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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Doug Prisner.

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Speaker 2: You can join Brian Curtis and myself for the stories

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Speaker 2: making news and moving markets in the APAC region. You

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Speaker 2: can subscribe to the show anywhere you get your podcast

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Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the

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Speaker 2: Bloomberg Business app.

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Speaker 3: Joe Little, Global chief strategist for HSBC Asset Management, to

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Speaker 3: take a closer look at market, So we'll get the

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Speaker 3: global hat on first here at Joe and we'll come

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Speaker 3: around to China in a few moments. A lot of

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Speaker 3: interest in that NDRC news conference today, But in terms

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Speaker 3: of issues that hit Wall Street today, you've got the

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Speaker 3: geopolitical attentions. We mentioned that higher oil prices seasonality and

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Speaker 3: also rising treasury yields in a sense, is this noise

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Speaker 3: now or is it something really to worry about?

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Speaker 4: Well, Hi, Brian, that's a great place to start the conversation. Look,

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Speaker 4: we've seen some big moves, haven't we in the last

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Speaker 4: few trading sessions, as you say, oil price moving dramatically,

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Speaker 4: all the developments in China and Asia stock markets, and

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Speaker 4: then this big move in the last couple of days

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Speaker 4: in terms of US treasuries responding to the stronger than

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Speaker 4: expected labor market data. So look, I mean, I think

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Speaker 4: we have to take some of these signals seriously.

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Speaker 5: It tells us of.

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Speaker 4: An environment where maybe fed trajectory is going to be

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Speaker 4: a little bit different to what people had anticipated. Maybe

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Speaker 4: there's a little bit of a threat around cost push inflation,

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Speaker 4: as you hinted at on your intro. I mean, it's

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Speaker 4: early days in the process, is probably too soon to

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Speaker 4: draw firm conclusions. So I think maybe you're right to

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Speaker 4: be a little bit skeptical. But the fact is the facts,

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Speaker 4: and we have to be adapting our view of the

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Speaker 4: world in accordance with how some of those trends are evolving.

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Speaker 2: So one of the key questions I think here in

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Speaker 2: the States is can you have economic growth to the

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Speaker 2: extent that we had the very strong jobs report without

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Speaker 2: producing a meaningful uptick in inflation. Let's say we were

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Speaker 2: not at the FEDS two percent target, but we're not

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Speaker 2: far away, and it may not move in a significant

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Speaker 2: manner even though the jobs market is pretty strong.

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Speaker 1: Is that reasonable to assume? Yeah?

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Speaker 4: Thanks, thanks Derk. Look, I mean so last last week's

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Speaker 4: labor market data is one data point. The trend that

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Speaker 4: we've seen over the last three or maybe six months

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Speaker 4: is for very gradual cooling of trends, and I think

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Speaker 4: that that pattern is still a reasonable one to conclude

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Speaker 4: based on the balance of the data that we see.

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Speaker 4: So that's not discounting completely the latest latest news, but

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Speaker 4: reflecting more on the recent trend. And of course, when

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Speaker 4: we look at some of the newer, more more trendy

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Speaker 4: labor market indicators, like vacancies, they've been falling very quickly

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Speaker 4: in the US data. So there is evidence of cooling

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Speaker 4: of the labor market. It's just happening at a very

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Speaker 4: gradual pace, much more slowly than many people anticipated, I

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Speaker 4: think as regards inflation pressures coming from the labor market.

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Speaker 4: There's also good signs that wage growth and the leading

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Speaker 4: indicators of wage growth are beginning to cool as well.

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Speaker 4: So I'm not sure the labor markets at this point

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Speaker 4: contributing to sort of a turn in dynamics faster hiring,

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Speaker 4: more wage growth. We've not yet reached that point. What

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Speaker 4: we're checking or reflecting on, I think, in markets as

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Speaker 4: investors as analysts, is the speed at which that cooling

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Speaker 4: process is taking place, and that's the big revision of

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Speaker 4: view that's been going on over the last few sessions

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Speaker 4: in markets.

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Speaker 3: So we had a big drop in yields since April.

