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

The CNY is still one of the least volatile currencies in Asia, but it has become more volatile and is the weakest in Asia this year.  Since the beginning of the year, The Chinese government has moved to emphasize management of its exchange rate against a basket of other currencies.  Their official basket includes significant components for EUR, JPY, and GBP.  As such, even though the CNY has depreciated significantly against the USD, it has been stable against its basket since July.  Nevertheless, China did allow the CNY to depreciate steadily against its basket in the first half of the year, and it appears to be pursuing a weaker exchange rate policy.  Chinese citizens and company capital outflow has persistent at a moderate pace this year, kept under control by capital flow restrictions.  However, in recent months it has picked up to a high since January when adding inflows from onshore to offshore RMB. These flows do not appear be causing severe liquidity problems for Chinese capital markets or wider global risk aversion, but they do point to underlying weakness in Chinese economic confidence and may be contributing to strength in the USD against other currencies.

The CNY is still one of the least volatile currencies in Asia, but it has become more volatile and is the weakest in Asia this year.  Since the beginning of the year, The Chinese government has moved to emphasize management of its exchange rate against a basket of other currencies.  Their official basket includes significant components for EUR, JPY, and GBP.  As such, even though the CNY has depreciated significantly against the USD, it has been stable against its basket since July.  Nevertheless, China did allow the CNY to depreciate steadily against its basket in the first half of the year, and it appears to be pursuing a weaker exchange rate policy.  Chinese citizens and company capital outflow has persistent at a moderate pace this year, kept under control by capital flow restrictions.  However, in recent months it has picked up to a high since January when adding inflows from onshore to offshore RMB. These flows do not appear be causing severe liquidity problems for Chinese capital markets or wider global risk aversion, but they do point to underlying weakness in Chinese economic confidence and may be contributing to strength in the USD against other currencies.

Weaker CNY Inducing More China Capital Outflow and Reinforcing USD Strength

Looking over the map, recent USD gains are less about renewed strength in the US economy and more about weaker trends in JPY, GBP and EUR spilling over to several emerging markets through direct links to their currencies or via currency basket regimes.  Commodity currencies and some emerging market currencies that are less influenced by these weaker major currencies, with more stable political environments, have performed solidly against the USD. We may continue to see weakness in non-dollar major currencies, provided the US economy and rates outlook remains stable. And we may see more spillover to some EM currencies in coming weeks.  Both EUR and JPY appear to be developing more sustained weaker trends and they may have some way to unwind excess gains in the first half of the year as vicious cycles turn to virtuous ones (related to rising global bond yields).  In essence, their currencies may weaken in response to their negative interest rates, improving inflation expectations, and a sense that their easy monetary policies are succeeding in holding down real yields. This may tend to perpetuate the recent trend towards a weaker EUR and JPY and relatively strong, if not outright strength, in commodity currencies. However, higher global bond yields may also tend to undermine currencies that have relied on flows into their bond market from investors seeking higher yield in an, until recent weeks, diminishing global yield environment.

Looking over the map, recent USD gains are less about renewed strength in the US economy and more about weaker trends in JPY, GBP and EUR spilling over to several emerging markets through direct links to their currencies or via currency basket regimes.  Commodity currencies and some emerging market currencies that are less influenced by these weaker major currencies, with more stable political environments, have performed solidly against the USD. We may continue to see weakness in non-dollar major currencies, provided the US economy and rates outlook remains stable. And we may see more spillover to some EM currencies in coming weeks.  Both EUR and JPY appear to be developing more sustained weaker trends and they may have some way to unwind excess gains in the first half of the year as vicious cycles turn to virtuous ones (related to rising global bond yields).  In essence, their currencies may weaken in response to their negative interest rates, improving inflation expectations, and a sense that their easy monetary policies are succeeding in holding down real yields. This may tend to perpetuate the recent trend towards a weaker EUR and JPY and relatively strong, if not outright strength, in commodity currencies. However, higher global bond yields may also tend to undermine currencies that have relied on flows into their bond market from investors seeking higher yield in an, until recent weeks, diminishing global yield environment. 

Weaker EUR & JPY, Stronger Commodity Currencies

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Thomas Schroeder

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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

<div>S&amp;P break down confirmation</div><div>Our call for a decline from September 29th is panning out after the impulsive move lower that is breaching pattern support at S&amp;P 2,135. Target remains at 2,090 with risk of an overshoot to 2,050. Break down out of the congestive pattern from mid-September should reach a minor new low below the Sept 12 low of 2,100 thus our support at 2,080 and target of 2,090 with overshoot risk to 2,050. 1,980 represents a much bigger support level.</div>S&amp;P futures chart (hourly structure…

S&amp;P break down confirmationOur call for a decline from September 29th is panning out after the impulsive move lower that is breaching pattern support at S&amp;P 2,135. Target remains at 2,090 with risk of an overshoot to 2,050. Break down out of the congestive pattern from mid-September should reach a minor new low below the Sept 12 low of 2,100 thus our support at 2,080 and target of 2,090 with overshoot risk to 2,050. 1,980 represents a much bigger support level.S&amp;P futures chart (hourly structure…

