WEBVTT - China Apple Ban, Chip Access Latest

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Brian Curtis and I'm Doug Krisner. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 1>Add A hard rain's going to fall, and I'm not

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<v Speaker 1>talking about the Apples story just yet, but the heaviest

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<v Speaker 1>rain in Hong Kong since eighteen eighty four. That is incredible,

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<v Speaker 1>a black rainstorm. Warning it may affect the markets today.

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<v Speaker 1>So for those of you who will be looking and

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<v Speaker 1>listening for the Hong Kong market information, be forewarned about that,

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<v Speaker 1>and we'll track that as those developments ensue. Well, let's

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<v Speaker 1>take a close look at the Apple story. Shares down

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<v Speaker 1>almost another three percent today, wiping out nearly two hundred

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<v Speaker 1>billion dollars of market value in just two days. It

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<v Speaker 1>comes as China plans to expand a ban on the

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<v Speaker 1>use of iPhones in sensitive departments across the government structures.

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<v Speaker 1>So I just tell Bloomberg that the new restrictions could

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<v Speaker 1>include state don't enterprises and other government run organizations. Bloomberg's

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<v Speaker 1>Honor Agrana discusses the potential impact on Apple financially.

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<v Speaker 3>I would say government official nots buying the iPhone is

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<v Speaker 3>not going to be material for Apple. But the question

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<v Speaker 3>really is not so much about that. The question is

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<v Speaker 3>is the close relationship that China has had with Apple

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<v Speaker 3>or the Apple has had with China, are we seeing

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<v Speaker 3>some kind of intent in that? I think that is

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<v Speaker 3>the biggest question here.

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<v Speaker 1>So we're down three point six percent yesterday and two

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<v Speaker 1>point nine percent today, so talking round about six and

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<v Speaker 1>a half percent in two days performance, and we're just

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<v Speaker 1>hearing the views there of Bloomberg's on rog Grana Dock.

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<v Speaker 2>Well, let's get to the day's Fed speak. We heard

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<v Speaker 2>from the New York President John Williams saying monetary policy

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<v Speaker 2>is in a good place. However, you thinks officials will

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<v Speaker 2>need to be data dependent going forward.

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<v Speaker 4>We'll have to keep watching the data carefully, analyzing all

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<v Speaker 4>of that and really asking ourselves the question, is this

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<v Speaker 4>sufficiently restrictive? Do we need to maybe raise rates again to.

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<v Speaker 5>Make sure that we're keeping that steady progress in terms

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<v Speaker 5>of getting the imbalances, you know, shrinking balances in the

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<v Speaker 5>labor market and bring inflation back down.

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<v Speaker 2>Now, the futures market is suggesting the FED will hold

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<v Speaker 2>rate steady again when the committee meets later this month,

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<v Speaker 2>you know, policymakers will have some more economic data to review.

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<v Speaker 2>Before then, including some fresh readings on inflation ran Well.

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<v Speaker 1>The United Auto Workers' Union has rejected an offer a

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<v Speaker 1>counter offer that was made by General Motors. We get

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<v Speaker 1>the story from Bloomberg's and Kates.

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<v Speaker 6>GM had proposed a total sixteen percent pay raise for

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<v Speaker 6>top wage earners at its plants and a fifty six

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<v Speaker 6>percent increased for newer employees who make less. GM also

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<v Speaker 6>included eleven thousand dollars in inflation protection payments and improved

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<v Speaker 6>wages for temporary staff. But UAW President Sean Fain reacted quickly,

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<v Speaker 6>saying that proposal is insulting, with contracts with Detroy's Big

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<v Speaker 6>Three to expire next week. In addition to much higher raises,

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<v Speaker 6>Fain also once guaranteed pensions, reinstated cost of living allowances,

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<v Speaker 6>and retiree healthcare Bloomberg's and cats Well.

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<v Speaker 2>Zoom Video Communications has met with regulators not just here

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<v Speaker 2>in the US, but in the European Union as well

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<v Speaker 2>in some other jurisdictions. The aim here was to outline

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<v Speaker 2>concerns about allegedly anti competitive behavior on the part of Microsoft.

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<v Speaker 2>The story from Bloomberg's Charlie Pellett.

