Forget bitcoin; the real bubble is global equities
There is something of a disconnect between US equities, firing up on tax reform, and the USD and US bond yields struggling to gain traction. Some of the recent weakness in the USD appears to be related to political uncertainty, embodied in a sinking Trump approval rating, despite tax reform. Trump's net approval rating hit a new low last week, but the latest polls hint at an improvement. Notwithstanding tax reform and risk that the US economy overheats in 2017, the market has more bearish calls for the USD next year. These calls are not unreasonable, but the market may be relying too much on convenient explanations for a weaker USD in 2017 and assuming these will hold up in 2018. We see more to the Trump tax reform bill than many left-wing commentators that are hoping Trump will fail. The 21% corporate tax rate and nationalist economic policies have other government’s worried and may drive companies to book more revenue in the USA, even before you add in a potential real boost to growth. This may make the tax policy look much better than modest market expectations. The taper in global QE is too slow as we head into 2018, and may pump more air into frothy asset markets, creating a more dangerous bubble than bitcoin (which we see as still under-valued as it grows into a store of value asset). As we head into 2018, we suggest taking FX forecasts with a grain of salt. In this environment, it may pay to adopt a patient and contrary stance, waiting for fleeting trends to crack and the fickle market to switch focus to the next spurious correlation. Beware unforeseen strength in the US economy related to the massive corporate tax cut and upside risk to inflation. This may result in surprising strength in the USD in 2018 and a correction on global asset markets.
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.
These reports are drawn from analysis by Greg Gibbs and inform the capital management he undertakes on behalf of the company.
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.
We have two subscription levels for our research. AmpGFX members receive our AmpGFX reports. These are our flagship macroeconomic analysis produced two to three times per week. Real-Time members receive our AmpGFX reports plus Real Time Briefings. These include our specific trading strategy, including our entry levels and related orders, and additional market commentary.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.