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Speaker 1: Let's get to our guests. Shila's jaw is with US

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Speaker 1: chief economist, also a head of market research at r

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Speaker 1: HB Banking Group, on the line from Kala Lumpur Silas.

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Speaker 1: Always pleasure to have you on the program. I think

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Speaker 1: we're looking at a terminal rate now, at least if

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Speaker 1: you take a look at what the market is expecting,

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Speaker 1: something closer to five. And I'm wondering whether or not

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Speaker 1: you think that at a five percent rate on FED funds,

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Speaker 1: whether we're looking at a great deal more economic weakness. Um, So,

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Speaker 1: good morning, Doug, and thanks for having me. Our view

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Speaker 1: is the term the s called peak rate is a

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Speaker 1: four point five to four point seven happens in the

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Speaker 1: early part of next year, and you'll correctly mentioned, you know,

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Speaker 1: around four is what the market is looking at. So

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Speaker 1: from our assessment, Doug, Um, you know, we think that

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Speaker 1: that's not a let's say it's going to be a

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Speaker 1: particularly that disasters for the US economy where there's four

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Speaker 1: point eight percent or five percent is really material because

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Speaker 1: our view is that the leads and lacks of monterrey

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Speaker 1: policy in the US contexts are far shorter than what

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Speaker 1: many policymakers and analysts expect, you know, that typical twelve

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Speaker 1: to eighteen months lead lacks structure. We think it's like

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Speaker 1: three to six months. And what we think is that

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Speaker 1: basically uh, you know, the UH in terms of the

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Speaker 1: economy and financial markets digesting the path of the FET

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Speaker 1: A lot of it is already in there, you know.

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Speaker 1: And so what we think is that the US economy

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Speaker 1: would have digested all the expectations related to the FAT

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Speaker 1: by the first morn of next year, and then we

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Speaker 1: think that the recovery or at least stabilization of growth

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Speaker 1: happens by summer of next year. And we're looking at

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Speaker 1: you know, growth average growth this year you're on here

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Speaker 1: two point two percent and then next year at at

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Speaker 1: two percent. Right, So, if you see being a rally

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Speaker 1: their recovery in the overall economy, what does it mean

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Speaker 1: for assets, particularly as we're looking at potentially a blowoutset

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Speaker 1: of results from some of the tech heavy weights. Does

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Speaker 1: that spark and everything rally? Yeah? Absolutely, So I just

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Speaker 1: want to add on to my last comment that I

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Speaker 1: just made. You know, if we were going to go

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Speaker 1: into a recession, that it was going to be imminent

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Speaker 1: in the United States, we would see here in Asia,

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Speaker 1: because Asia is a factory of the world. Okay, So

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Speaker 1: what this would from our perspective is that from the

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Speaker 1: because the US markets are inequities are going to lead

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Speaker 1: us out of you know, this so called a bear

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Speaker 1: market that people have been not talking about. And so

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Speaker 1: what we think is by you know, like that there

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Speaker 1: will be the so called Santa Claus rally in the

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Speaker 1: US in December and extending into the early part of

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Speaker 1: of of next year. So risk risk appetite should start improving, um,

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Speaker 1: you know after US Thanksgiving is our core view. So

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Speaker 1: Brian there looking as we're continuing to be on this

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Speaker 1: intervention watch four dollar year and getting towards one fifty

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Speaker 1: and bracing here for more volatility too, why short dollar

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Speaker 1: yan um? So I think the idea is there's a

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Speaker 1: magical psychological level and markets of one fifty and that

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Speaker 1: seems to be the mindset of b O J as well.

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Speaker 1: So at some point of time, as they intervened, you know,

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Speaker 1: a few weeks ago to stabilize a dollar, and more

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Speaker 1: likely than not in the near term, from a purely

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Speaker 1: tactical perspective, we could go back you know two dollar

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Speaker 1: yen in this uh fourth quarter of the year to

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Speaker 1: six level. It's a pure tactical policy intervention idea. Yeah,

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Speaker 1: it's really a dollar strength story, I think more than

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Speaker 1: anything else, at least at the moment. We talked about

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Speaker 1: a terminal rate maybe close to five sometime next year.