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<v Speaker 7>The source says the communications software maker has talked with

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<v Speaker 7>the Federal Trade Commission, as well as competition enforcers from

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<v Speaker 7>the EU, UK and Germany over the past year. The

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<v Speaker 7>source says Zoom expressed concerns about the way Microsoft gives

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<v Speaker 7>preference to its team's video conferencing software through price bundling

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<v Speaker 7>and product design. Microsoft has been under scrutiny from the

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<v Speaker 7>EU's competition watchdog in New York, Charlie Pellett, Bloomberg Radio, and.

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<v Speaker 1>Again Microsoft trading down about nine tenths of one percent

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<v Speaker 1>in the latest session. China is said to be trying

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<v Speaker 1>to link chip access to climate action at the G

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<v Speaker 1>twenty summit. We get that story from Bloomberg Spawnyaw in

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<v Speaker 1>Hong Kong.

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<v Speaker 8>We hear Chinese officials raise the issue about delivering more

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<v Speaker 8>financing and technology, including chips, to aid efforts to combat

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<v Speaker 8>global warming. Negotiations on climate action are high on the

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<v Speaker 8>agenda ahead of the weekend's meeting in New Delhi. China

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<v Speaker 8>has repeatedly condemned a US move to titan export controls

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<v Speaker 8>on chip technology to China, and it has been in

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<v Speaker 8>talks with G twenty counterparts, including the US, Japan, and

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<v Speaker 8>South Korea. But China's efforts to link chip access to

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<v Speaker 8>climate action are not expected to succeed in Hong Kong.

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<v Speaker 8>I'm Bonnie al Bloomberg Radio.

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<v Speaker 2>Prime Minister Justin Trudeau says Canada is on track to

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<v Speaker 2>sign a trade agreement with Indonesia in the next year.

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<v Speaker 2>Now this comes as Canada is looking to expand trade

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<v Speaker 2>with a number of Asian economies, while it as the

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<v Speaker 2>same time, reduces its reliance on China. Now Trudeau was saying,

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<v Speaker 2>even though relations with China have improved, there is still

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<v Speaker 2>no political space for reprochement.

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<v Speaker 4>China has made decisions over the past years that have

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<v Speaker 4>made it more difficult, not just for Canada but for

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<v Speaker 4>other countries to engage in ways. I will admit in

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<v Speaker 4>twenty fifteen the conversations we had was about working towards

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<v Speaker 4>a free trade deal with China, working towards those sorts

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<v Speaker 4>of things, but in real terms, the choices and the

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<v Speaker 4>actions of China have made that more difficult.

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<v Speaker 2>Well, the relationship between China and Canada turned hostile back

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<v Speaker 2>in twenty eighteen. That's when Canada arrested Huawei executive Mung

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<v Speaker 2>wang Zhou on an extradition request from the US. Now

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<v Speaker 2>that prompted China to detain two Canadians and then impose

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<v Speaker 2>embargoes on some Canadian food exports.

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<v Speaker 1>Right, and even though the US dropped those charges against

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<v Speaker 1>Mung and even though the two Michaels who were released

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<v Speaker 1>from China, relations have not improved. And Doug, you know,

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<v Speaker 1>these comments from Justin Trudeau about no room for rap

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<v Speaker 1>Rochman are quite severe. Trudeau said that a normal relationship

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<v Speaker 1>is quote impossible. Now, those are the types of comments

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<v Speaker 1>that you often hear from ideologues, but not usually from

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<v Speaker 1>prime ministers and presidents. And I think China, I think

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<v Speaker 1>many would understand this and feel this. China is becoming

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<v Speaker 1>much more isolated from the West.

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<v Speaker 2>Most definitely, and I think the markets are kind of

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<v Speaker 2>confirming that trend.

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<v Speaker 1>Before we go, can I just add one quick line.

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<v Speaker 1>It happens on a day when we see that China's

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<v Speaker 1>imports from Russia actually reach a record high, the largest

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<v Speaker 1>ever surge in imports from Russia.

