WEBVTT - Traders Weigh US Shutdown Risks, Gaza Peace Proposal

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Doug Krisner. On Monday,

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<v Speaker 2>in the US, President Trump and Israeli Prime Minister Netanyahu

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<v Speaker 2>said they agreed to a twenty point plan designed to

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<v Speaker 2>end the war in Gaza. Now, this plan stipulates that

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<v Speaker 2>the conflict would end immediately if accepted by both Israel

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<v Speaker 2>and Hamas. Here's President Trump.

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<v Speaker 3>Working with the new transitional authority in Gaza. All parties

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<v Speaker 3>will agree on a timeline for Israeli forces to withdraw

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<v Speaker 3>in phases. Will be withdrawing in phasis, no more shooting. Hopefully,

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<v Speaker 3>as progress is made toward achieving these goals, Arab and

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<v Speaker 3>Muslim nations need to be allowed the chance to fulfill

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<v Speaker 3>these commitments of dealing with hamas they have to deal

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<v Speaker 3>with them.

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<v Speaker 2>In a moment, we'll get some analysis on this plan

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<v Speaker 2>from Kirsten Fontenrow of Red six International. But let's begin

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<v Speaker 2>in the States and the threat of a government shutdown.

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<v Speaker 2>Congressional leaders showed no signs of progress toward a deal

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<v Speaker 2>on a short term spending bill that after a meeting

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<v Speaker 2>late Monday with President Trump. So government funding is set

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<v Speaker 2>to expire at twelve oh one am on Wednesday, unless

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<v Speaker 2>Congress passes a short term spending bill. For a closer

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<v Speaker 2>look now at what a potential shutdown means for markets,

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<v Speaker 2>I'm joined by Bill Campbell. He is Global bond portfolio

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<v Speaker 2>manager at Double Line. Bill, thank you so much for

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<v Speaker 2>making time to chat with me. I'd like to start

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<v Speaker 2>if we can with the government shutdown that seems imminent

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<v Speaker 2>here in the United States. We have government funding set

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<v Speaker 2>to expire at twelve oh one am Wednesday, unless Congress

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<v Speaker 2>passes a short term spending bill. I saw yields come

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<v Speaker 2>in a little bit today, more so at the long end.

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<v Speaker 2>Is the bond market sensing a little bit of risk here?

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<v Speaker 4>Do you think?

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<v Speaker 5>Well? I think that.

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<v Speaker 4>We're all watching with anticipate, patient to see if we

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<v Speaker 4>can get a short term continuing resolution passed. I think

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<v Speaker 4>that the real question here. In the past, we have

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<v Speaker 4>seen eleventh hour deals, We've seen relatively short government shutdowns,

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<v Speaker 4>but they've come at times maybe when we haven't had

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<v Speaker 4>such large budget deficits or.

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<v Speaker 5>Debt to GDP issues.

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<v Speaker 4>My biggest concern, despite the move today, where you're going

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<v Speaker 4>to get an initial if we get a shutdown, I

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<v Speaker 4>think you might get an initial flight to safety response,

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<v Speaker 4>but the duration of this shutdown needs to be watched closely,

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<v Speaker 4>and if it extends through through this week out a

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<v Speaker 4>couple of weeks, I think there are going to be

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<v Speaker 4>some real questions that investors are going to have in

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<v Speaker 4>their minds about, you know, the quality of policymaking in

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<v Speaker 4>the United States. More specifically, there's going to be a

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<v Speaker 4>delay in the employment report, which obviously is key right

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<v Speaker 4>now to markets to focus on for a downshift in

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<v Speaker 4>the labor market. But one item that I'm catching on

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<v Speaker 4>that that's on my radar for you know, the government

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<v Speaker 4>shutdown risk is a delay potentially in the CPI numbers.