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Speaker 3: Really the two year went from five percent down to

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Speaker 3: three and a half percent. So now we've had this

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Speaker 3: balance and on the tenure, you know, poised right at

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Speaker 3: four percent. I heard from a number of technical traders

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Speaker 3: this morning that it's around four and a quarter percent.

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Speaker 3: It's kind of the rubicon line, you know, that could

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Speaker 3: determine whether or not it becomes an issue for risk asset.

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Speaker 3: So do you have a sense of, you know, where

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Speaker 3: rising yields all of a sudden start to worry people

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Speaker 3: rather than just be a reflection of saying a little

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Speaker 3: better than expected growth.

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Speaker 5: Yeah, so I mean you're you're right, Brian.

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Speaker 4: The yield curve has has gone from being inverted to

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Speaker 4: disinverting itself and is now back to quite quite a

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Speaker 4: flat shape. So twos versus tens pretty much around the

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Speaker 4: same yield level. So there's been some interesting developments there.

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Speaker 4: Look a lot of that is coming from the market

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Speaker 4: revising its assumptions around November December, As you said on

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Speaker 4: the intro November had been assumed as likely for another

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Speaker 4: jumbo cut from the FED. That's been properly pared back.

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Speaker 4: But also when we look at the rad ex dictations

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Speaker 4: in May or June for twenty twenty five, they've been

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Speaker 4: adjusted again. There's still a process around, as Power says,

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Speaker 4: recalibration that's properly I think reflected into market pricing. So

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Speaker 4: the FAIRED is adjusting rates back to a more appropriate

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Speaker 4: normal level of interest rates as per market market expectations.

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Speaker 4: But at some point, like you say, there are some implications,

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Speaker 4: particularly for the long bond for other markets and maybe

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Speaker 4: the macro story. I think that's particularly an issue for

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Speaker 4: credits and for stock markets. One of the features of

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Speaker 4: the system that we've seen so far this year is

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Speaker 4: all the volatility has been in the rate space. Macro

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Speaker 4: interest rate expectations have been moving around with quite dramatic

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Speaker 4: shifts in the narrative, but credit markets and stock markets

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Speaker 4: have been surprisingly immune to that, surprisingly.

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Speaker 5: Low levels of volatility.

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Speaker 4: Now now higher bond yards could impact that and maybe

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Speaker 4: inject more volatility into credits and stuff markets as we

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Speaker 4: head toward the end of the year.

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Speaker 2: So Brian mentioned the NDRC press conference later today to

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Speaker 2: kind of add a little bit of a finer point

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Speaker 2: to some of the stimulus measures that we know a

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Speaker 2: little about.

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Speaker 1: Joe, can you give me.

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Speaker 2: A sense of how you think the economy will accept

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Speaker 2: these measures and whether or not it's going to have

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Speaker 2: a meaningful impact.

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Speaker 5: Well, I think investors are looking for some detail. At

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Speaker 5: this point.

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Speaker 4: We've had a comprehensive set of liquidity measures, which is

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Speaker 4: the first piece of the puzzle, and then the second

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Speaker 4: and the third pieces are reflecting the shape and size of

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Speaker 4: the fiscal stimulus, and then in time some structural reforms

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Speaker 4: to address productivity and high quality growth. So in the

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Speaker 4: near term and maybe looking ahead to the Economic Council

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Speaker 4: later in the year and even the NPC in the

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Speaker 4: early part of twenty twenty five, we're expecting an incremental

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Speaker 4: flow of news around new policy initiatives. And like you say,

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Speaker 4: the focus here I think should not just be on

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Speaker 4: the trillion R and B package that may or may

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Speaker 4: not come and may or may not be imminently announced,

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Speaker 4: but also on the composition on the shape of those packages.

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Speaker 4: We want to see more of a focus around policies

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Speaker 4: addressing social security issues, maybe addressing some of the challenges

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Speaker 4: for local governments, maybe injecting capital into banks that addresses

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Speaker 4: the demand shortage ending too.

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Speaker 3: I want to see consumers kind of get get out there,

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Speaker 3: and we've seen some you know, a little bit of

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Speaker 3: a bounce here in housing over the Golden Week, and

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Speaker 3: of course the stock market is jumped.

