Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Welcome to the Daybreak Asia podcast. I'm deg Krisner. Market
Speaker 2: suffered some whiplash today from the headlines regarding war in Iran.
Speaker 2: After the US close, President Trump extended the ceasefire between
Speaker 2: the US and Iran at the request of Pakistan.
Speaker 3: Now.
Speaker 2: Trump also said the US military will continue its blockade
Speaker 2: of the straight offom moves, and he said he was
Speaker 2: taking these steps until Iran's leaders could present a unified proposal.
Speaker 2: This seemed to be quite a reversal from Trump's position
Speaker 2: as of early Tuesday morning, when the President said he
Speaker 2: would resume bombing without a deal in place. Now that
Speaker 2: ceasefire with Iran was set to expire on Wednesday. For
Speaker 2: a closer look at market action, I'm joined by Bloomberg's
Speaker 2: Paul Dobson. Paul as executive editor for Asia Markets, and
Speaker 2: he joins from our studios in Singapore. It's clear that
Speaker 2: peace talks have faltered. Early in the day, Vice President JD.
Speaker 2: Vance suspended a trip to Islamabad, and I know there
Speaker 2: was a lot of confusion as to where Vance was
Speaker 2: at the time. This seemed to be in direct response
Speaker 2: to representatives from Tehran refusing to attend these meetings, And
Speaker 2: I'm curious, Paul, to get your take on what you're
Speaker 2: hearing from market participants about what appears to be the
Speaker 2: real lack of a tangible resolution here.
Speaker 3: Yeah, hi, Doug. So there's two different ways to be
Speaker 3: thinking about this as a market practitioner, I think, because one,
Speaker 3: what we're seeing in the Asian morning is actually a
Speaker 3: relatively positive macro outlook. Again, we have US stock index
Speaker 3: futures up currently, a little bit of weakness in Creede
Speaker 3: oil if anything, and weakness in the dollar as well,
Speaker 3: which are the trades that we tend to get when
Speaker 3: people are a bit more optimistic about the way the
Speaker 3: situation in the Middle East is going. And I think
Speaker 3: what people are latching onto here is that intimation from Trump,
Speaker 3: not that it's you know, another sort of change of
Speaker 3: mind by him, so much as the idea that there
Speaker 3: is really some internal turmoil in Iran at the moment,
Speaker 3: and so we're sort of waiting for that side to
Speaker 3: figure out exactly what it wants to do. And I
Speaker 3: think the market sees it as hopeful in the idea
Speaker 3: that there's a more potentially moderate voice in the room
Speaker 3: in Iran pushing in favor of those talks. At the
Speaker 3: same time, of course, you know, there are plenty of
Speaker 3: hardliners there that would prefer to prefer to maximum kind
Speaker 3: of resistance against the US. So I think that on
Speaker 3: that short term basis, that's why the market is at
Speaker 3: least taking a little bit of heart from the situation
Speaker 3: where we are right now, and the fact that there
Speaker 3: are no actual bombs falling is generally being seen by
Speaker 3: the market as a positive. The longer term view, of course,
Speaker 3: is the strait is still closed, and every day that
Speaker 3: we have that the situation still as we've been saying
Speaker 3: for weeks now, Doug, every day, you know, the tightness
Speaker 3: in those energy markets does get a little bit more constraints,
Speaker 3: and we're starting to see we're seeing airline companies, for example,
Speaker 3: they're talking about reducing the number of flights that's happening.
Speaker 3: We're seeing some manufacturing production a bigger company starting to
Speaker 3: just get a little bit ratcheted down as well. So
Speaker 3: I think that those signs are emerging a little bit more,
Speaker 3: and that's something that the market is going to have
Speaker 3: to keep in its mind. At the same time as
Speaker 3: the possibility of a resolution at some point.
Speaker 2: I was struck by the fact that President Chichinpang of
Speaker 2: China was urging the restoration of transit through the Strait
Speaker 2: of Formos. Apparently there was a very rare call that
Speaker 2: happened with the crown prints of Saudi Arabia. It seems
Speaker 2: like China is beginning to exert a little bit of
Speaker 2: pressure here after what seven weeks of war.
