WEBVTT - Markets, Currencies, And The Dollar (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.439 called Apple Podcast or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.560 at Bloomberg dot com Slash Podcast. You've gone on this 0:00:22.680 --> 0:00:26.239 roller coaster wide with Elon Musk, with the Twitter CEO 0:00:26.320 --> 0:00:29.000 as well, and really just shareholders trying to figure out 0:00:29.040 --> 0:00:32.120 what exactly is Twitter going to look like? And then 0:00:32.200 --> 0:00:35.680 we get the earnings well, I mean massive emphasis on 0:00:35.720 --> 0:00:38.680 the monetization this time around. H Yeah, and you've gotta 0:00:38.680 --> 0:00:40.440 wonder whether it really matters if it's just going to 0:00:40.479 --> 0:00:44.280 be a private company tomorrow. But there's other companies pretty 0:00:44.520 --> 0:00:47.160 that we'd like to talk to. We're gonna get into 0:00:47.200 --> 0:00:49.519 it now with Lauren Gilbert. She is the CEO of 0:00:49.560 --> 0:00:52.000 wealth Wise Discussing. She's going to discuss how markets are 0:00:52.000 --> 0:00:54.440 going to react to all of these massive, massive earnings. 0:00:54.880 --> 0:00:57.320 You know, as our analysts like to remind us, Twitter 0:00:57.480 --> 0:01:00.640 is just a small company compared to Apple, All and 0:01:00.880 --> 0:01:03.400 Amazon and some of the big numbers we have had, Lorien, 0:01:03.480 --> 0:01:05.920 thank you so much for joining us. When you look 0:01:05.959 --> 0:01:10.959 at the risks that these big big companies Apple, Amazon, Facebook, 0:01:11.680 --> 0:01:13.720 the they're just so big when you look at them 0:01:13.760 --> 0:01:15.560 compared to the rest of the market. So when you're 0:01:15.560 --> 0:01:17.480 looking at the next set of earnings, what are the 0:01:17.480 --> 0:01:21.640 biggest risks to you to not just these companies, but 0:01:21.680 --> 0:01:24.000 the broader markets at large. Right, Well, this is a 0:01:24.040 --> 0:01:28.679 big week for earnings with technology and focus and understanding 0:01:28.760 --> 0:01:31.640 where are these companies heading and get some guidance from 0:01:31.680 --> 0:01:34.440 these companies, and so you know what we're looking at. 0:01:34.600 --> 0:01:37.880 We want to hear from Apple, what are what do 0:01:37.959 --> 0:01:41.400 they see with the consumer. Apple has been very good 0:01:41.440 --> 0:01:46.399 at predicting consumer behavior um predicting how the consumer will 0:01:46.480 --> 0:01:48.680 be able to spend, and we want to hear if 0:01:48.720 --> 0:01:52.559 new products are going to be focused on more affordable 0:01:52.640 --> 0:01:56.040 products or if the consumer they expect will still be 0:01:56.120 --> 0:02:00.000 strong with some of the products that are more expensive. Well, 0:02:00.040 --> 0:02:02.480 so glad you mentioned that consumer behavior beacon, because I 0:02:02.520 --> 0:02:06.560 remember when the markets were trading, the entire market would 0:02:06.640 --> 0:02:09.320 rally or tank on these Apple store closures, which was 0:02:09.400 --> 0:02:12.800 essentially this idea of uh kind of Apple companies and 0:02:12.800 --> 0:02:16.120 these services that they provide for iPhone repairs, that foot 0:02:16.160 --> 0:02:20.160 traffic essentially being almost a proxy for mobility data, which 0:02:20.240 --> 0:02:22.359 is interesting to me. And speaking of that mobility data, 0:02:22.400 --> 0:02:25.560 we're getting uh, not so great mobility data from China 0:02:25.840 --> 0:02:28.880 and this idea that COVID lockdowns in China will have 0:02:29.000 --> 0:02:33.359 ripple effects around the world. How worried shure investors being 0:02:33.360 --> 0:02:35.520 about that. Well, that's a great point. That's another thing 0:02:35.520 --> 0:02:38.160 that we want to hear from companies like Apple. How 0:02:38.160 --> 0:02:43.480 are the lockdowns impacting them as far as um product 0:02:44.280 --> 0:02:48.120 completion as well as shipping, so all of those things 0:02:48.280 --> 0:02:50.919 are very important and how is that going to affect 0:02:51.280 --> 0:02:53.880 