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<v Speaker 2>You're absolutely right. Quick note on the treasury market, because

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<v Speaker 2>I mentioned earlier we had yields down across the curve today,

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<v Speaker 2>I think there is a lot of interest now in

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<v Speaker 2>evidence of softer wages. The Atlanta Fed Wage tracker came

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<v Speaker 2>in an increase in August of five to three, down

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<v Speaker 2>from July's reading of five to seven, and the Wall

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<v Speaker 2>Street Journal reporting that Walmart is cutting wages from new hires.

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<v Speaker 2>I thought that was interesting.

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<v Speaker 1>It is you love to get down and dirty with

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<v Speaker 1>the bond market. I know you go to bed at

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<v Speaker 1>night thinking about the inversion of the yield curve. Well,

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<v Speaker 1>we've got another We've got a guest coming up, Nick Schunmacher,

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<v Speaker 1>who is in the same sort of camp client portfolio

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<v Speaker 1>manager at Drummond Capital Partners. Get we'll get his views

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<v Speaker 1>on markets and how things are moving here at the moment,

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<v Speaker 1>we've seen a lot of red numbers on these screens.

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<v Speaker 1>Time now for global news. Well, let's get right to

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<v Speaker 1>San Francisco and the nine to sixty newsroom. We've got

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<v Speaker 1>Ed Baxter, who is looking at well Asian's closing statements

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<v Speaker 1>on the Russian war in Ukraine. It has set up

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<v Speaker 1>what is expected to be a ten G twenty ed.

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<v Speaker 9>Yeah, that's not the way they wanted, Brian, but it

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<v Speaker 9>looks like the way it is neweling statements. And as

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<v Speaker 9>he ends closed regarding Ukraine, one of the condemned it,

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<v Speaker 9>and another that didn't mention it at all. The formal

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<v Speaker 9>announcement made no mention of the war, although the chair

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<v Speaker 9>statement noted with quote deep concern earn the impact of

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<v Speaker 9>the war that most members strongly condemn. So now the

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<v Speaker 9>focus India and G twenty with Vladimir Putin and Jijimping

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<v Speaker 9>not attending, does it have any meaning at all?

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<v Speaker 7>Well?

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<v Speaker 9>Tim ash RBC global asset strategist says, that is a

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<v Speaker 9>very good question.

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<v Speaker 10>Really, what is it for? What is it now achieving

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<v Speaker 10>when you know, you G seven knocking out the park

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<v Speaker 10>around the Ukraine and unit see all that kind of

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<v Speaker 10>thing bricks enlarged obviously g using that as a as

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<v Speaker 10>a you know, his kind of motor or is his

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<v Speaker 10>you know, his means to kind of project Chinese influence

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<v Speaker 10>and is kind of floundering.

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<v Speaker 9>Yeah. Esh On Bloomberg says it affects economic issues as

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<v Speaker 9>well as climate change, as well as what's going to

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<v Speaker 9>happen in the end of Pacific. US President Joe Biden meanwhile,

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<v Speaker 9>it's tested negative again for COVID, so he was cleared

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<v Speaker 9>to make the trip to the G twenty. We're getting

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<v Speaker 9>more details on the latest US aid package for Ukraine.

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<v Speaker 9>Secretary of State Anti blank And has reported yesterday is

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<v Speaker 9>there today? Pentagon spoke, so when Sabrina Singh outlined what

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<v Speaker 9>has gone.

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<v Speaker 5>The Department announced a new security assistance package through the

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<v Speaker 5>Ukraine's Security Assistance Initiative to support Ukraine's battlefield needs. This

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<v Speaker 5>six hundred million dollar package includes equipment to augment Ukraine's

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<v Speaker 5>air defenses, artillery, munitions, and other capabilities.

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<v Speaker 9>Yeah side note it's mentioned in a new Biden campaign

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<v Speaker 9>ad as well. As Ukraine continues to take back land

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<v Speaker 9>from Russia, it's having to deal in a major way

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<v Speaker 9>with clearing land mines. US Secretary of State Antony blank

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<v Speaker 9>And is continuing his visit there.

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<v Speaker 11>I saw estimates as much as one third of Ukraine's

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<v Speaker 11>territory has to deal with minds or unexploded ordinance. One

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<v Speaker 11>third of the entire country farmland throughout the country unexploded

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<v Speaker 11>ordnance mines, farmland that was feeding eighty million people around

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<v Speaker 11>the world.