Speaker 3: Yeah, and if China can have any influence over I run,
Speaker 3: then that would presumably be a positive thing for the
Speaker 3: global market situation at the very least, if they do
Speaker 3: manage to bring talks back to the table. It's not
Speaker 3: entirely clear what China can achieve in that respect. It's
Speaker 3: sort of been, as you intimated, a little bit stand
Speaker 3: off in the whole situation, not getting involved so far,
Speaker 3: and maybe that's because, you know, it doesn't have that
Speaker 3: much potential to influence things either. What we do see
Speaker 3: in China itself is still you know, relatively healthy looking
Speaker 3: economy relative to a lot of the rest of the world,
Speaker 3: because it came into this situation with such high energy reserves,
Speaker 3: and because it also is you know, been moving further
Speaker 3: and further away from fossil fuels, and I think that
Speaker 3: some of the energy companies have been talking about the
Speaker 3: idea that Chinese firms have been seen selling some energy
Speaker 3: products into the market, suggesting that you know, they can
Speaker 3: actually help other people out somewhat because of that healthy
Speaker 3: reserve situation.
Speaker 2: Obviously, higher crude oil prices correlates directly to inflation. And
Speaker 2: today in the States, we heard from Kevin Warsh. This
Speaker 2: is President Trump's nominee to lead the FED. He was
Speaker 2: at his confirmation hearing today before the Senate Banking Committee.
Speaker 2: He rejected concerns that he would be a sock puppet
Speaker 2: for President Trump, and he also pledged to act independently
Speaker 2: if he is confirmed as FED chair. Is there any
Speaker 2: concern here in the market that he may be inclined
Speaker 2: to maybe think differently about inflation if President Trump is
Speaker 2: even mildly suggesting that the FED needs to be lowering
Speaker 2: interest rates sooner rather than later.
Speaker 3: So the testimony seems me at least from catching up
Speaker 3: a little bit late to be relatively neutral. And you know, yes,
Speaker 3: the line of questioning from Elizabeth Warroma, she suggested that
Speaker 3: he might be a sock puppet for Donald Trump. Clearly
Speaker 3: sort of like grabbed the headlines to a certain extent,
Speaker 3: and he delivered the refuge of that that you would expect.
Speaker 3: I thought it was interesting that even myram we've seen
Speaker 3: in recent weeks has been talking about less need for
Speaker 3: the Fed to cut interest rates quite so aggressively. Given
Speaker 3: the situation that we're in. I think Warsh probably would
Speaker 3: like to get through the hearing and get in through
Speaker 3: the door before he can make that assessment for himself.
Speaker 3: The Treasury's market itself has been interesting in recent days, Doug,
Speaker 3: because actually volatility has really been falling off a cliff there.
Speaker 3: The movement that we've seen in yields has really started
Speaker 3: to ratchet back in and sort of hold in check.
Speaker 3: And it is I think that impression that maybe the
Speaker 3: Fed is just not going anywhere anytime soon, that the
Speaker 3: market is now starting to price in.
Speaker 4: Well.
Speaker 2: You referenced some dollar weakness that we are seeing now
Speaker 2: in Asian trading, but the dollar was stronger in New
Speaker 2: York trading. There's been a lot of volatility where the
Speaker 2: foreign exchange has been concerned. Is that really what we're
Speaker 2: going to be dealing with for the foreseeable future. A
Speaker 2: lot more volatility in some of these cross currency relationships.
Speaker 3: I'm not convinced because the market doesn't really seem to
Speaker 3: know what to do with all the information. So what
Speaker 3: we have seen and been reporting in recent days is
Speaker 3: the idea that hedge funds are ratcheting up their bets
Speaker 3: on continuing dollar weakness, so they're using options. First of all,
Speaker 3: we had a story that was looking at how they
Speaker 3: were trading options betting on stronger Asia currencies, are the
Speaker 3: Chinese un and the Korean want being seen as favorites there.