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<v Speaker 4>And obviously inflation is the other important component for the FED,

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<v Speaker 4>but for the tips market, if we don't get the

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<v Speaker 4>September inflation numbers in time, there's a technical procedure whereby

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<v Speaker 4>we would look at the last inflation print, annualize the

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<v Speaker 4>growth rate, and use that for pricing out and paying

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<v Speaker 4>the inflation component of you know, the tips payout. But

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<v Speaker 4>I feel that this is going to raise concerns about

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<v Speaker 4>the outlook for policymaking in general and bring eyes back

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<v Speaker 4>to one the trajectory of US fiscal policy, and two,

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<v Speaker 4>the trajectory of the pressure that's being put on the

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<v Speaker 4>FED around monetary policy, and do they have the appropriate

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<v Speaker 4>data to be navigating what is now becoming a much

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<v Speaker 4>more difficult decision on how much to lower interest rates.

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<v Speaker 2>We heard today from the head of the New York Fed,

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<v Speaker 2>John Williams. He was saying inflation risk have receded while

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<v Speaker 2>those for employment have moved up, and he said the

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<v Speaker 2>risk to employment and inflation are kind of more aligned,

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<v Speaker 2>or at least closer together, and therefore it's sensible now

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<v Speaker 2>to lower interest rates. Do you think he's underestimating the

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<v Speaker 2>potential for inflation in that statement.

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<v Speaker 4>Well, I think there is a diverse view of opinion,

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<v Speaker 4>And when you look at Governor Hammick, she said almost

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<v Speaker 4>the opposite, that inflation has missed to the upside for

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<v Speaker 4>the past four and a half years, and in her

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<v Speaker 4>modeling she thinks inflation could continue to be above the

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<v Speaker 4>Fed's two percent inflation target out to twenty twenty eight.

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<v Speaker 4>So I think that there is a lot What I

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<v Speaker 4>can say is there's a lot of uncertainty about the

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<v Speaker 4>outlook for inflation that has gone up. We've obviously gone

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<v Speaker 4>through the inflation spike we had a couple of years ago,

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<v Speaker 4>and now we have the unknown impacts due to tariffs

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<v Speaker 4>and changing trade policy that makes the outlook more unclear.

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<v Speaker 4>So when the outlook's unclear, we need more data, and

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<v Speaker 4>we need real time data in order to be able

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<v Speaker 4>to make the right decisions, and the Fed obviously needs

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<v Speaker 4>that data as well. It's my concern that if we

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<v Speaker 4>decide that the government is going to be shut down

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<v Speaker 4>for an extended period of time this time around, that

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<v Speaker 4>might actually, after the initial concerns that it could slow

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<v Speaker 4>growth maybe on the margin that helped yields rally just

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<v Speaker 4>a little bit today, that could actually build term premium

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<v Speaker 4>back up in the long end of the curve. So

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<v Speaker 4>those concerns that we don't have the data that we

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<v Speaker 4>need and that there's more uncertainty rising about the outlook

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<v Speaker 4>for inflation, I think that has the risk of keeping

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<v Speaker 4>longer and yields elevated. Which despite the rally that we've

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<v Speaker 4>seen over the past month, if you look at the

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<v Speaker 4>long bond, it's still up just under five percent around

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<v Speaker 4>four seventy, But the likelihood that it stays at the

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<v Speaker 4>upper end of its range or pushes higher over the

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<v Speaker 4>next couple of quarters is a big risk, and I

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<v Speaker 4>think is only complicated by these issues that we're facing today,

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<v Speaker 4>both on inflation uncertainty and where the US fiscal trajectory is.

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<v Speaker 2>Going day with the inflation point for a moment or

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<v Speaker 2>two last week at the end of the week, we

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<v Speaker 2>had a pretty tame reading on core personal consumption expenditures,

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<v Speaker 2>which obviously is the Fed's preferred measure of inflation. We

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<v Speaker 2>have a Bloomberg big Take piece today talking about AI

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<v Speaker 2>data centers are sending power bills soaring. Wholesale electricity cost

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<v Speaker 2>are as much as two hundred and sixty seven percent

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<v Speaker 2>greater than they were five years ago in areas where

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<v Speaker 2>we're finding these data centers being constructed and those costs

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<v Speaker 2>now are being passed on to consumers and I would

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<v Speaker 2>imagine businesses in those jurisdictions. Is there a lot more

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<v Speaker 2>about the inflation story that we have really yet to

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<v Speaker 2>grapple with. And then, kind of as another point, you

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<v Speaker 2>were talking about yields backing up at the long end,

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<v Speaker 2>and I'm wondering whether we could get to four and

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<v Speaker 2>a half on the ten year in no time.