these companies going forward? So when we do look at 0:02:53.960 --> 0:02:56.919 risk the risks, there are many risks to look at. 0:02:57.440 --> 0:03:01.640 Um however, if so far in earning season, companies continue 0:03:01.639 --> 0:03:04.600 to be profitable, so, you know, looking to see how 0:03:04.639 --> 0:03:08.079 the companies are able to pass along price increases to 0:03:08.240 --> 0:03:11.560 consumers and who are those price setters. And I think 0:03:11.600 --> 0:03:14.440 that's a very important thing for investors to look at 0:03:14.600 --> 0:03:17.400 when they're deciding which companies to invest in. You know, 0:03:17.440 --> 0:03:20.560 I'm really curious here about what the limit is. One 0:03:20.600 --> 0:03:23.760 person we spoke to is the CEO of Chippotle, for example, 0:03:23.760 --> 0:03:27.160 where prices have increased. They're seeing avocado prices, paper prices, 0:03:27.160 --> 0:03:30.320 all these prices rising, but he's not quite willing to 0:03:30.440 --> 0:03:33.280 raise prices more. And so when you look at the 0:03:33.320 --> 0:03:37.160 next couple of months, how much inslation can consumers really 0:03:37.200 --> 0:03:39.320 take and how much our company is going to have 0:03:39.360 --> 0:03:41.680 to start eating the costs well, and that is the 0:03:41.680 --> 0:03:44.320 big question. And and Chippotle has done a great job 0:03:44.440 --> 0:03:48.440 of continuing to raise prices and maintain profit margins. But 0:03:48.520 --> 0:03:51.560 to your point, how far can they go and how 0:03:51.600 --> 0:03:54.800 far will the consumers allow these companies to go? So 0:03:54.880 --> 0:03:57.760 I think now is when you start seeing us some 0:03:58.000 --> 0:04:00.839 consumers just saying In fact, a recent poll that came 0:04:00.840 --> 0:04:06.480 out said of Americans, we're looking to decrease their expenses 0:04:06.800 --> 0:04:10.240 because of their concerns of inflation, because of the cost 0:04:10.320 --> 0:04:13.640 of goods rising, right, And we're also looking for the 0:04:13.680 --> 0:04:18.520 consumers to be shifting from good spending to services spending. 0:04:18.880 --> 0:04:20.599 And so we do see there. I think there's going 0:04:20.640 --> 0:04:25.200 to be some weakness there on durables as consumers then 0:04:25.279 --> 0:04:29.279 shift over to services and hopefully do some shifting, you know, 0:04:29.360 --> 0:04:32.200 like we're seeing in travel. Yeah, And I got to 0:04:32.240 --> 0:04:35.040 ask here. I mean, we've we've seen all of these 0:04:35.400 --> 0:04:37.920 really just downside moves, a lot of stocks just tanking 0:04:38.480 --> 0:04:41.680 across the board. Where are the dip buyers? Where are 0:04:41.680 --> 0:04:44.040 the what the dip buyers? Dip buyers? You would think 0:04:44.080 --> 0:04:46.400 if it sells off long enough, someone would say, well, 0:04:46.440 --> 0:04:49.200 that's that's a state, right right, right, Well, we've got 0:04:49.279 --> 0:04:52.120 some cash on the sidelines for that very purpose, and 0:04:52.200 --> 0:04:55.360 we don't see capitulation yet, So I think the dip 0:04:55.440 --> 0:04:58.880 buyers are looking for capitulation, which I don't think we've 0:04:58.880 --> 0:05:01.440 seen yet, So I still see some more downside pressure. 0:05:02.040 --> 0:05:05.680 I think for any big bank or asset manager, the 0:05:05.800 --> 0:05:08.839 question is what's the low what's the downside? How do 0:05:08.920 --> 0:05:11.240 you know? And and frankly it's a question for anyone 0:05:11.279 --> 0:05:14.200 who's looking to buy a stock, So how how low 0:05:14.240 --> 0:05:17.400 can it go from here? SMP for example, Well, we've 0:05:17.400 --> 0:05:21.360 already seen a correction, so we're in correction territory. And 0:05:21.800 --> 0:05:24.520 the big question when you're in a correction is are 0:05:24.560 --> 0:05:27.159 you heading into a recession? Because if we are heading 0:05:27.160 --> 0:05:29.839 into a recession, there could be quite a bit more 0:05:29.920 --> 0:05:33.240 downside pressure. However, when we look at a lot of 0:05:33.279 --> 0:05:37.560 the data, including employment, numbers which continue to be very strong, 0:05:37.880 --> 0:05:41.600 and the demand for employers to hire more people. When 0:05:41.640 --> 0:05:44.880 we look at that, we still see the economy being strong. 