Speaker 3: Then they shifted a little bit into your Europe as well,
Speaker 3: looking for strength against the US dollar there. But of course,
Speaker 3: like you say, it's a little bit of a frustrating
Speaker 3: trade for them because every time the war dynamic moves
Speaker 3: in a different direction, the dollar appreciates again, and then
Speaker 3: those sort of the timing of those trades can get
Speaker 3: out of kilter as well. So I think it's not
Speaker 3: huge amounts of volatility, but it's just kind of whiplashing
Speaker 3: backwards and forwards around those sort of pivoty areas, and
Speaker 3: so much is dependent on that headline risk at the moment.
Speaker 3: What we have seen is, you know, commodity currencies in
Speaker 3: among all this have been some of the bigger winners,
Speaker 3: the Australian dollar, the Brazilian real for example, seem to
Speaker 3: be rising a little bit above the noise and showing
Speaker 3: more signs of consistent sort of appreciation process.
Speaker 2: So I'm curious as to what the conversation has been
Speaker 2: like between central bankers and the Asia Pacific and markets.
Speaker 2: Is there a message that is being communicated that has
Speaker 2: some level of clarity behind it or are they pretty
Speaker 2: much in no man's land as well?
Speaker 3: They Yes, in no man's land sounds about right. So
Speaker 3: we do hear from a couple of the Asian central
Speaker 3: banks this week. I think we have Indonesia and Philippines
Speaker 3: central bank decisions and those so those economies are in
Speaker 3: a slightly different place to a lot of the rest
Speaker 3: of the world. They're the ones that are really under
Speaker 3: the pressure because of their dependence on energy inputs to
Speaker 3: keep the economy running. And you know, Indonesia has extra
Speaker 3: issues in terms of this if it's stock market at
Speaker 3: the moment. So for those central banks, what they what
Speaker 3: they would really like to do is to be able
Speaker 3: to ease interest rates to reduce pressure on the economy.
Speaker 3: But what they're also facing is pressure on their currencies,
Speaker 3: and so having higher interest rates would protect the currencies
Speaker 3: from too much setting pressure too. So they're a little
Speaker 3: bit caught between a rock and a hard place. And
Speaker 3: you know, those are the economies that are really struggling,
Speaker 3: and as a result, they're the ones with the currencies
Speaker 3: that have been under pressure during the six or seven
Speaker 3: weeks that we've had this conflict in the Middle East.
Speaker 2: Before I let you go, I have to ask about
Speaker 2: this story and mythos this new AI model released Bianthropic selectively.
Speaker 2: There have been some government entities that have been allowed
Speaker 2: to kind of test this model. There have also been
Speaker 2: a few banks within the kind of major money center
Speaker 2: banking community that have been allowed to experiment with it
Speaker 2: as a way of testing their own vulnerability for possible
Speaker 2: cyber attacks. So today we learned that a small group
Speaker 2: of unauthor rised users was able to access this mythos
Speaker 2: AI model from Anthropic. They were able to gain access
Speaker 2: through a number of different tactics. One included basically a
Speaker 2: worker that had been assigned to a third party contractor
Speaker 2: for Anthropic was able to kind of allow access to
Speaker 2: the system. There were some other intranet sleuthing tools that
Speaker 2: have been used. Is there concern here at all within
Speaker 2: the Asia Pacific, particularly when you look at some of
Speaker 2: these financial systems, about the vulnerabilities that may exist when
Speaker 2: you get a super sophisticated AI model that represents a
Speaker 2: threat to cybersecurity.
Speaker 3: I think there must be. I think there's a sid
Speaker 3: in irony, right. The model that everyone is fearing is
Speaker 3: going to highlight all of these security loopholes in existing
Speaker 3: systems also has its own problems with back doors and
Speaker 3: access to and the potential for misuse is definitely high.
Speaker 3: And you know, we've seen plenty of cyber attacks already
Speaker 3: over the past few years that have proven pretty disruptive already.