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<v Speaker 4>Yeah, So let's take those in the order that you

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<v Speaker 4>presented them. On the inflation side, one of the surprising

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<v Speaker 4>elements I think is that services inflation has remained relatively

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<v Speaker 4>sticky and continues to do so. I think that on

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<v Speaker 4>the good side, we have seen fairly moderate goods inflation.

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<v Speaker 4>But I would caution that I think the tariff passed

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<v Speaker 4>through story was initially anticipated to be a quick, one

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<v Speaker 4>off spike, a one off adjustment that then would be

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<v Speaker 4>corrected quickly. In fact, when we look at the Fed's

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<v Speaker 4>Beige Book, we see that many companies are talking about

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<v Speaker 4>the inability to raise prices too quickly, but the intention

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<v Speaker 4>to raise prices over the course of the next twelve months.

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<v Speaker 4>So I think that with sticky services inflation and the

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<v Speaker 4>potential that we could have a steady rise in goods inflation.

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<v Speaker 4>And then if we have any type of exogenous event,

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<v Speaker 4>like you point to an energy spike, whether due to

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<v Speaker 4>the data centers, a geopolitical event, or something that we're

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<v Speaker 4>just not anticipating, all of those present real risks to

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<v Speaker 4>inflation moving higher. I think that given markets trade on uncertainty, right,

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<v Speaker 4>so we both have point estimates, but we put a

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<v Speaker 4>band around those point estimates based on how confident we are,

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<v Speaker 4>and compared to the last two decades, I think one

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<v Speaker 4>thing we can easily say is those confidence bands have widened,

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<v Speaker 4>and I think that that demands an extra premium in

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<v Speaker 4>and of itself, and it's going to continue to demand

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<v Speaker 4>an extra premium. So it's my belief that we are

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<v Speaker 4>going to see over time in upward pressure on interest rates.

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<v Speaker 4>Whether we're going to see that the tenure hit four

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<v Speaker 4>fifty in the next week or so, you know, I

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<v Speaker 4>think that that is anybody's guess. Whether we in a

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<v Speaker 4>in a cycle where the FED is likely, you know,

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<v Speaker 4>cutting at twenty five basis point clips and maybe slowing

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<v Speaker 4>the pace after this year is over, that we have

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<v Speaker 4>a backup to four p fifty on the tenure, I

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<v Speaker 4>think is highly likely and highly probable.

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<v Speaker 2>I was struck by a story in the Wall Street

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<v Speaker 2>Journal recently about how Microsoft has lower borrowing costs than

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<v Speaker 2>the US government. We're talking about corporate bronze rated triple A.

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<v Speaker 2>Is that where you're focused right now and looking for

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<v Speaker 2>opportunities in the credit space.

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<v Speaker 4>Well, interestingly enough, yes, we are looking at you know,

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<v Speaker 4>shorter dated credit, you know, in higher quality credit. We

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<v Speaker 4>find we're finding some opportunities in the corporate sector. We

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<v Speaker 4>also are finding a lot of opportunities in the structured

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<v Speaker 4>product sector where we can get short duration assets with

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<v Speaker 4>higher yields somewhat in some cases significantly higher. Then you

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<v Speaker 4>get on the US Treasury bond market, and then you

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<v Speaker 4>get your cash returned to you over the course of

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<v Speaker 4>the next year or two. But one of the more

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<v Speaker 4>interesting plays for those who have a little bit who

