war, ongoing political risk in Italy and a tightening US labour market.  However, we are wary that the USD may continue to weaken in the near term.  Political risk in the USA is rising. A trade war could be seen as a threat to US hegemony and support for tariffs from the US public may waver. Global growth indicators have weakened, but there is scope for confidence to improve, even if risks remain elevated.  The Fed has sent mixed messages.  Longer term concerns over the US twin deficits could return.  The AUD outlook remains mixed.  Partial indicators point to more rapid economic recovery, but the housing market may be deteriorating.  Higher coal prices have boosted the terms of trade, but risks from a trade war and China’s regulatory crackdown on shadow-banking remain elevated.

A Bout of Optimism Amidst Intensifying Risks

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

The Dollar Index has just finished a 5-wave rally off the late-March low, and this correction could carry as far as 92.20-92.70.  Another rally from there or above would more clearly finish a 5-wave rally off the Q1 low.  If it can produce that 5-waver, it would provide an initial signal that the Q1 low marked the beginning of a new bull phase, reviving the targets at 108-112.  We are downgrading to Hold from Buy, and raising the stop on that to 90.93, where a bearish overlap with the March rally high would occur.  (Charts 1 and 2).

The Dollar Index has just finished a 5-wave rally off the late-March low, and this correction could carry as far as 92.20-92.70.  Another rally from there or above would more clearly finish a 5-wave rally off the Q1 low.  If it can produce that 5-waver, it would provide an initial signal that the Q1 low marked the beginning of a new bull phase, reviving the targets at 108-112.  We are downgrading to Hold from Buy, and raising the stop on that to 90.93, where a bearish overlap with the March rally high would occur.  (Charts 1 and 2).

Individual country preliminary inflation data for May suggest that Eurozone headline and core measures will rebound more than expected.  Without the political upheaval in Italy, the data might signal a clearer path to exiting QE and support a sizeable recovery in EUR.  Political uncertainty eased somewhat on Tuesday and EUR has rebounded, but the situation remains fluid.  US economic reports were mixed with a downward revision in Q1 PCE inflation, and softer ADP employment.  However, the Beige Book pointed to somewhat more wage and inflation pressure.  The Bank of Canada suggested that a hike at its next meeting in July would be consistent with their gradual normalisation in rates policy, necessary with inflation on target and the economy operating near capacity.  They see risks from trade policy and global stresses, but not enough to derail plans to hike soon.

Individual country preliminary inflation data for May suggest that Eurozone headline and core measures will rebound more than expected.  Without the political upheaval in Italy, the data might signal a clearer path to exiting QE and support a sizeable recovery in EUR.  Political uncertainty eased somewhat on Tuesday and EUR has rebounded, but the situation remains fluid.  US economic reports were mixed with a downward revision in Q1 PCE inflation, and softer ADP employment.  However, the Beige Book pointed to somewhat more wage and inflation pressure.  The Bank of Canada suggested that a hike at its next meeting in July would be consistent with their gradual normalisation in rates policy, necessary with inflation on target and the economy operating near capacity.  They see risks from trade policy and global stresses, but not enough to derail plans to hike soon.

Euro Inflation, US Economy and Canada Rates Still on Track

United States

The US dollar is the official currency of the United States of America.

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USD (USD CURNCY)

How Dovish Will the Fed Be?

Every Fed rate hike over the last year and more has resulted in a weaker USD, suggesting the Fed has a habit of delivering ‘dovish’ hikes. There...

Greg Gibbs

ECB’s Stepped up Plans to End QE May Not Be Good News for the EUR

ECB’s Praet signalled that the ECB is thinking about withdrawing from net asset purchases soon. We should expect a plan at the next Governing...

Greg Gibbs

A Bout of Optimism Amidst Intensifying Risks

The turn lower in the USD in recent sessions feels like a technical retreat from resistance. It comes despite intensifying risk from a trade war,...

Greg Gibbs

US Dollar: Monthly Currency Summary

The Dollar Index has just finished a 5-wave rally off the late-March low, and this correction could carry as far as 92.20-92.70. Another rally...

Peter Beuttell

Euro Inflation, US Economy and Canada Rates Still on Track

Individual country preliminary inflation data for May suggest that Eurozone headline and core measures will rebound more than expected. Without...

Greg Gibbs

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)