Speaker 3: I think I had a really interesting conversation with one
Speaker 3: of my colleagues where they were talking about this idea
Speaker 3: that the greater the sophistication that we get with the
Speaker 3: AI models, the bigger the risk there is of one
Speaker 3: day something just absolutely unthinkable happens. You know, for example,
Speaker 3: every sense everybody's bank account in the entire world is
Speaker 3: emptied simultaneously, which would be a very very extreme example.
Speaker 3: But those kinds of really nasty things are a little
Speaker 3: bit less of a kind of non negligible risk of course,
Speaker 3: if you're a market practitioner, something like that is impossible
Speaker 3: almost to price in because it would be such a
Speaker 3: humongous shock globally. So it's sort of something that people
Speaker 3: have to keep in mind. I think the flip side
Speaker 3: of him propic and myth us is the tech industry,
Speaker 3: the AI industry, the chip industry is just you know,
Speaker 3: having another phenomenal run at the moment. We see the
Speaker 3: costby setting record highs, the Taiwan benchmark setting record highs.
Speaker 3: We've seen the Philadelphia Socks Index on a fifteen day
Speaker 3: winning streak now, and so you know, there are risks
Speaker 3: and vulnerabilities out there, but there's also you know, a
Speaker 3: renewed massive enthusiasm for the potential for AI and technology
Speaker 3: going forwards.
Speaker 2: And there really seems to be the need for kind
Speaker 2: of global regulators to get involved so that everyone is
Speaker 2: on the same page, right because I mean, the pervasiveness
Speaker 2: I mean of these systems globally. It's not just that
Speaker 2: we're talking about the US financial system, were we're talking
Speaker 2: about financial systems worldwide.
Speaker 3: Yeah, I agree that it's running so fast that it's
Speaker 3: ahead of the regulators, and you know, the sensible thing
Speaker 3: would be for wise or cool heads to step in
Speaker 3: ensure that there's some sort of slow down mechanism in
Speaker 3: place so that things can be studanized. It's a bit
Speaker 3: like the nuclear energy industry, you know, where the regulators
Speaker 3: there are extremely careful and prudent before approving any new
Speaker 3: plant because of the dangers. It's kind of a similar
Speaker 3: sort of risky sort of a thing, and you would
Speaker 3: hope that they could put in place structures that would
Speaker 3: be able to control it and self censor as well
Speaker 3: in terms of the developments that are being rolled out.
Speaker 2: Good analogy, Paul, Thank you so very much. Bloomberg's Paul Dobson,
Speaker 2: Executive editor for Asia Markets, joining from Singapore here on
Speaker 2: the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.
Speaker 2: I'm Derek Prisner. So President Trump indefinitely extended the ceasefire
Speaker 2: between the US and Iran at the request of Pakistan.
Speaker 2: For a little more analysis, we heard from Jessica Genauer.
Speaker 2: Jessica is the academic director of the Public Policy Institute
Speaker 2: the University of New South Wales, and she spoke with
Speaker 2: Bloomberg TV host Heidi Stroud Watts and Cherry on.
Speaker 5: We've seen from the start the fifteen point Plan, the
Speaker 5: ten point Plan, the last round of negotiations that a
Speaker 5: lot of the really substantive issues have the part is
Speaker 5: very much far apart, almost exidentally apart. Right, what does
Speaker 5: that mean going forward? Now that this truth has been extended,
Speaker 5: We're now talking about the possibility of some type of
Speaker 5: a cold war, a frozen war, in your wording, a
Speaker 5: sort of forever war, if you will.
Speaker 6: Yeah, that's right. So there are sort of a couple
Speaker 6: of tracks on which things are happening. So there's the
Speaker 6: track of more substantive political agreement around those really tricky issues,
Speaker 6: for example, what happens with the strait of Humor's what
Speaker 6: happens with Iran's capacity to enrich uranium and the whole
Speaker 6: nuclear issue, what happens in terms of sanctions on Iran,
Speaker 6: And we're really not seeing any movement on those deeper
Speaker 6: issues use that are driving this conflict. And then on
Speaker 6: a sort of a parallel track, we have these shaky
Speaker 6: agreements around a ceasefire, which at the moment really depends
Speaker 6: a lot on the fact that I think Trump wants
Speaker 6: a cessation of hostilities, wants to kind of withdraw the
Speaker 6: US from that full scale military campaign that we saw
Speaker 6: in those weeks of full scale war, and so what
Speaker 6: I see happening is that most likely the ceasefires will
Speaker 6: hold because ultimately that's in the Iranian regime's interest at
Speaker 6: the moment as well.