S&P Targets 2,090, Bullish DXY to Punish EM's

GBP has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of significant UK fiscal stimulus.  The outlook remains negative, but it is risky to jump on the selling bandwagon.  Bond yields may have resumed a fledgling rising trend, supported by the BoJ’s ‘Yield Curve Control’ and notions of ECB tapering that stem from the same concern that flat yield curves are bad for the financial sector and may be counter-productive. Higher yields are also supported by increasing expectations of more fiscal stimulus and firming commodity prices related to modest improvement in global economic activity.  Yields may be rebounding from extraordinary lows generated by fear of a shortage of bonds to feed QE programs, and depressed views on inflation and secular stagnation.  Gold has broken key support, weighed down by rising bond yields and firming confidence in global growth.  JPY has also broken a year-long downtrend and combined with weaker trends in gold and GBP is spilling over to broader gains in the USD, even though US economic data has been mixed. Vague ECB taper talk has added uncertainty.  It may tend to reinforce a rise in yields, but threatens to turn what was a constructive market to one that is more risk-averse.

GBP has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of significant UK fiscal stimulus.  The outlook remains negative, but it is risky to jump on the selling bandwagon.  Bond yields may have resumed a fledgling rising trend, supported by the BoJ’s ‘Yield Curve Control’ and notions of ECB tapering that stem from the same concern that flat yield curves are bad for the financial sector and may be counter-productive. Higher yields are also supported by increasing expectations of more fiscal stimulus and firming commodity prices related to modest improvement in global economic activity.  Yields may be rebounding from extraordinary lows generated by fear of a shortage of bonds to feed QE programs, and depressed views on inflation and secular stagnation.  Gold has broken key support, weighed down by rising bond yields and firming confidence in global growth.  JPY has also broken a year-long downtrend and combined with weaker trends in gold and GBP is spilling over to broader gains in the USD, even though US economic data has been mixed. Vague ECB taper talk has added uncertainty.  It may tend to reinforce a rise in yields, but threatens to turn what was a constructive market to one that is more risk-averse.

AmpGFX - Knock-Ons from Rising Bond Yields

Currency markets have been mixed, choppy and in most cases exhibiting no trend over recent months. There are few clear opportunities and a number of risks to consider.  Two key data points this week in the USA include PCE inflation and durable goods orders. The Fed has forecast a subdued outlook for inflation, but it is not far below target, and the CPI measure is trending higher and above target.  Capital investment has been weak, but there has been a lift-off in orders in the two months to July, it will be important to see if this can build further.  However, recent broad activity indicators have been weak.  The forecast for a more gradual and shallow hiking path by the Fed helped lift some EM and commodity currencies last week. The BoJ policy meeting also contributed to a drop in long term yields back into their previous range, contributing to a rebound in equities and gold.  EM bonds and equities led the rebound in riskier assets and may continue to attract demand unless the low global rates view at the Fed is questioned.  Brexit and banking sector concerns may weigh on the GBP and EUR.  CAD looks a bit expensive relative to rates and oil prices.  A number of key events this week may set the tone for CAD; including a speech by Poloz, USA presidential debate, OPEC talks, and GDP data.

Currency markets have been mixed, choppy and in most cases exhibiting no trend over recent months. There are few clear opportunities and a number of risks to consider.  Two key data points this week in the USA include PCE inflation and durable goods orders. The Fed has forecast a subdued outlook for inflation, but it is not far below target, and the CPI measure is trending higher and above target.  Capital investment has been weak, but there has been a lift-off in orders in the two months to July, it will be important to see if this can build further.  However, recent broad activity indicators have been weak.  The forecast for a more gradual and shallow hiking path by the Fed helped lift some EM and commodity currencies last week. The BoJ policy meeting also contributed to a drop in long term yields back into their previous range, contributing to a rebound in equities and gold.  EM bonds and equities led the rebound in riskier assets and may continue to attract demand unless the low global rates view at the Fed is questioned.  Brexit and banking sector concerns may weigh on the GBP and EUR.  CAD looks a bit expensive relative to rates and oil prices.  A number of key events this week may set the tone for CAD; including a speech by Poloz, USA presidential debate, OPEC talks, and GDP data.

AmpGFX - Tough Currency Markets Await Key Events

United States

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

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USD (USD CURNCY)

Weaker CNY Inducing More China Capital Outflow and Reinforcing USD Strength

The CNY is still one of the least volatile currencies in Asia, but it has become more volatile and is the weakest in Asia this year. Since the...

Greg Gibbs

Weaker EUR & JPY, Stronger Commodity Currencies

Looking over the map, recent USD gains are less about renewed strength in the US economy and more about weaker trends in JPY, GBP and EUR spilling...

Greg Gibbs

S&P Targets 2,090, Bullish DXY to Punish EM's

S&P break down confirmationOur call for a decline from September 29th is panning out after the impulsive move lower that is breaching pattern...

Thomas Schroeder

AmpGFX - Knock-Ons from Rising Bond Yields

GBP has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of...

Greg Gibbs

AmpGFX - Tough Currency Markets Await Key Events

Currency markets have been mixed, choppy and in most cases exhibiting no trend over recent months. There are few clear opportunities and a number...

Greg Gibbs

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)