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<v Speaker 4>have capacity to take a little bit more risk, is

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<v Speaker 4>we've been allocating to non dollar fixed income assets, more

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<v Speaker 4>specifically emerging market local currency bonds, and the idea there

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<v Speaker 4>is that we're having several factors that have both caused

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<v Speaker 4>the dollar to devalue this year and are likely to

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<v Speaker 4>keep pressure on the dollar going forward, and with a

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<v Speaker 4>FED cutting into not what is a recession and not

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<v Speaker 4>what is a current economic emergency, that likely is going

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<v Speaker 4>to extend the near term economic runway. We think that

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<v Speaker 4>the one sector in the global fixed income market that's

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<v Speaker 4>been under allocated to, you know, has been em local

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<v Speaker 4>fixed income and in many cases we're picking up high

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<v Speaker 4>single to load double digit yields and we're getting currency

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<v Speaker 4>appreciation on the back of it, so we're blending. It

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<v Speaker 4>depends on the specific strategy, but we're trying to blend

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<v Speaker 4>shorter duration where we're investing between the front end to

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<v Speaker 4>the belly and the treasury market, shorter duration, high quality credit,

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<v Speaker 4>and then we're adding, you know, in the strategies that

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<v Speaker 4>can take a little bit more risk the em local trade.

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<v Speaker 2>I'm wondering whether or not there's a conversation at double

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<v Speaker 2>line that has to do with a potential pullback in

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<v Speaker 2>the equity market and how money may get moved from

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<v Speaker 2>stocks into the bond space, and maybe you could see

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<v Speaker 2>some opportunity is for short term capital gains in certain

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<v Speaker 2>parts of the bond market. Is that something that you

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<v Speaker 2>guys are talking about.

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<v Speaker 4>I think that if you had a short a larger correction,

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<v Speaker 4>near term correction in the equity market, I think the

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<v Speaker 4>front end of the yield curve would respond, the front

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<v Speaker 4>end to the belly of the yield curve would respond

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<v Speaker 4>more than the long end. My concern is that, similar

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<v Speaker 4>to what we saw after Liberation Day, I think that

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<v Speaker 4>many international investors are watching very carefully their exposures to

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<v Speaker 4>the US, and I'm thinking that it's more likely that

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<v Speaker 4>if you get a equity correction in the US, some

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<v Speaker 4>of that money right now, it stands at about sixty

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<v Speaker 4>trillion of foreign savings that sits in the US could

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<v Speaker 4>get repatriated out of US markets back into home markets internationally.

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<v Speaker 4>I think that that would, you know, support a little

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<v Speaker 4>bit of a lower dollar trade, which is different than

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<v Speaker 4>what we've seen in equity corrections prior to this year,

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<v Speaker 4>but it is in line with what we've seen with

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<v Speaker 4>the equity correction around Liberation Day or at the beginning

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<v Speaker 4>of this Trump administration. So I think that we still

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<v Speaker 4>remain cautious even in that scenario of flight to quality

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<v Speaker 4>on the long end of the curve. We think that

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<v Speaker 4>fiscal issues and inflation uncertainty and this over owning by

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<v Speaker 4>the international community that may have an itchy trigger finger

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<v Speaker 4>keep risks on the long end of the yield curve

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<v Speaker 4>out more towards the thirty year sector. But the front

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<v Speaker 4>end of the belly still will have those risk aversion

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<v Speaker 4>flight to safety qualities. But this time around high quality

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<v Speaker 4>fixed income assets internationally, you know, may have the ben

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<v Speaker 4>fit that the dollar may not go up in this

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<v Speaker 4>next equity correction but may actually go down.

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<v Speaker 2>Bill will leave it there. It's always a pleasure, thank you,

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<v Speaker 2>So very much a Bill Campbell there. He is Global

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<v Speaker 2>bond portfolio manager at Double Line. Joining us here on

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<v Speaker 2>the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.