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Speaker 5: What's key to you to see if this is sustainable?

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Speaker 4: Well, I mean, I think it's the nature of those announcements,

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Speaker 4: in the shape of that fiscal package, and then you

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Speaker 4: want to see the follow through in the economic data. Brian, So,

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Speaker 4: I mean, it's hard to say which indicator is the

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Speaker 4: most important one. Maybe consumer confidence is ultimately what we're

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Speaker 4: looking to improve, but there's maybe clearer evidence of that

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Speaker 4: in some of the retail sales dynamics first and format.

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Speaker 4: I think that's an important one, alongside some of the

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Speaker 4: aggregate dates on credits.

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Speaker 3: Yeah, I wrote the data and Shijin Ping, let's see

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Speaker 3: some action from him, or at least some confidence building. Joe,

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Speaker 3: thank you very much.

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Speaker 5: Joe Little from.

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Speaker 3: HSBC Asset Management, Stephanie long here, chief investment officer at

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Speaker 3: Stashaway to take a closer look at it. So the

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Speaker 3: government has rolled out some of these measures including interest

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Speaker 3: rate cuts. We heard that, you know, in a big

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Speaker 3: flurry from the PBOC one day, more liquidity to support

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Speaker 3: bank lending, and that should be good if the demand

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Speaker 3: is there. And then also this pledge to stimulate the

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Speaker 3: stock market. It's something like three hundred and forty billion

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Speaker 3: dollars worth of of a pledge to allow companies to

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Speaker 3: buy back shares and such. Should we should we be

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Speaker 3: expecting a lot today, Stephanie, or just be patient. It's

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Speaker 3: going to happen step by step.

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Speaker 6: Yeah, I think.

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Speaker 7: I mean today it seems like everybody is holding the

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Speaker 7: breath for the brief, for the press conference, to see

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Speaker 7: kind of what kind of policy would come out after

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Speaker 7: the long holiday. Now, I think if you kind of

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Speaker 7: take a step back and look at I mean want

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Speaker 7: the Chinese government and in a coordinate effort, I guess

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Speaker 7: PBOC and also the UH, I guess from the fiscal

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Speaker 7: side have done so far. We're focused on the monitory policies, right,

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Speaker 7: and I think if you kind of think about the

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Speaker 7: timing of the stimulus package, basically you're looking at China

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Speaker 7: data which has been deteriorating in the past few months. Arguably,

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Speaker 7: if you look at the most important metric, which is

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Speaker 7: the property market on a month and month basis, I mean,

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Speaker 7: prices were still falling and China was actually trying to

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Speaker 7: fight off a deflationary uh kind of uh slow down.

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Speaker 7: And I mean the fact that I mean the Fed

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Speaker 7: has actually started is rate cutting cycle earlier kind of

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Speaker 7: last month. I basically gave the p B o C

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Speaker 7: a window to actually loosing up the mantary policy a

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Speaker 7: bit more to kind of prevent the spiral from further

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Speaker 7: kind of deteriorating. And I think looking forward, of course,

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Speaker 7: the all the manitary policies are actually supportive, and I

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Speaker 7: guess some of the property market measures have encouraged settiment turnaround,

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Speaker 7: as seen from kind of some of the Golden Red

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Speaker 7: data just that's just coming out. However, to have kind

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Speaker 7: of any impact on the economy, uh, a more kind

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Speaker 7: of physical stimulus of policy needs to be and not acted.

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Speaker 7: And I think that's why, I mean, the market from

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Speaker 7: so focused on what kind of fiscal policy and to

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Speaker 7: what extent, uh would the fiscal policy.

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Speaker 6: Have the impact on GDP growth?

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Speaker 7: So I think I mean it's going to come out

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Speaker 7: today or if not, I mean later this month. We

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Speaker 7: also have the the the NPC meeting, that's another window

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Speaker 7: that China can come up with further policies.