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<v Speaker 9>Blanc And says Ukrainians are working together to reclaim their land.

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<v Speaker 9>Things have become more problematic for Congress to dodge a

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<v Speaker 9>US government shutdown. Bloomberg Zach Cohen reports how Speaker Kevin

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<v Speaker 9>McCarthy's officers now trying to tie in Ukraine.

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<v Speaker 12>Could be tied instead to a border bill, which is

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<v Speaker 12>much more contentious and certainly won't pass this month, and

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<v Speaker 12>especially since it doesn't have time to get over to

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<v Speaker 12>the Senate and back in the same version. But there's

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<v Speaker 12>all whole host of issues on border security that the

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<v Speaker 12>two parts need to work out ahead of time. So

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<v Speaker 12>Ukraine ad really in question right now, really the first

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<v Speaker 12>time that's happened on an issue that has had why

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<v Speaker 12>bipartisan supporting Congress since Russia's invasion.

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<v Speaker 9>And President Biden will not be able to work on

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<v Speaker 9>until he gets back from the G twenty and Australian

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<v Speaker 9>Prime Minister Anthony Albanesi will visit Beijing to meet with

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<v Speaker 9>a Chinese government senior leadership before the end of twenty

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<v Speaker 9>twenty three, latest sign of some thaw in the relationship.

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<v Speaker 9>Global News powered by more than twenty seven hundred journalists

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<v Speaker 9>and analysts in over one hundred and twenty countries. In

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<v Speaker 9>San Francisco, I met Baxter in This is Bloomberg.

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<v Speaker 1>This is Bloomberg Daybreak Asia. I'm Brian Curtis along with

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<v Speaker 1>Rushad Salamat and we are joined by Nick Schumaker, who's

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<v Speaker 1>a client portfolio manager at Drummond Capital Partners. Nick, thanks

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<v Speaker 1>very much for joining. As Apple's woes in China sideshell

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<v Speaker 1>or a mean.

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<v Speaker 13>Event, I guess on a geopolitical front, it's quite It's

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<v Speaker 13>a main event, just given the efforts that China went to,

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<v Speaker 13>particularly over the last year, to shut down that the

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<v Speaker 13>US went to to shut down China's capabilities and semiconductors.

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<v Speaker 13>So I think it's a big event geopolitically in terms

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<v Speaker 13>of Apple. I mean, every wealthy person in every country

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<v Speaker 13>in the world owns an iPhone, and I don't think

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<v Speaker 13>that kind of technology staple nature of Apple is changing,

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<v Speaker 13>So I'd say that's more of a shorter term hurdle.

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<v Speaker 13>There obviously be countries now that will be concerned that

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<v Speaker 13>the US and the West can weaponize semiconductors to some

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<v Speaker 13>extent and may favor the version of the new kind

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<v Speaker 13>of iPhone that's been made in China that will have

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<v Speaker 13>a that will have an impact to Apple's margins. But

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<v Speaker 13>I think that's kind of more of a secondary consideration,

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<v Speaker 13>but more just the geopolitical optics of what's happened. I

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<v Speaker 13>think is quite significant.

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<v Speaker 14>Well, certainly, and it doesn't bring Washington and Beshion close

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<v Speaker 14>in any way, shape or form.

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<v Speaker 8>But but tell me.

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<v Speaker 14>About how this is all affecting right now, Nick, What's

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<v Speaker 14>what's happening with the with markets? What has been priced in?

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<v Speaker 14>Or is everybody just looking at monetary policy right now

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<v Speaker 14>and ignoring the geopolitical risks.