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<v Speaker 2>I'm deg Prisner. On Monday, President Trump unveiled a plan

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<v Speaker 2>for a ceasefire in Gaza. It was framed as a

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<v Speaker 2>landmark deal to bring peace after two years of catastrophic violence.

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<v Speaker 2>Standing alongside Israeli Prime Minister Neknyahoo, Trump unveiled a proposal

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<v Speaker 2>which both men had agreed to and if it's agreed

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<v Speaker 2>to by Israel and Hamas, this proposal would end war

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<v Speaker 2>in Gaza and free the remaining hostages. For more, we

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<v Speaker 2>heard from Kirsten Fontenrose, president of Red six International. She

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<v Speaker 2>spoke with Bloomberg TV host Sherry On in April on

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<v Speaker 2>the Asia trade.

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<v Speaker 5>I think we should expect Hamas to be spoilers. Initially.

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<v Speaker 5>They tend to follow a playbook.

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<v Speaker 6>Where they will participate in negotiations and then put new

0:16:09.960 --> 0:16:12.760
<v Speaker 6>demands on the table right before this is final. But

0:16:12.840 --> 0:16:15.360
<v Speaker 6>in this case, they're seeing a unified voice from the

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<v Speaker 6>Arab States, which is a little bit surprising and really impressive,

0:16:18.800 --> 0:16:22.400
<v Speaker 6>that will pressure them to accept these conditions, accept as plan,

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<v Speaker 6>so it'll be more pressure than they've seen previously. I

0:16:25.600 --> 0:16:28.320
<v Speaker 6>think they'll also listen to President Trump's words saying that

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<v Speaker 6>if they do not agree to this plan that has

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<v Speaker 6>received eight Arab and Muslim states input as well as

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<v Speaker 6>Israel's input, that if the plan falls apart because of

0:16:37.720 --> 0:16:42.480
<v Speaker 6>their non compliance, then Israel would have his full backing

0:16:42.560 --> 0:16:45.800
<v Speaker 6>to finish the job of destroying the threat of Hamas

0:16:45.840 --> 0:16:48.880
<v Speaker 6>inside Gaza. So they will be thinking about taking that

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<v Speaker 6>seriously about what an unleashed Israeli defense forces with no

0:16:53.720 --> 0:16:55.960
<v Speaker 6>US reigning the men would look like if they chose

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<v Speaker 6>to say no to this one chance for the war

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<v Speaker 6>to stop immediately.

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<v Speaker 7>It does seem quite a positive development as you raise

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<v Speaker 7>that you're seeing that unity among Gulf states in backing

0:17:08.600 --> 0:17:11.359
<v Speaker 7>this plan. How do you see the role of the

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<v Speaker 7>Qataris in a potential implementation as crucial to this plan

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<v Speaker 7>actually walking out?

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<v Speaker 5>They will be crucial as well.

0:17:20.160 --> 0:17:22.919
<v Speaker 6>Frankly every other state that was involved in this conversation,

0:17:23.040 --> 0:17:26.280
<v Speaker 6>perhaps with the omission of one or two. But remember

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<v Speaker 6>you saw eight Arab and Muslim states here, So Kada

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<v Speaker 6>will be critical in bringing Hamas around to this, and

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<v Speaker 6>Kada will be going to them with a message saying

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<v Speaker 6>We're not here to get your demands anymore.

0:17:35.880 --> 0:17:38.040
<v Speaker 5>We're not here to go back and forth. This is

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<v Speaker 5>on the table.

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<v Speaker 6>All the Arab states are aligned, and plus Turkey, plus

0:17:41.480 --> 0:17:44.960
<v Speaker 6>Indonesia plus Pakistan, you literally don't have anyone who is

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<v Speaker 6>going to have your back in negotiations should you choose

0:17:47.560 --> 0:17:49.959
<v Speaker 6>to turn this down. So Kada will be delivering a

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<v Speaker 6>tough message. But then you have Indonesians offering to send troops.