Speaker 4: Whilst they have withstood.
Speaker 6: The US bombing campaign so far and Israeli military strikes,
Speaker 6: they really wouldn't be able to withstand that forever. I mean,
Speaker 6: they might survive as a regime, but there'll be massive
Speaker 6: costs for them of that. So I think that the
Speaker 6: ceasefire will hold, mainly because it looks like that's the
Speaker 6: direction that Trump wants to pursue. But at the same time,
Speaker 6: on that other track of those really substantial issues, I
Speaker 6: don't think we're going to get any agreement anytime soon
Speaker 6: if ever between this current Iranian regime, and that.
Speaker 4: Means that there'll be a lot of volatility.
Speaker 6: There'll be ongoing costs for the Iranian people, for the
Speaker 6: region and also around the world. And so whilst it
Speaker 6: might be a sort of a frozen conflict, it doesn't
Speaker 6: mean that there wouldn't be flare ups of violence, but
Speaker 6: also ways in which the conflict is actually going to
Speaker 6: have a heavy price for you. Know countries not only
Speaker 6: in the region but globally.
Speaker 5: You've talked about how the asymmetry of this conflict in
Speaker 5: terms of military might actually create some more protracted situation. Right.
Speaker 5: Do you think for the leadership in Iran, having undergone this,
Speaker 5: having obviously lost their leader and a number of key personnel,
Speaker 5: that they're now going to just double down and this
Speaker 5: is going to be something that turns into a war
Speaker 5: of attrition, That's right.
Speaker 6: So I think that's partly what we're seeing now with
Speaker 6: Actually it was the the Iranian negotiators who said that
Speaker 6: they were not going to show up in Islamabad in
Speaker 6: Pakistan this time, and Trump was actually quite willing to
Speaker 6: send jd Vance who was sort of primed and ready
Speaker 6: to go to meet the Ranian negotiators in Islamabad.
Speaker 4: So I think what we're.
Speaker 6: Seeing is the Iranian regime has seen a sort of success.
Speaker 6: So whilst they definitely need a cessation of hostilities, they've
Speaker 6: seen a kind of success to their tactics so far,
Speaker 6: which have been using these asymmetric strategies, so using sort
Speaker 6: of small light attacks, closing the Strait of Hormuz, using
Speaker 6: missile attacks against the Gulf, so imposing these economic and
Speaker 6: political pressures on the US and on the Trump administration,
Speaker 6: And what we're seeing is that they are doubling down
Speaker 6: on that approach so by actually really playing this game
Speaker 6: of brinkmanship with the US. So they didn't quite know
Speaker 6: whether the Trump would extend the ceasefire when they said
Speaker 6: they weren't going to go to Islamabad. But I think
Speaker 6: that what elements of the Iranian regime are feeling is
Speaker 6: that they need to double down on an internal narrative
Speaker 6: of staying strong and powerful themselves and continuing to resist
Speaker 6: the US. And we haven't really seen any softening of
Speaker 6: that so far from any of the remaining elements of
Speaker 6: the leadership of the Iranian regime.
Speaker 1: What what do the internal dynamics look like in Iran?
Speaker 1: Because even President Trump are extending the seasfire, actually called
Speaker 1: a seriously fractured leadership structure in Iran and blame that
Speaker 1: for the collapse of the negotiations in Islamabad.