0:05:44.920 --> 0:05:48.039 When we look at p m I manufacturing numbers still 0:05:48.200 --> 0:05:50.839 very strong. So you know, I think we will see 0:05:50.880 --> 0:05:53.880 some capitulation. Hard to know exactly where that bottom is 0:05:53.920 --> 0:05:56.520 going to be, but we're probably pretty close before we 0:05:56.560 --> 0:06:00.040 start seeing some more rallies. Well, Laureen Gilbert found to 0:06:00.040 --> 0:06:02.280 see a Wealthwise Financial Services joining us right here in 0:06:02.320 --> 0:06:05.240 our interactive broker studio, making the track all the way 0:06:05.360 --> 0:06:12.640 from Dallas, Texas. Let's stick with the market perspective. Because 0:06:12.640 --> 0:06:15.360 we talked about G ten currencies with John Authors, we've 0:06:15.360 --> 0:06:17.039 got to talk about the e M side of things. 0:06:17.040 --> 0:06:20.800 There are so many countries out there who who have 0:06:21.000 --> 0:06:23.320 a whole other set of issues that the average American 0:06:23.680 --> 0:06:27.080 probably can't even fathom. No better person to break it 0:06:27.120 --> 0:06:30.400 all down with then Damien sass Our, chief EM fixed 0:06:30.440 --> 0:06:33.480 income strategist at Bloomberg Intelligence. We just like to call 0:06:33.560 --> 0:06:36.120 him the master of e M over here. But we're 0:06:36.160 --> 0:06:40.120 so good, so good, so good, and and decided to 0:06:41.040 --> 0:06:44.400 come into the office today, which we extra appreciate. Damian. 0:06:44.480 --> 0:06:47.640 Let's start with these Chinese lockdowns, how seriously should we 0:06:47.720 --> 0:06:49.760 be taking them? We need to be taking them seriously. 0:06:49.800 --> 0:06:51.360 I mean, if you look at the mobility data which 0:06:51.360 --> 0:06:54.800 everybody is talking about Shanghai and Ningbao, poor congestion is 0:06:54.880 --> 0:06:57.280 still egregious. And you know, basically if you just look 0:06:57.279 --> 0:07:01.240 at peak traffic in in Shanghai, it's running at lower 0:07:01.240 --> 0:07:03.040 than on a year over year basis. If you look 0:07:03.080 --> 0:07:06.360 at the two major airports in Shanghai, I think capacities 0:07:06.440 --> 0:07:09.360 running up below ten percent. So certainly the lockdowns are 0:07:09.360 --> 0:07:11.960 having an impact. But really the story in China isn't China. 0:07:12.160 --> 0:07:14.440 It's the Japanese yen and the fact that we have 0:07:14.520 --> 0:07:16.600 seen this depreciation of the end and how that's spilling 0:07:16.640 --> 0:07:18.760 over into the broader Asian block. I mean, that is 0:07:18.800 --> 0:07:20.880 really why you see China u on now it's six 0:07:21.080 --> 0:07:23.760 sixty three. Just to put things in perspective, that is 0:07:23.800 --> 0:07:27.520 a thirty big figure move this month alone. We haven't 0:07:27.520 --> 0:07:30.280 seen something like that since, so I think that's got 0:07:30.320 --> 0:07:32.680 a lot of people's attentions. And certainly the Korean juan 0:07:32.760 --> 0:07:35.320 and some mothers are are are are are depreciating as well, 0:07:35.360 --> 0:07:37.320 so you know, it's got a broader impact on Asia 0:07:37.680 --> 0:07:39.520 and that's spilling over into the broader young pop U 0:07:39.920 --> 0:07:42.440 m complex. Do we get a seven handle on the Uan? 0:07:42.640 --> 0:07:44.720 What do you think? I think that's definitely possible. I 0:07:44.760 --> 0:07:46.440 mean we were there just a few years back, right 0:07:46.520 --> 0:07:49.160 during the during you know, the Trump and the trade war. 0:07:49.240 --> 0:07:51.800 But I think you know, for me, it's it's it's 0:07:51.840 --> 0:07:54.040 it's about the near term. And if you look at 0:07:54.040 --> 0:07:57.320 the offshore on shore China Uan basis, we're now running 0:07:57.360 --> 0:08:00.680 it close to four hundred pips. That's like on three 0:08:00.840 --> 0:08:03.320 three and a half standard deviations above the five year average. 