0:12:33.520 --> 0:12:38.480
<v Speaker 13>The geopolitical risks do seem to be ignored. I think,

0:12:38.720 --> 0:12:42.440
<v Speaker 13>as you say, markets this year have performed very buoyantly,

0:12:42.679 --> 0:12:46.160
<v Speaker 13>and I think, you know, if you're just some justification

0:12:46.280 --> 0:12:49.520
<v Speaker 13>for that, is that kind of immaculate disinflatory trend that

0:12:49.520 --> 0:12:52.360
<v Speaker 13>we've had. If you think though just about you know,

0:12:52.480 --> 0:12:55.120
<v Speaker 13>the S and P five hundred and the Magnificent seven,

0:12:55.200 --> 0:12:57.760
<v Speaker 13>you know, it's really only two stocks in a Video

0:12:58.840 --> 0:13:01.520
<v Speaker 13>and Meta that have had earnings revisions for this year

0:13:01.520 --> 0:13:06.120
<v Speaker 13>and next, and the rest have had nothing, but they've

0:13:06.120 --> 0:13:08.800
<v Speaker 13>still been up fifty to sixty percent. You've had Tesla

0:13:08.920 --> 0:13:12.120
<v Speaker 13>whose earnings have been essentially going backwards since twenty twenty

0:13:12.120 --> 0:13:14.040
<v Speaker 13>two and are up over one hundred percent. So you've

0:13:14.080 --> 0:13:16.320
<v Speaker 13>had a lot of this kind of what feels in

0:13:16.360 --> 0:13:19.320
<v Speaker 13>some ways like late cycle exuberance in markets this year

0:13:19.880 --> 0:13:23.280
<v Speaker 13>Obviously there's a big innovation cycle now that's going to

0:13:23.320 --> 0:13:26.439
<v Speaker 13>be a result of AI and the introduction of chat

0:13:26.600 --> 0:13:30.960
<v Speaker 13>GPT late last year. But the economic rent from AI

0:13:31.120 --> 0:13:33.160
<v Speaker 13>isn't going to be seven stocks. It's going to be

0:13:33.160 --> 0:13:35.720
<v Speaker 13>a five ten year process. So certainly it does seem

0:13:36.240 --> 0:13:40.840
<v Speaker 13>that the whole soft landing narrative, as that's become more palatable,

0:13:41.200 --> 0:13:43.599
<v Speaker 13>investors have been cheered along by that, and as you

0:13:43.679 --> 0:13:49.199
<v Speaker 13>alluded to, have been ignoring geopolitical risk to a large degree.

0:13:50.000 --> 0:13:52.400
<v Speaker 1>Well, we haven't really been performing all that well of late.

0:13:52.679 --> 0:13:54.960
<v Speaker 1>It could be seasonal in nature, or it could be

0:13:55.040 --> 0:13:58.960
<v Speaker 1>that investors are worried about higher rates for longer from

0:13:59.000 --> 0:14:02.640
<v Speaker 1>the fair. Yeah, although you are starting to hear some

0:14:02.800 --> 0:14:07.839
<v Speaker 1>commentary about perhaps a new direction that the Fed will

0:14:07.920 --> 0:14:11.640
<v Speaker 1>start recalibrating pretty soon about when it needs to start

0:14:11.840 --> 0:14:15.200
<v Speaker 1>pulling back on reads. Where do you stand in that argument?

0:14:15.200 --> 0:14:16.360
<v Speaker 1>Where are you on the spectrum?

0:14:17.000 --> 0:14:19.200
<v Speaker 13>I think so In terms of the US, I think

0:14:19.240 --> 0:14:22.120
<v Speaker 13>the most likely outcome later this month would be a

0:14:22.200 --> 0:14:26.840
<v Speaker 13>hawkish pause. We've probably got the ECB perhaps going one

0:14:26.840 --> 0:14:30.080
<v Speaker 13>more time. They don't have a dual mandate, so it

0:14:30.080 --> 0:14:34.840
<v Speaker 13>really is just fighting inflation. It's too high I think

0:14:35.280 --> 0:14:37.960
<v Speaker 13>what the market is going to recalibrate and why there

0:14:38.000 --> 0:14:40.640
<v Speaker 13>may be some upward pressure on bondules that we've started

0:14:40.640 --> 0:14:42.680
<v Speaker 13>to see with that bears steepening over the last month,

0:14:43.240 --> 0:14:46.960
<v Speaker 13>will be that the markets pricing of rate cuts next

0:14:47.040 --> 0:14:49.680
<v Speaker 13>year may start to be pushed out and the higher

0:14:49.720 --> 0:14:55.479
<v Speaker 13>for longer narrative will be more embedded into market participants.