Speaker 6: Yeah, I think this is a really interesting point, and
Speaker 6: I think I wouldn't necessarily say fractured at this point
Speaker 6: in time, but there definitely has been a very strong
Speaker 6: effect from the fact that we've seen high level political
Speaker 6: leadership killed since the beginning of this war, and very
Speaker 6: importantly the Supreme Leader so Ayatola Harmione, who was then
Speaker 6: replaced by his son Mushtaba Hamioni. But what the issue
Speaker 6: here for the Iranian regime is that there's no one
Speaker 6: centralizing figure anymore with clear authority over all of the
Speaker 6: different parts of the Ranian regime, which the previous Supreme
Speaker 6: Leader did have. And so what that means the Iranian
Speaker 6: regime is certainly going to survive at this stage, and
Speaker 6: all of the elements of the regime are very much
Speaker 6: focused on its survival. So it's not that it's going
Speaker 6: to collapse. But what we're seeing is a little bit
Speaker 6: of power struggle starting to happen between different sort of
Speaker 6: elements inside the regime who might want to take a
Speaker 6: slightly different approach to the way they're dealing with the US.
Speaker 6: So everybody in control now we could broadly call hardline
Speaker 6: from a sort of US perspective or a Western perspective,
Speaker 6: in that they're very much engaged with ensuring the regime
Speaker 6: survival and ensuring resistance to the US and resis distance
Speaker 6: to Israel. But even within those groups, there are those
Speaker 6: who are a little softer in their approach to being willing
Speaker 6: to negotiate with the US, and there are those who
Speaker 6: are saying, we shouldn't negotiate with the US at all,
Speaker 6: we should just double down and we should even you know,
Speaker 6: potentially escalate in the war. Now, I think those slightly
Speaker 6: more pragmatic elements will probably win out, just because the
Speaker 6: Iranian regime does need a cessation of hostilities in order
Speaker 6: to sort of regroup itself. But that's basically what we're
Speaker 6: seeing inside the regime.
Speaker 1: So Jessica, if survival is the ultimate goal and they're
Speaker 1: managing to do that and drag out the war, what
Speaker 1: could the run look like in the next few months
Speaker 1: or even years. Are we talking about a frozen conflict
Speaker 1: that could lead to what happened in Afghanistan or even
Speaker 1: closer to home here in Asia, to say North Korea.
Speaker 6: So what I expect is going to happen, and again
Speaker 6: there's always uncertainty around these things, but what I expect
Speaker 6: at the moment is that the cessation of hostilities will hold.
Speaker 4: There will be no substantial politic agreement.
Speaker 6: So what that will mean is that the Raning regime
Speaker 6: will very much still continue to be a disruptive actor
Speaker 6: regarding the Strait of Humors, And of course there's that
Speaker 6: US blockade at the moment with the Strait of Humors
Speaker 6: as well, so there'll still be a lot of tensions there.
Speaker 6: It will still be really hard to get shipping out
Speaker 6: of the Strait of Humors. In terms of the region,
Speaker 6: it will be quite a long path for Gulf countries
Speaker 6: to rebuild that sort of impression of stability and safety
Speaker 6: and security that they had before this war, and for
Speaker 6: the Iranian people that the Ranian regime is going to
Speaker 6: be even more controlling and hardline in terms of its
Speaker 6: own domestic security. So I think going forward that we
Speaker 6: will see probably in the medium term, that the Ranian
Speaker 6: regime will stay in control of the country, but will
Speaker 6: be a disruptive actor. I do expect, however, that within
Speaker 6: the longer term, so sort of three to seven years out,
Speaker 6: we might start to see those power struggles within the
Speaker 6: Iranian regime start to have a more sort of costly
Speaker 6: effect domestically. So that depending on what happens with mush
Speaker 6: de Bahamioni and whether he can really sort of bring
Speaker 6: those different parts of the regime together under his leadership,
Speaker 6: which is not yet clear. We could actually see some
Speaker 6: kind of more internal fracturing, which would be more of
Speaker 6: a sort of civil war type situation within Iran, but
Speaker 6: I don't think we would see that for quite a
Speaker 6: few years. That's not something that would happen within months
Speaker 6: or even the next sort of three years.
Speaker 4: Jessica, just a couple of final thoughts.
Speaker 5: Has the war in a long term sense achieved anything
Speaker 5: other than showing the world how much leverage the leadership
Speaker 5: in Tehran has over the global economy through the straight
Speaker 5: of worar moves. And also, do you think at this
Speaker 5: point in a stalemate, are there any other global actors
Speaker 5: that can actually have influence China for example.