0:08:03.440 --> 0:08:05.400 So that just shows the stress. Let's be clear, the 0:08:05.680 --> 0:08:08.840 ento you on has a two percent band on either side, 0:08:08.840 --> 0:08:10.560 so it's kind of managed by the government. It's not 0:08:10.560 --> 0:08:12.560 allowed to move as freely as the offshore you on. 0:08:13.120 --> 0:08:15.080 And so this offshore you on is starting to really 0:08:15.120 --> 0:08:18.640 depreciate aggressively, which is you know, a sign of capital flight. 0:08:19.280 --> 0:08:21.080 So this is why they put me in Cretty together. 0:08:21.080 --> 0:08:22.960 It's the one to punch. She gives you the Macara, 0:08:23.400 --> 0:08:27.000 the trading strategy, so you know, the carry trade. Can 0:08:27.040 --> 0:08:29.200 you explain how this is playing out on Wall Street? 0:08:29.200 --> 0:08:32.400 And really what Critty has kept on outlining here truly 0:08:32.520 --> 0:08:35.640 is a historic moment for markets. Yeah, there are there 0:08:35.679 --> 0:08:38.800 are really three primary factors when you're looking at investing 0:08:38.800 --> 0:08:42.320 in currencies, right, There's there's carry what you mentioned, there's value, 0:08:42.320 --> 0:08:44.679 and there's trend. But the carry element of it has 0:08:44.679 --> 0:08:46.960 been very, very volatile. So anybody who has been investing 0:08:46.960 --> 0:08:50.640 in carry trades the the e M currency volatility has 0:08:50.679 --> 0:08:53.800 made it very very prohibitive to take advantage of that strategy. 0:08:53.840 --> 0:08:57.240 And it's still look am currency volatility is still relatively high. 0:08:57.320 --> 0:09:00.000 I mean, it's not high relative to fixed income equity, 0:09:00.160 --> 0:09:03.240 but it's certainly high relative to d MS. But d 0:09:03.400 --> 0:09:05.160 M f X is now starting to take up higher 0:09:05.200 --> 0:09:07.959 as well, so that may actually make the carry trade 0:09:08.000 --> 0:09:10.440 look a little bit a little bit more attractive. And 0:09:10.480 --> 0:09:13.600 certainly we have resource rich high carry currencies in Latin 0:09:13.600 --> 0:09:17.920 America like Brazil, Chile, Colombia even which which stand out, 0:09:17.920 --> 0:09:19.959 I mean you know that as being perhaps a good 0:09:19.960 --> 0:09:22.560 place to park your money and basically watch the paint dry. 0:09:22.640 --> 0:09:25.839 If if the volatility fits. Translation here, the people who 0:09:25.840 --> 0:09:27.400 have made a lot of money in the first three 0:09:27.440 --> 0:09:29.240 months of the year are about to make a lot 0:09:29.280 --> 0:09:31.920 more money trading currencies in the next two months of 0:09:31.920 --> 0:09:34.479 the year. But you know these do have devastating consequences. 0:09:34.520 --> 0:09:38.160 Let's let's be clear for many emerging markets. Damon, Yeah no, 0:09:38.240 --> 0:09:40.560 I mean, look, you know you can't ignore the currency 0:09:40.600 --> 0:09:43.520 impacted for for years and years now, I mean better 0:09:43.559 --> 0:09:45.680 part of the last decade. If you're a fixed income investor, 0:09:45.800 --> 0:09:48.960 I mean talking not just emerging market fixed income, developed 0:09:48.960 --> 0:09:51.560 market fixed income, you know you really didn't care so 0:09:51.640 --> 0:09:54.560 much about about the currency impact because currency vall was 0:09:54.559 --> 0:09:57.080 was was suppressed, it was low, and you're carrying so 0:09:57.120 --> 0:10:00.520 well with bonds rallying. Now yields your fall a rising 0:10:00.520 --> 0:10:03.080 and bond prices are falling and currency fall is high, 0:10:03.120 --> 0:10:05.400 So you know you need to I mean, if you're 0:10:05.440 --> 0:10:07.640 fixed income investor, you've got to be an f X investor, 0:10:07.640 --> 0:10:10.600 you've gotta look at the currency impact on your returns, 0:10:10.880 --> 0:10:14.240 and it's it's growing in terms of the active contribution 0:10:14.280 --> 0:10:16.520 to total returns. So I mean, yeah, you know, to 0:10:16.559 --> 0:10:18.760 your point, you really have to have a strategy