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<v Speaker 6>You have several states that will be called to provide training,

0:17:56.359 --> 0:17:59.919
<v Speaker 6>like Egypt and Jordan for Palestinian police forces. You'll have

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<v Speaker 6>funding for redevelopment coming from other parts of the Golf.

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<v Speaker 5>So each one of these states is playing a role.

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<v Speaker 1>You know, it was interesting how President Trump set up

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<v Speaker 1>that phone call between Prime Minister Nadanahu and the Katari

0:18:12.480 --> 0:18:15.320
<v Speaker 1>Prime minister, given of course, that attack on Doha that

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<v Speaker 1>did not sit well for the Middle Eastern state. But

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<v Speaker 1>what do we think about the increasing isolation of Israel

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<v Speaker 1>despite the fact that Hamas may be backed into a

0:18:26.640 --> 0:18:30.959
<v Speaker 1>corner because of this cooperation and understanding between Golf states

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<v Speaker 1>and the plan that President Trump has in place, the

0:18:33.680 --> 0:18:37.040
<v Speaker 1>fact that Israel continues to be isolated on the international

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<v Speaker 1>stage and is receiving a lot of criticism. Will they

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<v Speaker 1>have the bandwidth to go against Hamas if this seal

0:18:43.200 --> 0:18:45.520
<v Speaker 1>is rejected, They would.

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<v Speaker 5>Have the bandwidth militarily, but would they have the bandwidth

0:18:47.760 --> 0:18:49.919
<v Speaker 5>in terms of international goodwill? Likely not.

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<v Speaker 6>This may be doing Prime Minister Natanyahu a little bit

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<v Speaker 6>of a favor because while he is the face of

0:18:56.480 --> 0:18:59.680
<v Speaker 6>this policy, a lot of the preference for a hard

0:18:59.720 --> 0:19:03.560
<v Speaker 6>line military operation are coming from right wing factions within

0:19:03.600 --> 0:19:07.480
<v Speaker 6>his government, and this insistence by a unified Arab and

0:19:07.560 --> 0:19:11.160
<v Speaker 6>Muslim world, and by the US government and by European

0:19:11.280 --> 0:19:15.000
<v Speaker 6>states as well, may give Bbe the power to turn

0:19:15.040 --> 0:19:17.159
<v Speaker 6>to some of those factions and say we're in a

0:19:17.200 --> 0:19:18.399
<v Speaker 6>corner now as well.

0:19:18.440 --> 0:19:19.399
<v Speaker 5>We don't have a choice.

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<v Speaker 6>This is an all or nothing offer, and if we

0:19:21.880 --> 0:19:26.919
<v Speaker 6>say no to President Trump's personal invitation to be a

0:19:26.960 --> 0:19:29.560
<v Speaker 6>part of this peace board he wants to set up,

0:19:30.200 --> 0:19:32.439
<v Speaker 6>we may not get another chance from the US that

0:19:32.480 --> 0:19:33.359
<v Speaker 6>will be in our favor.

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<v Speaker 1>The terms of this plan also reference of future where

0:19:39.000 --> 0:19:42.680
<v Speaker 1>the conditions for policy and state could finally be in place.

0:19:43.080 --> 0:19:45.399
<v Speaker 1>Do you see this as a potential ground work for

0:19:46.000 --> 0:19:47.000
<v Speaker 1>broader me these.

0:19:46.880 --> 0:19:50.120
<v Speaker 6>Peace It could, but Honestly, there's still quite a bit

0:19:50.160 --> 0:19:50.840
<v Speaker 6>to be worked out.

0:19:50.880 --> 0:19:51.600
<v Speaker 5>Specifically.

0:19:51.720 --> 0:19:55.760
<v Speaker 6>On that note, the plan put forward by President Trump.

0:19:55.440 --> 0:19:57.280
<v Speaker 5>Does not use the phrase two states.

0:19:57.320 --> 0:20:00.600
<v Speaker 6>It says that the new Peace Board will oversee development

0:20:00.640 --> 0:20:04.119
<v Speaker 6>in Gaza until the Palestinian Authority is reformed and can

0:20:04.160 --> 0:20:05.800
<v Speaker 6>take back control of Gaza.

