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

This won’t necessarily sound ground-breaking for many market observers, but the weak USD reflects the bull market in global equities.  Interest rate differentials are playing a very limited role in the FX market, less so than they have for a long time.  The divergence between interest rate spreads and many currencies’ exchange rate to the USD is around historical wides. Several factors are accentuating this divergence and may continue to do so for some time.

This won’t necessarily sound ground-breaking for many market observers, but the weak USD reflects the bull market in global equities.  Interest rate differentials are playing a very limited role in the FX market, less so than they have for a long time.  The divergence between interest rate spreads and many currencies’ exchange rate to the USD is around historical wides. Several factors are accentuating this divergence and may continue to do so for some time.

Stable Genius or Dumb Luck, Trump Gets a Weak Dollar

In our post on Monday (<a href="https://www.smartkarma.com/insights/the-white-trashing-of-the-us-dollar" target="_blank">The white trashing of the US dollar</a>), we suggested that it may be too late and dangerous to sell the USD that is falling in the face of a rising yield advantage, tax cuts that should help boost the already solid recovery path in the USA, late in its economic cycle, and potential repatriation inflows.  There may be some reasonable explanations for the USD fall, such as speculation about QE unwind in Europe and Japan, capital inflows to EM markets, and the toxic political climate in the USA.  Sentiment towards the USD appears quite bearish and may remain weak despite a strengthening US economy and rising inflation expectations.  As such, a better strategy may be the consider the implications of a weaker USD in this context.  In particular, it should add to upside pressure on US yields. Below we discuss this and other reasons to see higher US and global bond yields.

In our post on Monday (The white trashing of the US dollar), we suggested that it may be too late and dangerous to sell the USD that is falling in the face of a rising yield advantage, tax cuts that should help boost the already solid recovery path in the USA, late in its economic cycle, and potential repatriation inflows.  There may be some reasonable explanations for the USD fall, such as speculation about QE unwind in Europe and Japan, capital inflows to EM markets, and the toxic political climate in the USA.  Sentiment towards the USD appears quite bearish and may remain weak despite a strengthening US economy and rising inflation expectations.  As such, a better strategy may be the consider the implications of a weaker USD in this context.  In particular, it should add to upside pressure on US yields. Below we discuss this and other reasons to see higher US and global bond yields.

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Macroeconomics

A recent off-hand remark (since denied) has questioned the willingness of China to continue buying US Treasuries. Coincidently the USD has since tumbled. Doubts remain.The existential debate over the future of the US dollar is becoming polarised between those who, in fact, wrongly claim that China has no choice, since economic arithmetic compels them to buy USD, and those realists who acknowledge China’s desire to replace the USD in Asia. The Europeans had a similar desire some 40-years ago to…

A recent off-hand remark (since denied) has questioned the willingness of China to continue buying US Treasuries. Coincidently the USD has since tumbled. Doubts remain.The existential debate over the future of the US dollar is becoming polarised between those who, in fact, wrongly claim that China has no choice, since economic arithmetic compels them to buy USD, and those realists who acknowledge China’s desire to replace the USD in Asia. The Europeans had a similar desire some 40-years ago to…

The US dollar rout of 2017 has so far continued into 2018, despite a rising US interest rate advantage and tax reform that should help power the US economy.  The dollar looks to be in a bear market and will not easily regain its mojo.  Perhaps it's better to consider the broader implications of a weak USD despite a strengthening US economy embarking on fiscal expansion late in its economic expansion cycle. Trump’s ‘America First’ agenda might have taken a much more acceptable path, based on a valid premise that the USA needed to do more to look after its own, but it is tightly entwined in a much more sinister sense of racism and broader lack of respect for any other country or global challenges.  The USA risks being increasingly sidelined by global leaders, diminishing the value of its assets to global investors.  Cryptocurrencies are holding up well against a regulatory onslaught that may backfire.

The US dollar rout of 2017 has so far continued into 2018, despite a rising US interest rate advantage and tax reform that should help power the US economy.  The dollar looks to be in a bear market and will not easily regain its mojo.  Perhaps it's better to consider the broader implications of a weak USD despite a strengthening US economy embarking on fiscal expansion late in its economic expansion cycle. Trump’s ‘America First’ agenda might have taken a much more acceptable path, based on a valid premise that the USA needed to do more to look after its own, but it is tightly entwined in a much more sinister sense of racism and broader lack of respect for any other country or global challenges.  The USA risks being increasingly sidelined by global leaders, diminishing the value of its assets to global investors.  Cryptocurrencies are holding up well against a regulatory onslaught that may backfire.

Economist

Richard Iley

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/041/952/original/Screen%20Shot%202018-01-11%20at%207.22.48%20PM.png?1515669828" class="editor-image img-responsive" data-smartkarma-image-id="41952"></figure><div class="content-highlight">
As Paul Newman famously quipped after bluffing his way to success in a poker game in the classic movie Cool Hand Luke, 'sometimes nothing is a real cool hand!'. It is doubtful whether Xi Jingping is big Paul Newman fan (although you never know!) but recent events suggest that the Chinese authorities may have been catching up on their old movies during the holiday season. 
<a href="https://www.reuters.com/article/usa-bonds-china/china-officials-recommend-slowing-or-halting-u-s-bond-purchases-bloomberg-idUSL8N1P52Q3" target="_blank">China's reported threat to the US that it may stop buying US Treasuries</a> looks a classic 'Cool Hand' strategy for the simple…
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As Paul Newman famously quipped after bluffing his way to success in a poker game in the classic movie Cool Hand Luke, 'sometimes nothing is a real cool hand!'. It is doubtful whether Xi Jingping is big Paul Newman fan (although you never know!) but recent events suggest that the Chinese authorities may have been catching up on their old movies during the holiday season. 
China's reported threat to the US that it may stop buying US Treasuries looks a classic 'Cool Hand' strategy for the simple…


United States

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

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Stable Genius or Dumb Luck, Trump Gets a Weak Dollar

This won’t necessarily sound ground-breaking for many market observers, but the weak USD reflects the bull market in global equities. Interest...

Greg Gibbs

Multiple Upside Risks for US Bond Yields

In our post on Monday (The white trashing of the US dollar), we suggested that it may be too late and dangerous to sell the USD that is falling in...

Greg Gibbs

China's Biggest 'Big' Question

A recent off-hand remark (since denied) has questioned the willingness of China to continue buying US Treasuries. Coincidently the USD has since...

Michael J. Howell

The White Trashing of the US Dollar

The US dollar rout of 2017 has so far continued into 2018, despite a rising US interest rate advantage and tax reform that should help power the US...

Greg Gibbs

Chart of the Day: Cool Hand Xi?

As Paul Newman famously quipped after bluffing his way to success in a poker game in the classic movie Cool Hand Luke, 'sometimes nothing is a...

Richard Iley

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