about 0:10:18.800 --> 0:10:20.520 how you're looking at currencies. I mean, I've heard a 0:10:20.520 --> 0:10:23.160 lot of people talking about care. If you're a Japanese 0:10:23.200 --> 0:10:26.480 yet investor, it still makes sense to to carry in 0:10:26.600 --> 0:10:29.920 US treasuries on a hedge basis and all this crazy stuff. Look, 0:10:29.920 --> 0:10:31.840 a lot of that's going by the wayside because the 0:10:31.920 --> 0:10:35.000 cost of funding across borders is going up incrementally as 0:10:35.000 --> 0:10:36.960 we speak, and so I think it makes a lot 0:10:37.000 --> 0:10:39.400 of those strategies a little bit more challenging and a 0:10:39.440 --> 0:10:42.480 little bit more difficult to hold onto. Those interest rate 0:10:42.480 --> 0:10:45.320 differentials are really messing with I think almost every other 0:10:45.440 --> 0:10:48.640 every country in the world right now. As Michael mckeep 0:10:48.640 --> 0:10:51.120 pointed out, the Federal Reserve really can't do anything about 0:10:51.120 --> 0:10:53.640 it right there. This Their job is to focus on 0:10:53.640 --> 0:10:56.320 the American economy, but we have to talk about as 0:10:56.640 --> 0:10:58.880 Chanelie pointed out, the consequences for the e M space, 0:10:58.920 --> 0:11:01.920 the food consequence. I really want to point out record 0:11:02.000 --> 0:11:04.160 high food prices, especially when it comes to the bread 0:11:04.200 --> 0:11:07.040 basket Egypt is something Tom Keane does not stop talking 0:11:07.080 --> 0:11:10.160 about um. But there's other places as well that are 0:11:10.720 --> 0:11:13.840 really going to be feeling the pinch of the food spot. 0:11:14.400 --> 0:11:18.200 The food prices in addition to perhaps some other fears. 0:11:18.200 --> 0:11:21.320 I am F Managing Director Crystallina gorgeva In at the 0:11:21.320 --> 0:11:25.200 I'M of Spring Meetings underscoring the possibility of sovereign debt 0:11:25.280 --> 0:11:28.520 crises in emerging markets? What is the likelihood of that? 0:11:28.679 --> 0:11:30.760 So you're hitting on the nerve here, where will inflation 0:11:30.800 --> 0:11:34.280 peak and how far will growth decline? Effectively, monetary tightening 0:11:34.320 --> 0:11:36.640 is colliding with a it's it's colliding with the cost 0:11:36.720 --> 0:11:39.160 of living crisis, specifically an emerging market. So you're right 0:11:39.200 --> 0:11:41.959 to focus on you know, the Egypts, the Pakistans and 0:11:42.040 --> 0:11:44.280 Nigeria's who are most at risk. I mean, the UN 0:11:44.280 --> 0:11:46.640 International Food Price Index is something is up, something in 0:11:46.640 --> 0:11:50.400 the order of seventy May. But let's talk about the 0:11:50.400 --> 0:11:52.440 countries who are net food exporters, the ones that are 0:11:52.440 --> 0:11:54.880 supposed to benefit. I think that's what isn't really being 0:11:54.880 --> 0:11:58.160 talked about as much. So those countries Brazil, Chile, Thailand 0:11:58.400 --> 0:12:00.320 are probably less at risk than some of the others. 0:12:00.320 --> 0:12:02.040 And I think that's an interesting point that not a 0:12:02.040 --> 0:12:04.880 lot of people are looking at the net food exporters 0:12:04.920 --> 0:12:07.040 and how quite frankly, a lot of their currencies have 0:12:07.080 --> 0:12:11.880 outperformed in amidst the crisis. I have a perhaps fun 0:12:12.000 --> 0:12:14.400 slash not fun question. I know it's a dumb question. 0:12:14.400 --> 0:12:16.640 I'm gonna ask you to you anyway, we have to 0:12:16.640 --> 0:12:18.760 talk about Russia. We we've talked about everything else, we 0:12:18.800 --> 0:12:21.760 got to talk about Russia. It's pretty clear that if 0:12:21.840 --> 0:12:27.040 Russia ever perhaps rejoins uh the previous stage that it was, 0:12:27.080 --> 0:12:29.920 and it might take years before before it does that 0:12:30.200 --> 0:12:33.520 even in the best of circumstances. Does that mean the 0:12:33.640 --> 0:12:37.439 no brainer trade here is to just buy CDs is 0:12:37.520 --> 0:12:39.720 on Russian debt. No, I would not go near that. 0:12:39.800 --> 0:12:41.640 And and look, I mean it's not as a no 0:12:41.760 --> 0:12:43.920 brainer trade because really the credit the fal Simat market 0:12:43.920 --> 0:12:46.520 isn't open to retail investors or really to your average investor. 