0:20:06.160 --> 0:20:07.879
<v Speaker 5>Does not mention a Palestinian state.

0:20:08.400 --> 0:20:10.359
<v Speaker 6>Then you have the joint statement from the Arab and

0:20:10.440 --> 0:20:12.520
<v Speaker 6>Muslim states, who are briefed on the plan and will

0:20:12.520 --> 0:20:15.560
<v Speaker 6>be central to it, calling for governance to eventually be

0:20:15.640 --> 0:20:19.760
<v Speaker 6>handed over to a then reformed Palestinian authority that would

0:20:19.760 --> 0:20:23.639
<v Speaker 6>administer an integrated Palestinian state of both Gaza.

0:20:23.520 --> 0:20:24.479
<v Speaker 5>And the West Bank.

0:20:24.800 --> 0:20:27.440
<v Speaker 6>And then you have Israel saying it does not see

0:20:27.440 --> 0:20:30.879
<v Speaker 6>a role for the Palestinian authority because, to their point,

0:20:31.480 --> 0:20:33.960
<v Speaker 6>Palestinian authority has had thirty years to prove it can

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<v Speaker 6>govern and has failed to do so and has been

0:20:36.520 --> 0:20:40.480
<v Speaker 6>rife with corruption. So you have similar generic language saying

0:20:40.480 --> 0:20:45.080
<v Speaker 6>we're looking toward Palestinian control of at least Gaza.

0:20:45.359 --> 0:20:47.639
<v Speaker 5>But you have three different framings right now.

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<v Speaker 6>It seems like each party has said we're okay with

0:20:51.080 --> 0:20:52.840
<v Speaker 6>that for the moment, because we really.

0:20:52.600 --> 0:20:54.280
<v Speaker 5>Just need to get this approved.

0:20:54.560 --> 0:20:56.760
<v Speaker 6>We need to get this across the line so that

0:20:56.800 --> 0:20:59.720
<v Speaker 6>the war itself can stop and we can have a partialist,

0:20:59.800 --> 0:21:03.320
<v Speaker 6>real withdrawal and return of hostages. They're not as concerned

0:21:03.320 --> 0:21:05.880
<v Speaker 6>about exactly what that means right now. They're talking about

0:21:05.920 --> 0:21:10.000
<v Speaker 6>pathways to two states, they're talking about reformation of the PA.

0:21:10.119 --> 0:21:15.040
<v Speaker 6>Those are long term eventualities. So right now the emphasis is,

0:21:15.320 --> 0:21:17.479
<v Speaker 6>let's come up with language we all agree on so

0:21:17.520 --> 0:21:18.480
<v Speaker 6>we can begin.

0:21:20.400 --> 0:21:24.240
<v Speaker 7>And potentially make some hidway on this. It could also

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<v Speaker 7>mean Trump's role as a peace broker gets bolstered. But

0:21:30.400 --> 0:21:33.840
<v Speaker 7>to your point and Sherry's point earlier about how Israel

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<v Speaker 7>doesn't seem quite bald as a stage about how it

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<v Speaker 7>is being isolated in the international community, how do you

0:21:41.119 --> 0:21:45.320
<v Speaker 7>see Trump potentially exerting pressure on Nitan Yahuo if things

0:21:45.320 --> 0:21:47.680
<v Speaker 7>don't pan out well.

0:21:47.720 --> 0:21:50.960
<v Speaker 6>I think him offering to pose himself as the chair

0:21:51.000 --> 0:21:53.680
<v Speaker 6>of a peace board, which is really uncommon for a

0:21:53.760 --> 0:21:56.080
<v Speaker 6>president of a large nation to offer to put that

0:21:56.200 --> 0:22:00.240
<v Speaker 6>kind of time and effort into a single individual world issue.