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Speaker 2: Does it surprise you with all the PBOC really has

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Speaker 2: withheld using its balance sheet, I mean what we may

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Speaker 2: call either in the US or in Europe, you know,

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Speaker 2: kind of quantitative easing, where some of this bad debt

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Speaker 2: is put on the balance sheet and it allows the

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Speaker 2: market to kind of breathe in away without levels of

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Speaker 2: stress and encourages capital to take a little bit more risk.

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Speaker 7: Yeah, I think what's happening in China is lon liquidity problem.

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Speaker 7: It's more a confidence problem, and it's very hard to

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Speaker 7: solve a confidence problem with more liquidity, because I think,

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Speaker 7: I mean, Shada is actually not lacking liquidity. The problem

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Speaker 7: is that there's no long boring. So if you look

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Speaker 7: at kind of what the IMF has done, they've looked

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Speaker 7: at the efficacy of marty policy versus fiscal policy in China.

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Speaker 7: So back in the old days and in just and eight,

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Speaker 7: for example, when China came up with a big kind

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Speaker 7: of marshy stimulus, that was much more effective. However, that

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Speaker 7: sort of effectiveness has worn off throughout the years, and

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Speaker 7: now I think the policy makers actually also understand this.

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Speaker 7: So that's why I mean, BOC has been quite expanding.

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Speaker 2: The point that I would make. If you're holding dead,

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Speaker 2: I mean, if you're underwater on an asset, right, you're

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Speaker 2: not feeling too good about holding on to that position. Yeah,

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Speaker 2: you may service it because you have the ability to

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Speaker 2: do so, but it's not going to allow you to

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Speaker 2: take greater risk.

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Speaker 6: Yeah, exactly right.

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Speaker 7: And if I mean, that's why I pointed to the

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Speaker 7: falling property prices as a as a as a metric

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Speaker 7: that is actually quite important because I mean, as you've mentioned,

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Speaker 7: if you see kind of your wealth shrinking every day

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Speaker 7: and if you're under the water, you're not going to

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Speaker 7: spend on other basic consumptions or kind of this gretory spending,

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Speaker 7: and that's kind of quite contractional for the economy.

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Speaker 3: Yeah, so confidence, as you say, is the main thing,

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Speaker 3: and getting consumers to actually feel comfortable in releasing some

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Speaker 3: of their you know, they have huge savings even if

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Speaker 3: they might be a little underwater on their mortgage and

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Speaker 3: not spending the money that they've saved over the past

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Speaker 3: you know, goodness knows how many years.

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Speaker 5: So how do you actually do that?

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Speaker 3: I think the president she you know, could could could

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Speaker 3: be influential in this area, but it doesn't seem that

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Speaker 3: that's his thing.

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Speaker 2: Yeah.

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Speaker 7: I think, of course, in the past two years or so,

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Speaker 7: we've seen a lot of policies that were very market

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Speaker 7: friendly or didn't kind of gear towards encouraging consumption, and

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Speaker 7: also in terms of stock market that has been fairly

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Speaker 7: low in their prity list, and I think all these

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Speaker 7: things actually have hurts consumer confidence. But I think what

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Speaker 7: we've seen so far in the last two or three

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Speaker 7: weeks is that there's been a concerted effort and that

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Speaker 7: seems to have a consensus at the I guess at

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Speaker 7: the highest level that this cannot continue and they need

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Speaker 7: to sort of backstop this. I think they were actually

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Speaker 7: waiting for a window where basically they have more room

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Speaker 7: to maneuver, and the fact that the FED has started

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Speaker 7: as great cutting cycle is a great window for them.

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Speaker 7: Of course, we have the US election coming up, and

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Speaker 7: that is another potential uncertainty that the Chinese government has

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Speaker 7: to grapple with, so I mean they're actually looking at

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Speaker 7: that as well.

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Speaker 2: So do you suspect when it comes to market action

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Speaker 2: that the gains that we have seen before the holiday

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Speaker 2: and the gains in Hong Kong, that this could be

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Speaker 2: a flash in the pan, and that if the underlying

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Speaker 2: trends in the overall economy don't change, I mean, you're

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Speaker 2: essentially throwing good money after bad and some of these

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Speaker 2: markets will just not respond in a positive way.