0:12:46.559 --> 0:12:49.240 It's more of an institutional headers market. But I think, 0:12:49.280 --> 0:12:51.360 you know, just if we're focusing on Russia, we gotta 0:12:51.360 --> 0:12:53.200 look to next week. May fourth is a key day. 0:12:53.920 --> 0:12:56.439 That's when the grace period ends for the six hundred 0:12:56.480 --> 0:13:00.520 and fifty million odd that Russia has paid its creditors roubles, 0:13:00.679 --> 0:13:02.760 which would constitute a default in the eyes of the 0:13:02.840 --> 0:13:05.760 raiding agency. So this could be again, you know, the first, 0:13:05.960 --> 0:13:08.360 uh really the first of fault we've seen on external 0:13:08.400 --> 0:13:10.720 debt from Russia in I mean since the early ten 0:13:10.840 --> 0:13:13.880 nine hundreds. But I think what's also interesting is soon 0:13:13.920 --> 0:13:16.920 thereafter we've got victory Day and that's when Russia prances. 0:13:16.960 --> 0:13:19.600 It's military out there, they parade, they in the streets, 0:13:19.760 --> 0:13:21.520 and a lot of people are thinking that May nine, 0:13:21.600 --> 0:13:24.160 that they're gonna want to deliver something to the Russian populace, 0:13:24.679 --> 0:13:26.679 a victory of some sort, something in Ukraine that you 0:13:26.720 --> 0:13:28.640 can hang your hat on. I think the one thing, 0:13:28.920 --> 0:13:31.120 um you know about the Russia Ukraine War that's kind 0:13:31.120 --> 0:13:33.439 of getting interesting here is you know, Ukraine's got a 0:13:33.480 --> 0:13:36.199 lot of external debt outstanding. They've got GDP warrants and whatnot. 0:13:36.559 --> 0:13:39.000 And if you're now the belief that Ukraine, whether or 0:13:39.040 --> 0:13:41.360 not they come out of this, you know, in whatever 0:13:41.440 --> 0:13:44.120 form they come out of this, the positive goodwill and 0:13:44.160 --> 0:13:46.920 the sentiment behind them, they're gonna have enough in the 0:13:47.000 --> 0:13:49.040 kitty that these bonds are starting to look very very 0:13:49.040 --> 0:13:52.600 attractive from a from a from an investor standpoint. And 0:13:52.640 --> 0:13:54.640 so I think that's an interesting point amidst all of it, 0:13:54.720 --> 0:13:56.599 is that you know, Ukraine, there is a place for 0:13:56.720 --> 0:14:00.040 Ukraine debt and people's portfolios. It's gotten absolutely coabered. You 0:14:00.080 --> 0:14:02.320 look at CDs in Ukraine. I mean, it's just as 0:14:02.360 --> 0:14:04.520 bad as Russia. But I would if I were I 0:14:04.520 --> 0:14:07.680 guess a betting man, I'd probably rather put my money 0:14:07.679 --> 0:14:10.600 in Ukraine CDs. Uh. Well, you know, looking for spreads 0:14:10.679 --> 0:14:14.359 to tighten rather relative to Russia. Yeah, that's less controversial 0:14:14.360 --> 0:14:16.240 of a trade to Yeah. Right, you can answer to 0:14:16.240 --> 0:14:18.679 your fiduciaries a whole hell of a lot more easily. Well, 0:14:18.760 --> 0:14:20.600 let's stick with the Russia theme here and talk about 0:14:20.640 --> 0:14:22.840 the ruble, because there are plenty of headlines that we're 0:14:22.840 --> 0:14:26.720 bringing this back to our worldwide audience here. European buyers, 0:14:26.760 --> 0:14:28.880 some of them paying in rubles, seving, some of them 0:14:28.920 --> 0:14:32.320 refusing to pay in rubles and getting their gas flows halted. Poland, 0:14:32.360 --> 0:14:35.200 Bulgaria come to mind. Is this potentially the start of 0:14:35.240 --> 0:14:38.240 a broader move by Russia to block those flows, that's 0:14:38.240 --> 0:14:40.880 the question. And how much of it is actually helping 0:14:40.920 --> 0:14:43.040 the ruble? Well, let's put a date on it. May fifteen. 