ECB unlikely to over-deliver on taper
It is universally anticipated that the ECB announces a significant taper or reduction in the pace of its asset purchases on Thursday this week. Expectations have settled on a halving in the monthly amount to EUR30bn, while adding nine months to the current program that ends in December this year. However, it appears that most market analysts see a risk that the ECB over-delivers with either a faster or larger taper, creating upside risk for Euro yields and the EUR. They may be justified by the stable and solid Eurozone recovery underway. However, the ECB has been at pains this year to avoid severe market reaction to a seemingly inevitable policy taper. And they have expressed explicit concern over the strength in the EUR since its September policy meeting. The ECB is likely to be very wary of exceeding taper expectations; expectations that it appears to have fed the market some weeks ago. Market positioning appears to be quite long EUR. In our view, the EUR is more vulnerable to a correction lower as the market shifts focus from the taper to the ECB’s low rate commitment and the wider EUR yield disadvantage this year.
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 licensed in Australia to provide financial services.
We produce macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange.
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Greg Gibbs is the director and founder of Amplifying Global FX Capital. Greg began his career at the Reserve Bank of Australia in 1989, and in the early 1990s, he was the first economics graduate at the Bank to be assigned to the foreign exchange dealing desk. In 1996, Greg joined Bankers Trust Australia on the FX sales desk covering Australian and international fund managers. In 1999, he joined Westpac Bank in New York and switched to the research side to become the bank’s first FX strategist based in New York, carving out a role covering major currencies. In 2002, he returned to Australia as senior FX strategist at RBC covering APAC currencies, and in 2006 he moved to ABN AMRO in Sydney, reuniting with many of his colleagues from Bankers Trust that were again part of a thriving full-service investment bank. Greg continued to work on at RBS in Sydney as senior FX strategist after it took over ABN AMRO in 2008. He moved to Singapore in July 2012 after the bank consolidated its FX business in Asia, and was appointed Head of APAC Markets Strategy for the bank in February 2014. In early 2015, Greg began to work on establishing his own company, Amplifying Global FX Capital, and launched its website in August 2015 after completing duties at RBS.
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