0:14:55.640 --> 0:14:56.920
<v Speaker 13>Psyche for now.

0:14:57.160 --> 0:14:58.960
<v Speaker 1>And Nick, we've got you for a little extra time.

0:14:59.000 --> 0:15:01.440
<v Speaker 1>So I want to ask a follow up and that Yeah, sure,

0:15:01.240 --> 0:15:04.920
<v Speaker 1>is this a new paradigm. Do you think that going

0:15:04.960 --> 0:15:08.560
<v Speaker 1>forward we're going to see reids stay elevated, They're not

0:15:08.600 --> 0:15:11.640
<v Speaker 1>going to go back down into the one and two

0:15:11.680 --> 0:15:12.400
<v Speaker 1>percent range.

0:15:12.880 --> 0:15:15.560
<v Speaker 13>Yeah, it seems that way. Look, when we run our acylocation,

0:15:15.720 --> 0:15:17.440
<v Speaker 13>we looked at a number of scenarios and one of

0:15:17.480 --> 0:15:22.240
<v Speaker 13>them was the deflatory quagmire. And what a deflatory quagmire

0:15:22.280 --> 0:15:23.960
<v Speaker 13>is is if we were going back to that twenty

0:15:24.080 --> 0:15:26.920
<v Speaker 13>and twelve to twenty nineteen period where you had zero

0:15:26.920 --> 0:15:31.000
<v Speaker 13>interest rate policy QE and negative real yields. I don't

0:15:31.040 --> 0:15:32.920
<v Speaker 13>think we're going back to that. I think kind of

0:15:32.960 --> 0:15:35.240
<v Speaker 13>more return to normal in terms of positive real yields,

0:15:35.280 --> 0:15:37.880
<v Speaker 13>where we have the real yield now at about two

0:15:37.880 --> 0:15:43.440
<v Speaker 13>percent is more of a likely scenario. And I think

0:15:43.640 --> 0:15:47.840
<v Speaker 13>inflation volatility is something that's going to be very relevant

0:15:47.840 --> 0:15:51.360
<v Speaker 13>over the twenty twenties. Even if we do continue to

0:15:51.360 --> 0:15:56.080
<v Speaker 13>see inflation and those disinflationory impulses continuing this year and

0:15:56.120 --> 0:15:59.520
<v Speaker 13>even perhaps next year, I think just the concept of

0:15:59.520 --> 0:16:03.840
<v Speaker 13>inflation volatility will see rates kind of high for longer

0:16:03.880 --> 0:16:08.880
<v Speaker 13>and turn premium in long bonds perhaps higher as well.

0:16:09.480 --> 0:16:09.640
<v Speaker 1>Nick.

0:16:09.680 --> 0:16:12.240
<v Speaker 14>The thing is, you know, we've got a structural shift.

0:16:12.240 --> 0:16:14.200
<v Speaker 14>I mean, you know when Brian was talking about this

0:16:14.240 --> 0:16:16.400
<v Speaker 14>paradigm shift, I mean it is structural in the sense

0:16:16.440 --> 0:16:20.360
<v Speaker 14>that we probably will not return to years of no

0:16:20.880 --> 0:16:24.479
<v Speaker 14>little inflation for quite a while because we've got demographics

0:16:24.480 --> 0:16:27.640
<v Speaker 14>in play. We've got decarbonization have We've got also de

0:16:27.800 --> 0:16:32.560
<v Speaker 14>risking i e. These globalization trends or deglobalization trends, all

0:16:32.640 --> 0:16:36.480
<v Speaker 14>of the moment contriving together to make inflation higher for longer.

0:16:37.040 --> 0:16:38.400
<v Speaker 1>Yeah.

