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Speaker 1: Let's get to our guests. Silash Job, chief economist and

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Speaker 1: head of market research at r HB Banking Group. So

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Speaker 1: there's a tendency to get pretty excited when you see

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Speaker 1: these kind of rallies in the markets. I guess for

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Speaker 1: people who are long and are long suffering through this year. Uh,

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Speaker 1: if they decide to add a little bit here, would

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Speaker 1: you think that add to some of the safety areas

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Speaker 1: that have been working, or would you try to find

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Speaker 1: some of the most bombed out areas and and and

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Speaker 1: target those. So the way it's working, you know, when

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Speaker 1: we look at the price action, and this is a

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Speaker 1: cross asset classes, not just equities, is these kind of

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Speaker 1: moves are very rare. You know, I haven't seen this, uh,

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Speaker 1: you know, for a very very long long time. So

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Speaker 1: my my take on the situation, it's early days. I'm

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Speaker 1: out here in Asia. We're just opening um. And the

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Speaker 1: key point really is that the moves in you know,

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Speaker 1: in bonds and in the equity market are likely, from

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Speaker 1: a balance of risk perspective to be short lived. Uh.

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Speaker 1: You know, the markets reacting to just one data point,

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Speaker 1: and as the cliche goes, one data point doesn't make

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Speaker 1: a turn. However, I do think, you know, as we

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Speaker 1: exit the US standsgiving and we're exiting the FED, things

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Speaker 1: become a little bit clearer. Uh, those would be the

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Speaker 1: times when one could think about more of a Santa

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Speaker 1: Claus rally ensuing towards early part of the next year.

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Speaker 1: You know, some of the GOS oriented sectors, you know,

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Speaker 1: such as the banks, consumers from bouncer risk perspective, could

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Speaker 1: be the places to be um and in terms of technology,

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Speaker 1: depending on the type of companies you're investing in, the

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Speaker 1: bounce of risk from good companies is positive. That's how

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Speaker 1: I think about the world. So perhaps at the moment

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Speaker 1: a bit too good to be true in terms of

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Speaker 1: a true rally. When you mentioned the technology sector there though,

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Speaker 1: that is one place where we're seeing job cuts or

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Speaker 1: job I guess slowdown in terms of hiring. What does

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Speaker 1: that tell us about potential serious labor market pain that

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Speaker 1: could be ahead. Um, it's it's concentrated right now, you know,

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Speaker 1: That's the thing. You hear all the satories about tech.

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Speaker 1: But in terms of the composition of employment in the

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Speaker 1: US economy, tech is a relatively lower number in terms

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Speaker 1: of share um. The overall labor market looks fairly resilient.

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Speaker 1: And that's why when you look at the market pricing overnight,

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Speaker 1: in terms of looking at that, things like the two

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Speaker 1: year yield has come home dramatically, durund four point three

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Speaker 1: percent from high aroun four point eight percent. I don't

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Speaker 1: think we're there yet. I think it's gonna take It's

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Speaker 1: going to take more time. And our view on on

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Speaker 1: interest rate still remains unchanged. On back of our view

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Speaker 1: that growth is likely to remain resilient, no recession coming

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Speaker 1: in the imminent future, supermarket conditions remaining elevated. Bottom line

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Speaker 1: is the FET is still headed from our perspective, the

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Speaker 1: fact to five point to five percent FET funds right

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Speaker 1: um in the next year. Even with that cautious stance,

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Speaker 1: could you maybe see some rebalancing away from energy into

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Speaker 1: some of the other areas that have been hit hard. Yeah,

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Speaker 1: so we've been short oil, you know, from a pure

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Speaker 1: oil perspective and not in terms of equities. But yes,

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Speaker 1: you know, as we continue this ZUO prices come down.

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Speaker 1: You know, energy has been the leader, you know, for

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Speaker 1: the better part of this year, and the balance of

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Speaker 1: risk is that the shift of assis allocation goes more

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Speaker 1: towards the banks and consumer And we should just mention

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Speaker 1: that President Biden has just said it's going to take

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Speaker 1: some time to get inflation to normal levels, which I

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Speaker 1: guess is something that we already know. Let's talk about

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Speaker 1: the China story about their exit here in terms of

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Speaker 1: some calls that perhaps there will be a more targeted

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Speaker 1: path out of these COVID zero controls, but you do

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Speaker 1: have cases of course rising quite sharply, and does it

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Speaker 1: take at least a year, as analysts is saying for

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Speaker 1: the economy to kind of really get back on track here.