Speaker 6: So in terms of what we're left with, if this
Speaker 6: ceasefire does sort of continue to be extended, then we
Speaker 6: are really left with. I mean, on the one hand,
Speaker 6: there would be certain US personnel who would say, well,
Speaker 6: we did achieve a lot of military objectives, and they
Speaker 6: certainly did so.
Speaker 4: Both Israel and.
Speaker 6: The US took out a lot of the Iranian regime's
Speaker 6: military capability, So in terms of their ability to act
Speaker 6: within the region militarily, they are severely degraded, and it
Speaker 6: will take them a long time to rebuild, and then
Speaker 6: we also don't quite know in terms of the nuclear
Speaker 6: program how much that was degraded, particularly in the bombing
Speaker 6: that took place last year, So there has certainly been
Speaker 6: some degrading of the nuclear program as well, So there
Speaker 6: would be those who would sort of claim that as
Speaker 6: a win out of this war. On the other hand,
Speaker 6: we are seeing a region that has deeply uncertain where
Speaker 6: the Iranian regime will certainly and in fact the US
Speaker 6: at the moment will continue to disrupt shipping in and
Speaker 6: out of the Strait of Humors, and that uncertainty is
Speaker 6: like to continue. The Gulf States are in a very
Speaker 6: precarious position and the Iranian people are no better off.
Speaker 4: So yes, coming out of this, there are a lot.
Speaker 6: Of factors that are more uncertain and certainly less positive
Speaker 6: also around the world, seeing that disruption in shipping has
Speaker 6: a huge flow and effect for our cost of living
Speaker 6: and fuel scarcity, et cetera. As we're seeing all around
Speaker 6: the world and in our region as well. So in
Speaker 6: terms of other actors who could have influence, China is
Speaker 6: definitely the key one there. So China has been pretty
Speaker 6: sort of cautious and subtle in their approach so far.
Speaker 6: I mean, they've certainly been critical of the US war
Speaker 6: in Iran, and they've been positioned in themselves in many ways,
Speaker 6: you know, cooperating with Iran in terms of sharing intelligence
Speaker 6: and things of that sort. But they haven't inserted themselves
Speaker 6: as any kind of key player in this war. But
Speaker 6: China probably are the only actor with the sort of
Speaker 6: political and economic leverage to lean on the Iranian regime
Speaker 6: if they wanted to to influence them one way or another.
Speaker 6: They don't exactly have that leverage over the US, but
Speaker 6: they could certainly insert themselves more strongly if they wanted
Speaker 6: to in trying to push for some sort of solution
Speaker 6: to the war. But I think that at the moment,
Speaker 6: the Chinese regime is actually not in a bad position
Speaker 6: if they sort of sit back and look at what
Speaker 6: happens rather than trying to insert themselves too strongly. I mean,
Speaker 6: their key concern will be that the strait of hum
Speaker 6: Wars can be reopened, But other than that, I don't
Speaker 6: think that they are too disappointed seeing the US involve
Speaker 6: themselves in a costly ongoing war that is going to
Speaker 6: have massive effects for the US.
Speaker 4: Even if that sees fire holes.
Speaker 2: That was Jessica Genauer, academic director of the Public Policy
Speaker 2: Institute at the University of New South Wales, speaking with
Speaker 2: Bloomberg TV host Heidi Stroud, Watts and Cherry On bringing
Speaker 2: you their conversation here on the Daybreak Asia podcast. Thanks
Speaker 2: for listening to today's episode of the Bloomberg Daybreak Asia
Speaker 2: Edition podcast. Each weekday, we look at the story shaping markets, finance,
Speaker 2: and geopolitics in the Asia Pacific. You can find us
Speaker 2: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere
Speaker 2: else you listen. Join us again tomorrow for insight on
Speaker 2: the market moves from Hong Kong to Singapore and Australia.
Speaker 2: I'm Doug Prisner, and this is Bloomberg