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Speaker 6: Yeah, I think.

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Speaker 7: I mean, of course, that the market has had a

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Speaker 7: big rebound, but remember where China equity valuation came from,

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Speaker 7: by it came from a very very very low level.

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Speaker 7: And I think what we've seen in the past two

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Speaker 7: weeks or so is basically a flurry of shortcovering plus

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Speaker 7: maybe some rotation of of kind of regional loan money

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Speaker 7: from for example, from India.

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Speaker 5: Back into China.

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Speaker 7: Because most funds are actually underweight uh and even with

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Speaker 7: the valley that we've had, we look kind of at

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Speaker 7: regional funds or even global funds, funds are still on

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Speaker 7: aggregate underweight China. So if if we look at valuation

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Speaker 7: right now for MSCI China at least that has gone

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Speaker 7: back to sort of historical average. So for the equity

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Speaker 7: market to rally further, I think you do need to

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Speaker 7: see kind of more confidence in terms of the earning

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Speaker 7: cycle turning in the next twelve months, and that has

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Speaker 7: to come from more fiscal stimulus.

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Speaker 3: Well, those swap facilities for companies to buy back shares

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Speaker 3: and and such could be important. And you know, in

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Speaker 3: terms of the social assistance that might get people willing

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Speaker 3: to spend their money, the help that they're giving to

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Speaker 3: you know, young graduates from universities that don't have jobs.

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Speaker 3: Is there more coming? Is that a start or is

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Speaker 3: that it?

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Speaker 6: Yeah?

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Speaker 7: If you look at the I think one of the

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Speaker 7: biggest problems that China has tackled is also the youth

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Speaker 7: unemployment problem. Right, it's actually approaching sort of high double digits.

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Speaker 7: And the I mean the policymakers help understand that there's

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Speaker 7: not enough investments going on, there's not enough kind of

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Speaker 7: I guess business opportunities to hire all these young people

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Speaker 7: coming out from school. Uh, and that's something that they

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Speaker 7: need to directly address. So within that fiscal package, and

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Speaker 7: some of the things that they can do is actually

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Speaker 7: directly subsidized companies to hire these younger folks, right, And

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Speaker 7: I think that could be a very effective way to

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Speaker 7: encourage youth employment. So, as I mentioned, I mean, basically

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Speaker 7: these are things that the government can do very very

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Speaker 7: directly in a very targetive manner, which is much more

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Speaker 7: effective than just kind of pumping liquidity in the system

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Speaker 7: because basically, as we have seen in the past episodes,

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Speaker 7: the risk of just injecting liquidity is that it goes

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Speaker 7: into a market, right, it goes into probably bubble, etc.

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Speaker 6: So that's where we're looking.

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Speaker 3: All right, Stephanie, we got to go Unfortunately, next time,

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Speaker 3: you know, come back to the studios with us. Stephanie

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Speaker 3: Lung there from stash Away.

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Speaker 2: It's been one year since the October seventh attack on

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Speaker 2: Israel and around the world today people people being remembered,

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Speaker 2: some abducted, others killed. Tragic situation. We want to reflect

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Speaker 2: on that now with David Tafuri, former State Department official

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Speaker 2: also foreign policy expert, joining us from Washington, d C. David,

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Speaker 2: thank you so much for making time. How are you

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Speaker 2: reflecting on this situation one year on.

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Speaker 6: Well, a lot has happened in this last year.

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Speaker 8: Obviously, we have to think about this anniversary and the

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Speaker 8: tragedy that happened, and the remembrance for the over one

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Speaker 8: thousand Israelis who were killed, many of them young people,

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Speaker 8: most of them civilians, who never should have been targeted,

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Speaker 8: and who suffered incredible atrocities at the hands of these

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Speaker 8: Hamas militants. But at the same time, the response by

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Speaker 8: Israel and by the IDF has forever changed the relationship

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Speaker 8: of Israel with the Palestinian territories. And we are so

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Speaker 8: far away now from a two state solution, which is

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Speaker 8: really the only way that we'll ever have peace in

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Speaker 8: this area. And so I think right now we should

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Speaker 8: be thinking about those who were killed, those who were hostages,

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Speaker 8: but we also in the future after this anniversary, have

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Speaker 8: to move towards some resolution.