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Speaker 1: So our view has been consistent all along for the

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Speaker 1: last two years, and that has been that China is

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Speaker 1: in a structural slowdown. And now basically the complication for

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Speaker 1: policy makers on shore in China is that the cyclical

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Speaker 1: the cycle is turning as well. So I don't think

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Speaker 1: basically for us that the trouble in China is over. Um.

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Speaker 1: They are basically now around a three to four percent

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Speaker 1: trying to grow to economy. The real numbers in China

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Speaker 1: are you know, probably a hundred fifty two hundred basis

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Speaker 1: points below that. So you know our forecast this year

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Speaker 1: three percent, they're probably growing at like around one and

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Speaker 1: a half percent. The next year at four percent, so

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Speaker 1: they're probably going realistically at two and a half percent.

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Speaker 1: That's kind of realistically what we should think about the

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Speaker 1: Chinese economy over the next several years. Cautious in in

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Speaker 1: your outlook, what would be your most confident and aggressive

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Speaker 1: call in the investment arena? The most I would say

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Speaker 1: the aggressive one would be long dollar c NH on

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Speaker 1: back of are not cautious that I have to correctly,

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Speaker 1: I'm sorry, Parish with lunch China. So we're basically looking

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Speaker 1: to buy you know, a dollar China and depths specifically

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Speaker 1: dollars n H. That's our top conviction idea and for

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Speaker 1: an exchange um in In fixed income, we are continuing

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Speaker 1: to look to put on trades in terms of long

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Speaker 1: duration bonds, local currency government bonds in the US, southcac

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Speaker 1: Asia and in the US. We're positive le client towards

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Speaker 1: US equities on depth. So we've been, uh, you know,

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Speaker 1: had that position coming into this quarter and that's working

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Speaker 1: quite nicely for US Short emerging markets as well. What

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Speaker 1: a specific markets are you looking at here? You mentioned, yeah,

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Speaker 1: so short emerging markets for US would include the Gamut,

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Speaker 1: you know, the places like China and places that are

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Speaker 1: trading with China. There's a little bit of disconnect like

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Speaker 1: our Korea and Taiwan. Korea is disconnected, but Taiwan would

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Speaker 1: be included, uh, in that in that in that camp,

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Speaker 1: and you know, a bouncer risk perspective. As oil continues

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Speaker 1: to come down into first half of next year, that

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Speaker 1: should also hit the stock markets of the leaves. From

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Speaker 1: a bouncer risk perspective, that's where we would think you

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Speaker 1: and all the other like commodity producing regions. Brazil has

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Speaker 1: done really well right that year to date, um, and

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Speaker 1: so we'd be from a bouncer risk perspective thinking to

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Speaker 1: include that short in the e M. I'm just looking

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Speaker 1: at the opening numbers for the Hansing Index up more

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Speaker 1: than a thousand points and the Hansing Tech Index up

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Speaker 1: a whopping ten percent for an index your barish on China.

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Speaker 1: So emerging markets should be barished there and you're shorting them.

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Speaker 1: I'm curious what you think our investors tired of leadership

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Speaker 1: from China for emerging markets. Will that leadership switched to

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Speaker 1: someone else, perhaps like India. Well, yeah, that's the point.

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Speaker 1: So emerging markets, you know, are fairly heterogeneous as you know,

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Speaker 1: better than I it um. And yes, we like when

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Speaker 1: we think about exiting China or selling China on any rallies,

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Speaker 1: we're thinking about essentially adding to India position. Again, we've

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Speaker 1: had on for the entire of this UH this year

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Speaker 1: and that's worked for us quite quite nicely being India

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Speaker 1: being one of the top forming stock markets in the

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Speaker 1: m alright, always a pleasure. Thanks so much, Silas, enjoy

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Speaker 1: your weekend as well. Salis shot Is too economist and

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Speaker 1: head of market research r HB Banking Group, on the

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Speaker 1: line from Kuala Lumpo for us here on Bloomberg Daybreak

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Speaker 1: Asia