0:14:43.160 --> 0:14:45.760 That's when the European gays to gas payments come do, right, 0:14:45.840 --> 0:14:47.840 And that's when we're gonna get real color and clarity 0:14:47.880 --> 0:14:50.360 on how that's handled, specifically by the CE three, the 0:14:50.400 --> 0:14:55.120 Eastern European block like Poland, Romania, Czech Republican, Hungary. I mean, look, 0:14:55.280 --> 0:14:57.880 if you look at the Hungarian Fiens that currency has gotten. 0:14:57.920 --> 0:14:59.320 I mean, they just had two high rates again and 0:14:59.360 --> 0:15:02.040 it's still not doing anything to stem the bleeding on 0:15:02.040 --> 0:15:03.520 on the foreign So I mean, you know, if you 0:15:03.520 --> 0:15:05.600 look at some of these countries, now, let's just be clear, 0:15:05.880 --> 0:15:09.800 Poland has definitively pivoted away from Russia, and you know, 0:15:09.800 --> 0:15:13.200 we're obviously providing all sorts of arms to Ukraine and 0:15:13.320 --> 0:15:16.040 very supportive. Hungry not so much, and so Hungry can't 0:15:16.040 --> 0:15:17.440 get out of its own way, it seems. And it 0:15:17.480 --> 0:15:19.800 seems like a lot of these countries that are kind 0:15:19.800 --> 0:15:22.240 of like Serbia for example, that are kind of signing 0:15:22.240 --> 0:15:24.720 with Russia, are really getting penalized in the capital markets 0:15:24.720 --> 0:15:26.640 because of it. And I don't see that changing anytime soon. 0:15:26.680 --> 0:15:28.800 So that's certainly something that you know, a lot of 0:15:28.840 --> 0:15:31.440 investors are taking advantage of and that we're monitoring very closely. 0:15:32.080 --> 0:15:36.040 Tabian sass Hour as brilliant as promised chief em Fixed 0:15:36.040 --> 0:15:38.480 Income Strategies over Bloomberg Intelligence. We thank you so much. 0:15:38.520 --> 0:15:41.240 I literally think in the span of I'm just looking 0:15:41.240 --> 0:15:43.760 at the clock here, ten minutes, we literally went around 0:15:43.760 --> 0:15:48.760 the world, right, so the world with you, pretty and 0:15:48.840 --> 0:15:50.800 it is most fun to do it. With Damien, who 0:15:50.960 --> 0:15:54.200 somehow knows everything about every detail of every bond being 0:15:54.200 --> 0:15:56.840 traded in the world. And it's really I don't know 0:15:56.840 --> 0:15:58.480 how well you know, guys. He comes in with his 0:15:58.520 --> 0:16:00.560 piece of paper and I've got no it's with yellow 0:16:00.640 --> 0:16:05.040 highlights on highlights ribbles. Let me tell you one time, Shinnali, 0:16:05.600 --> 0:16:07.200 I caught him in the TV set and he's about 0:16:07.200 --> 0:16:08.800 to throw this piece of paper and the recycling and 0:16:08.800 --> 0:16:11.000 I said, no, I want that, and I still have it. Actually, 0:16:11.440 --> 0:16:14.640 the other day Damien pulled up his screen, shared it 0:16:14.680 --> 0:16:17.760 with me and went through all the different Russian bonds. 0:16:18.000 --> 0:16:20.600 If only audience was as lucky as we are to 0:16:20.640 --> 0:16:23.680 get inside access to Damien's mind. We know you are 0:16:23.720 --> 0:16:26.200 a very busy man, Damien, so we will let you go, 0:16:26.360 --> 0:16:29.680 release you of us picking your brains, which will not 0:16:29.720 --> 0:16:36.200 stop anytime. Then. I think the strongest move here is 0:16:36.200 --> 0:16:39.040 going to be in the currency market. Extremely strong dollar, 0:16:39.600 --> 0:16:42.640 a one thirty on dollar. Yet who better to break 0:16:42.680 --> 0:16:45.640 it all down with than Christina Quino, our team leader, 0:16:45.720 --> 0:16:48.040 really the head of our coverage for FX and rates 0:16:48.040 --> 0:16:49.960 based out of London. Christine, thank you so much for 0:16:50.040 --> 0:16:53.720 joining us. How much lower can the Japanese yen fall. 0:16:53.760 --> 0:16:56.960 How much weaker can it get? Well? Pretty I think 0:16:57.080 --> 0:16:59.560 people now are starting to look at one thirty five 0:17:00.160 --> 0:17:02.600 versus the US dollar as the next level to watch. 0:17:02.640 --> 0:17:05.679 But you know, we really looking at a twenty year 0:17:05.800 --> 0:17:08.760 history of of Japan's history of interventions, which there have 0:17:08.880 --> 0:17:13.040 been several I think was the past trigger for end 0:17:13.080 --> 0:17:18.960 weakness that convinced policymakers to jump in and strengthen the currency. 