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Speaker 3: So we did have a nuanced position taken by Kamala

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Speaker 3: Harris in the interview in sixty minutes when she was

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Speaker 3: asked about Israel, and she said, we support the Israeli people,

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Speaker 3: and so by implication that meant that support for the

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Speaker 3: government was not so easily stated. The only thing is

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Speaker 3: that in Israel there's a lot of support right now

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Speaker 3: for Benjamin Netanyahu and the existing government. Right so I'm

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Speaker 3: curious about the US strategy vis a VI Israel and

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Speaker 3: how you get at urging restraint when right now it

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Speaker 3: seems as though Israel wants to go for the jugular

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Speaker 3: for both Hamas and Hezbelah.

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Speaker 6: Well, a couple points.

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Speaker 8: First of all, I'm not sure that Natanya who is

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Speaker 8: popular again in Israel.

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Speaker 6: Remember he was deeply unpopular before the.

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Speaker 8: October seventh attack, and his political future was very much question.

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Speaker 6: He's still facing.

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Speaker 8: Charges of fraud and bribery that are criminal allegations that

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Speaker 8: he needs to deal with, and there are a lot

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Speaker 8: of people inside Israel that are unhappy with the response

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Speaker 8: that he's brought. But more importantly, Israel certainly has the

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Speaker 8: right to defend itself. It has the right to go

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Speaker 8: after all of those who are responsible for the attacks

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Speaker 8: a year ago, those who planned them, those who funded them,

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Speaker 8: and those who carried them out. But what most Israelis

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Speaker 8: believe is that their future depends on finding a resolution

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Speaker 8: of the Palestinian situation, and they believe that Palestinians have

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Speaker 8: a right to self determination.

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Speaker 6: They want peace, and before.

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Speaker 8: The October seventh attack, Israel was moving, you know, in

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Speaker 8: the right direction in terms of resolving its relationships with

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Speaker 8: some of the other Arab countries, and that could have

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Speaker 8: also ultimately perhaps helped get the Arab countries on their

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Speaker 8: side to find a resolution to the peace negotiations with

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Speaker 8: the Palestinian territories. Now we're in a situation where their

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Speaker 8: relationship with nearly all of the other Arab countries is

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Speaker 8: very much strained. And you have to worry that while

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Speaker 8: Netanyahu is carrying out, you know, many strikes that are

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Speaker 8: have tactical benefits to Israel in the short term, in

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Speaker 8: the long term, are they helping Israel's security or they

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Speaker 8: jeopardizing Israel's security Because every time you take out, you know,

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Speaker 8: an elder leader of Hamas or Hesba, it's going to

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Speaker 8: be replaced very quickly by someone else, and you may

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Speaker 8: be engendering a whole new generation of militants who are

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Speaker 8: even more committed to using violence as their strategy. At

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Speaker 8: some point, Israel has to end the effort to retaliate

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Speaker 8: against all those responsible, and again it does have the

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Speaker 8: right to go after all those responsible and has to

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Speaker 8: start moving towards a detente and ultimately allowing the rebuilding

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Speaker 8: of Gaza with the hope that will have a new

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Speaker 8: government in place. And I also just remind your listeners

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Speaker 8: that nearly fifty percent of the people living in Gaza

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Speaker 8: are eighteen and under, and the last time there were

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Speaker 8: elections in Gaza was seventeen years ago. Most of them

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Speaker 8: didn't even have a chance to vote for Hamas. They

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Speaker 8: didn't choose Hamas, and many of them are very unhappy

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Speaker 8: with Hamas. But there have been forty two thousand people killed,

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Speaker 8: many of them are civilians who did not support Hamas.

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Speaker 2: David, do you think it's possible to engage with Iran

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Speaker 2: or is that an exercise in futility.