0:22:00.480 --> 0:22:03.760
<v Speaker 6>They almost can't say no because if they say no

0:22:03.840 --> 0:22:06.080
<v Speaker 6>to that, and the President says, then we're done paying attention.

0:22:06.480 --> 0:22:10.760
<v Speaker 6>You're on your own Israel will be fighting, perhaps not

0:22:11.040 --> 0:22:13.399
<v Speaker 6>a war on the ground against all the Arab states,

0:22:13.440 --> 0:22:15.560
<v Speaker 6>not that no one wants, none of them want that,

0:22:15.960 --> 0:22:18.000
<v Speaker 6>but a unified voice of the Arab states that would

0:22:18.000 --> 0:22:19.640
<v Speaker 6>be in Washington, would be in Europe.

0:22:19.800 --> 0:22:21.600
<v Speaker 5>They haven't had to face that before, and I don't

0:22:21.640 --> 0:22:23.400
<v Speaker 5>think they relish the idea of that.

0:22:24.240 --> 0:22:26.439
<v Speaker 6>And that strike in Doha that you referenced earlier is

0:22:26.480 --> 0:22:29.399
<v Speaker 6>exactly what finally brought all these voices that often come

0:22:29.440 --> 0:22:33.160
<v Speaker 6>to Washington complaining about each other into one voice saying,

0:22:33.440 --> 0:22:35.440
<v Speaker 6>we have to have a solution for this going forward.

0:22:35.720 --> 0:22:39.119
<v Speaker 6>Israel cannot be unchecked. Hamas we agree, cannot be in

0:22:39.200 --> 0:22:39.960
<v Speaker 6>charge of Gaza.

0:22:40.200 --> 0:22:41.480
<v Speaker 5>We're all going to agree.

0:22:41.160 --> 0:22:43.840
<v Speaker 6>On the basics so that we can get Israel to

0:22:43.880 --> 0:22:46.840
<v Speaker 6>start withdrawing, get Palestinians put back in charge of their

0:22:46.880 --> 0:22:50.240
<v Speaker 6>own territory, and start to try to rebuild from there.

0:22:50.920 --> 0:22:53.040
<v Speaker 5>So I think he's seeing the pressure is not.

0:22:52.960 --> 0:22:56.440
<v Speaker 6>Only from Washington, and it's from globally, but it's also

0:22:56.560 --> 0:23:00.320
<v Speaker 6>not only from the administration. It's from President Trump him self,

0:23:00.359 --> 0:23:03.480
<v Speaker 6>who's saying I will invest personal time and effort. Boy,

0:23:03.520 --> 0:23:05.399
<v Speaker 6>that's really hard to turn down if your country is

0:23:05.440 --> 0:23:10.679
<v Speaker 6>reliant on that person's individual support for your military to

0:23:10.720 --> 0:23:11.880
<v Speaker 6>sustain its own operation.

0:23:13.920 --> 0:23:16.320
<v Speaker 1>Kristin funten Rose, always good to have you with us.

0:23:16.359 --> 0:23:19.040
<v Speaker 1>Thank you so much for your INSIGHT's President and Red

0:23:19.040 --> 0:23:20.200
<v Speaker 1>six International.

0:23:22.720 --> 0:23:26.080
<v Speaker 2>Thanks for listening to today's episode of the Bloomberg Daybreak

0:23:26.240 --> 0:23:29.639
<v Speaker 2>Asia Edition podcast. Each weekday, we look at the story

0:23:29.680 --> 0:23:34.040
<v Speaker 2>shaping markets, finance, and geopolitics in the Asia Pacific. You

0:23:34.080 --> 0:23:38.199
<v Speaker 2>can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

0:23:38.320 --> 0:23:41.320
<v Speaker 2>or anywhere else you listen. Join us again tomorrow for

0:23:41.440 --> 0:23:44.919
<v Speaker 2>insight on the market moves from Hong Kong to Singapore

0:23:45.320 --> 0:23:49.119
<v Speaker 2>and Australia. I'm Doug Prisoner and this is Bloomberg