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Speaker 1: Give me your sense of where China is in all

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Speaker 1: of this in terms of the global covery. We've not

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Speaker 1: been able to get the third quarter GDP number or

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Speaker 1: the monthly reads on industrial production retail sales, so visibility

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Speaker 1: is absent at this moment. How do you make sense

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Speaker 1: of the strength of China's economy right now? So that's

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Speaker 1: you really hit the nail on the head. You know,

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Speaker 1: there's such limited visibility in China, whether it's related to

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Speaker 1: the economy or or markets. So it's a very risky

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Speaker 1: place to invest in, and so our core investment view

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Speaker 1: is to sell Chinese equities on rally and long dollar

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Speaker 1: NH on the economy. We have a little bit of visibility,

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Speaker 1: maybe a little bit more than others because we have

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Speaker 1: state my images by sector in China, and essentially Chinese

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Speaker 1: economy is pretty pretty weak. We think basically this year

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Speaker 1: China's prints three percent GDP growth, four percent next year.

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Speaker 1: But the whole idea here I want to mention to

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Speaker 1: your viewers is that hope, you know is smoke that

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Speaker 1: China will recovery. It has to be invested in in

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Speaker 1: terms of risky asks. It's just a little bit too

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Speaker 1: far fetched given that they're on a structural slowdown, a

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Speaker 1: cyclical slow down, and clearly the geopolitics of Western Alliance

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Speaker 1: trying to rein in China's economy. It's uh, you know,

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Speaker 1: capabilities on in terms of expansionary policy. All of these

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Speaker 1: geo political risk and economic market risk um are you know,

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Speaker 1: it's hard to digest, too risky for us to invest in.

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Speaker 1: So we have you know, Dolarsyn h at a seven

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Speaker 1: point two to seven point three by the first half

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Speaker 1: of next year. It's not looking good. Yeah, not looking

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Speaker 1: good for stocks in Hong Kong to just getting a

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Speaker 1: red headline on the Bloomberg that the Hang Saying Index

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Speaker 1: is expected to open lower by about one point seven

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Speaker 1: percent and that would be its lowest close since two

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Speaker 1: thousand and nine. When you're talking about all of these

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Speaker 1: concerns about global growth, you're remaining overweight fixed income and

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Speaker 1: you're looking at Southeast Asia local currency bonds to tell

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Speaker 1: us why yes. So here's the idea. Globally, what will

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Speaker 1: happen is that UH, basically rates have to stabilize then

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Speaker 1: only that it then transcend into putting on a list

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Speaker 1: of positions in terms of risky assets. And as usual,

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Speaker 1: it will all really depend on the dynamics of the

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Speaker 1: FED and US inflation, which we think in terms of

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Speaker 1: inflation stabilized in the in the US by year end

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Speaker 1: UH to early part of next year at least getting

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Speaker 1: early signs that the momentum loss will be durable, and

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Speaker 1: that in in Southeast Asia similarly that will be close

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Speaker 1: to the end of the acceleration and inflation on months

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Speaker 1: and months print. So what that means is that we're

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Speaker 1: thinking towards the month of December to go along duration

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Speaker 1: in the US tenure treasuries UH sorry, adjuration in the

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Speaker 1: U US bond market, in Turgy market, and similarly here

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Speaker 1: in in in Southeast Asia. So much of what Asia

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Speaker 1: uses that it can't supply for itself is energy, and

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Speaker 1: we've seen elevated crude oil prices right now very quickly, Silish,

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Speaker 1: do you think we're near the end of this move

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Speaker 1: up in oil? I. So here it's it's the oil

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Speaker 1: is a geopolitical asset right now, as you can appreciate

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Speaker 1: what our core view is, and it's coming true. Actually

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Speaker 1: we put out our quarterly about two weeks ago. Now

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Speaker 1: is that the US will continue to release strategic petroleum

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Speaker 1: reserves and more likely than not give subsidies to the

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Speaker 1: shale oil producers up to bring online the production. So

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Speaker 1: we're short brand oils from our HB Banking Group