0:16:38.560 --> 0:16:40.640
<v Speaker 13>Correct, Yeah, you've got the friends shoring and all of

0:16:40.680 --> 0:16:43.520
<v Speaker 13>those things. And even now we've seen just more recently

0:16:43.520 --> 0:16:47.440
<v Speaker 13>the energy price at about ninety dollars, which will potentially

0:16:47.480 --> 0:16:50.400
<v Speaker 13>put them up with pressure on inflation, and also inflation

0:16:50.520 --> 0:16:53.960
<v Speaker 13>expectations as well, which we know the FED has still

0:16:54.000 --> 0:16:57.120
<v Speaker 13>shown that they're concerned about keeping I think rates high

0:16:57.160 --> 0:17:00.800
<v Speaker 13>for longer to avoid inflation expectations become unhinge, which was

0:17:00.840 --> 0:17:04.440
<v Speaker 13>that situation we had back in the seventies. So yeah,

0:17:04.480 --> 0:17:07.520
<v Speaker 13>it does feel like inflation will be higher for long.

0:17:07.640 --> 0:17:10.679
<v Speaker 1>So Nick, you're cautious on the US economy if you

0:17:10.680 --> 0:17:13.040
<v Speaker 1>think infleation will be Yeah, you're probably not all that

0:17:13.440 --> 0:17:16.680
<v Speaker 1>enamored with the bond market. I don't know. So one

0:17:16.760 --> 0:17:20.919
<v Speaker 1>question is what else are you cautious on? And secondly,

0:17:20.920 --> 0:17:22.679
<v Speaker 1>where's the best place to put your money over the

0:17:22.680 --> 0:17:23.120
<v Speaker 1>next year.

0:17:24.240 --> 0:17:26.080
<v Speaker 13>So in terms of the bond market, so we have

0:17:26.160 --> 0:17:29.760
<v Speaker 13>been incrementally adding to government bonds or G seven government

0:17:29.800 --> 0:17:33.760
<v Speaker 13>bonds as rates have continued to trend higher. So we

0:17:33.800 --> 0:17:36.880
<v Speaker 13>are closer to neutral on our duration, our interest rate risk.

0:17:37.480 --> 0:17:39.000
<v Speaker 13>And that really is just the fact that you've got

0:17:39.000 --> 0:17:41.320
<v Speaker 13>a good carry cushion in sovereign bonds now, which we

0:17:41.359 --> 0:17:45.400
<v Speaker 13>didn't have when we're in the zero interest rate policy error.

0:17:46.560 --> 0:17:48.960
<v Speaker 13>Also the fact that we do think it's highly likely

0:17:49.000 --> 0:17:51.280
<v Speaker 13>that we still could get a recession over the next

0:17:51.320 --> 0:17:54.600
<v Speaker 13>say nine months. Sometime there will be the case then

0:17:54.640 --> 0:17:57.000
<v Speaker 13>that you do get a very good, once once in

0:17:57.040 --> 0:18:00.800
<v Speaker 13>a cycle capital gain from long bonds. But we are

0:18:00.880 --> 0:18:04.119
<v Speaker 13>aware of that continued risk around that bear steepening, and

0:18:04.119 --> 0:18:08.000
<v Speaker 13>we'll manage our rates risk tactically. In terms of equities

0:18:08.640 --> 0:18:12.840
<v Speaker 13>we have, we still are underweight, we're neutral Austraine shares

0:18:12.880 --> 0:18:17.480
<v Speaker 13>where underweight global equities, and that is expressed most notably

0:18:17.520 --> 0:18:20.680
<v Speaker 13>through the US In terms of where we see opportunities.

0:18:21.160 --> 0:18:23.080
<v Speaker 13>You know, in a hedge fund macro fund that we

0:18:23.160 --> 0:18:25.680
<v Speaker 13>run internally, we bought commodities a couple of months ago.

0:18:26.160 --> 0:18:30.640
<v Speaker 13>We did the equivalent of a bear steepening. We we're

0:18:30.720 --> 0:18:33.840
<v Speaker 13>very tactical with how we run money, so it's kind

0:18:33.840 --> 0:18:36.840
<v Speaker 13>of working around our strategic ASAD location at the moment

0:18:36.880 --> 0:18:39.840
<v Speaker 13>and really just seeing when we get greater line of

0:18:39.920 --> 0:18:42.520
<v Speaker 13>sight to what's happened in central Bank's inflation and the

0:18:42.560 --> 0:18:46.280
<v Speaker 13>economy before we take any big macro calls through our

0:18:46.480 --> 0:18:48.480
<v Speaker 13>location at this juncture.

0:18:48.760 --> 0:18:51.600
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