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Speaker 8: I don't think Iran has the best interests of the

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Speaker 8: Palestinians or or the Middle East in general in mind,

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Speaker 8: and when they carry out their actions and their conduct

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Speaker 8: to the Iranian regime is working hard to ensure that

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Speaker 8: they stay in place, and the proxy forces that they support,

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Speaker 8: including Hamas, they provide that support because destabilizing other countries

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Speaker 8: around Iran helps protect Iran. So I'm not convinced that

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Speaker 8: there can be any talks right now with Iran. If

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Speaker 8: there were talks, those talks should be focused on ensuring

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Speaker 8: that Iran does not develop a nuclear weapon. We cannot

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Speaker 8: allow Iran to develop a nuclear weapon, and I certainly

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Speaker 8: hope that that is the highest priority of whichever administration

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Speaker 8: is next Here in the United States.

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Speaker 3: We would know that Hamas fired a lot of missiles

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Speaker 3: into rockets into Tel Aviv, and that most of them

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Speaker 3: seem to be intercepted. Is that system in place so

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Speaker 3: strong that it can withstand continued barrage of missiles.

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Speaker 6: It certainly seems like it is.

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Speaker 8: You know, very few of the missiles and rockets fired

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Speaker 8: from the Palestine territories hit their targets. Similarly, very few

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Speaker 8: of the missiles fired from Iran are hitting their targets.

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Speaker 8: And I think, you know, one of the things we've

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Speaker 8: learned in the last year is that Israel's air defense

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Speaker 8: system is highly effective, and that's a wonderful thing for

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Speaker 8: the people of Israel, and I think it's very bothersome

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Speaker 8: for Iran because Iran had hoped that it could retaliate

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Speaker 8: with some strength by firing missiles and rockets, and it

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Speaker 8: really hasn't had much of an impact, and it does

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Speaker 8: make Iran look pretty feckless, as well as the other

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Speaker 8: proxy forces who rely on, you know, cowardly rocket attacks

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Speaker 8: against civilians in Israel.

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Speaker 2: I'm sure you've had many conversation with your colleagues in

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Speaker 2: the foreign policy community.

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Speaker 1: Is there a.

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Speaker 2: Scenario that you can kind of accept as to the

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Speaker 2: path forward here, how this may come to some sort

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Speaker 2: of resolution or do you think this is essentially going

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Speaker 2: to go on indefinitely.

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Speaker 6: I think this is going to go on for quite

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Speaker 6: a while longer.

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Speaker 8: I don't believe it's going to end up escalating into

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Speaker 8: a full scale war between Israel and Iran. I think

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Speaker 8: if there's going to be a resolution, and I hope

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Speaker 8: there will be, it will start with a ceasefire in Gaza,

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Speaker 8: which would involve not just you know, Postinian leadership and Israel,

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Speaker 8: but would also involve the other key countries that have

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Speaker 8: been trying to broker a ceasefire, which includes Egypt and

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Speaker 8: Jordan and Katar and Turkey and the United States. And

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Speaker 8: if all of those countries could put the two sides

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Speaker 8: together and come up with a ceasefire, I think a

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Speaker 8: ceasefire would help quell the violence there. It would also

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Speaker 8: make it less likely that some of the proxy forces

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Speaker 8: would have an excuse to tack Israel, and then you

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Speaker 8: try to move from there to try to resolve some

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Speaker 8: of the other tensions.

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Speaker 3: Yeah. Maybe on the practical front, given all that's happened,

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Speaker 3: is you know, you spoke of a two state solution

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Speaker 3: being impossible. Now, can Gaza be rebuilt anytime soon.

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Speaker 8: I think Gaza it can't be built right away. I mean,

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Speaker 8: there have to be a seasfire, and there have to

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Speaker 8: be some you know, political solution and hopefully, you know,

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Speaker 8: some way of brokering a new government that's not linked

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Speaker 8: to Hamas, and then a lot of people think that

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Speaker 8: there's going to need to be some kind of peacekeeping

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Speaker 8: force in Gaza.

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Speaker 1: David Tafurrey, foreign policy expert.

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Speaker 3: This is the Bloomberg Daybreak Asia podcast, bringing to the

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Speaker 3: stories making news and moving markets in the Asia Pacific.

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