0:17:19.040 --> 0:17:21.080 So that's definitely going to be a key level to 0:17:21.119 --> 0:17:23.399 watch as well. But certainly it seems like there's a 0:17:23.440 --> 0:17:26.199 lot of upper momentums here, probably a lot more end 0:17:26.240 --> 0:17:29.159 weakness to come. I mean, we're also saying weakness in 0:17:29.200 --> 0:17:30.760 the euro here, right one oh five and one. It's 0:17:30.760 --> 0:17:33.840 gonna comes down to the same story, these interest rate differentials, 0:17:33.840 --> 0:17:38.440 an inflationary environment, a hawkish federal reserve. A lot of 0:17:38.480 --> 0:17:41.040 people are calling for parody on the euro dollar. How 0:17:41.080 --> 0:17:43.040 long will it take to get us there? And what 0:17:43.200 --> 0:17:47.120 happens when you get parody? Well, cratty, you know, we 0:17:47.200 --> 0:17:50.320 already have a number of forecasters saying that parody is 0:17:50.359 --> 0:17:53.040 going to come in a matter of months, so potentially 0:17:53.800 --> 0:17:56.760 by the summer months here in the Northern Hemisphere and 0:17:57.080 --> 0:18:01.080 what that actually means in terms of hitting that level 0:18:01.119 --> 0:18:03.280 is it's quite a significant level. Of course, it's it's 0:18:03.320 --> 0:18:06.120 something that we haven't seen in years and years over 0:18:06.160 --> 0:18:09.360 here in in Europe and potentially a very very big 0:18:09.400 --> 0:18:14.040 implications depending on whether you're an exporting company in Germany 0:18:14.160 --> 0:18:18.840 or whether you're an energy importing economy elsewhere in the 0:18:18.920 --> 0:18:21.399 year Zone. You know, because again the level of your 0:18:21.400 --> 0:18:24.680 exchange it really determines how much pricing power, or rather 0:18:24.760 --> 0:18:27.560 how much purchasing power you have internationally. And so if 0:18:27.560 --> 0:18:30.480 you're an exporter, good for you. If you are someone 0:18:30.520 --> 0:18:34.480 who's buying up for instance, energy or supplies or anything 0:18:34.480 --> 0:18:37.480 that kind of counts as intermediate goods, then your costs 0:18:37.520 --> 0:18:40.439 are probably going to be a lot higher. Well, Christina 0:18:40.440 --> 0:18:41.919 and Kane, now I mean I think you hit it 0:18:42.040 --> 0:18:44.959 right on the head ahead of our FS and rate coverage. 0:18:44.960 --> 0:18:47.919 Coming out of the heart of the currency exchanges in London. 0:18:51.760 --> 0:18:53.439 We also have John Authors. I want to pose the 0:18:53.440 --> 0:18:57.520 same questions we pose to Mike to John John Authors 0:18:57.520 --> 0:19:00.640 of Bloomer Opinion. Thank you again for joining us UM. 0:19:00.800 --> 0:19:03.600 One of the things we have to discuss here to 0:19:03.720 --> 0:19:06.520 you specifically is the currency which is not in the end, 0:19:06.720 --> 0:19:09.040 not in these e M currencies down the pound, but 0:19:09.200 --> 0:19:11.840 in the Euro. For our listeners who don't know this, 0:19:12.040 --> 0:19:16.919 John Authors has written several books on the European crisis 0:19:17.160 --> 0:19:21.840 of the last decade. And I'm curious about the parody question. 0:19:21.840 --> 0:19:24.399 We're looking at one or four on euro dollars. Is 0:19:24.440 --> 0:19:28.800 parody realistic? Yes, Its just though it is at the 0:19:28.840 --> 0:19:32.800 moment very startled to be able to say that. But 0:19:33.080 --> 0:19:37.520 the current trajectory, it's quite difficult to see how that 0:19:37.600 --> 0:19:41.280 gets interrupted. It requires the e c B to be, 0:19:42.560 --> 0:19:46.359 you know, to change its approach in a way that 0:19:46.600 --> 0:19:50.960 could be very damaging for its credibility to make quite 0:19:50.960 --> 0:19:53.960 a strong u turn. If if we're not going to 0:19:54.040 --> 0:19:59.439 see the dollar continue to continue to strengthen, if we 0:19:59.520 --> 0:20:02.639 do continue to see the dollars continue to see the 0:20:02.720 --> 0:20:07.320 dollar strengthening, what ramifications does that have globally, especially for 0:20:07.440 --> 0:20:15.280