1 00:00:02,480 --> 00:00:10,440 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:10,520 --> 00:00:13,720 Speaker 1: Daybreak Aisia podcast. I'm Doug Prisner. You can join Brian 3 00:00:13,800 --> 00:00:16,640 Speaker 1: Curtis and myself for the stories, making news and moving 4 00:00:16,680 --> 00:00:19,560 Speaker 1: markets in the Apec region. You can subscribe to the 5 00:00:19,600 --> 00:00:23,080 Speaker 1: show anywhere you get your podcast and always on Bloomberg Radio, 6 00:00:23,320 --> 00:00:27,880 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. Vice President 7 00:00:27,960 --> 00:00:31,360 Speaker 1: Kamala Harris kicked off a critical stretch of her campaign 8 00:00:31,520 --> 00:00:34,640 Speaker 1: earlier tonight in Philadelphia. That's where she took the stage 9 00:00:34,680 --> 00:00:36,919 Speaker 1: for the first time with her new running mate, Minnesota 10 00:00:36,920 --> 00:00:39,880 Speaker 1: Governor Tim Walls, joining us now for a closer look 11 00:00:39,920 --> 00:00:43,879 Speaker 1: at the political story behind this. Amy Dacy, executive director 12 00:00:43,960 --> 00:00:49,200 Speaker 1: at American University sign Institute of a Politics and a Policy. 13 00:00:49,600 --> 00:00:52,920 Speaker 1: Good of you to drop by, Ms Dacy, Thanks so much. First, 14 00:00:52,960 --> 00:00:54,920 Speaker 1: let me get your reaction. I'm sure you watched it 15 00:00:55,000 --> 00:00:56,520 Speaker 1: on the television. What did you think? 16 00:00:57,640 --> 00:01:00,920 Speaker 2: Yeah, this is definitely general election phase that we're in, 17 00:01:00,960 --> 00:01:04,120 Speaker 2: and the enthusiasm you saw, you know in Philadelphia, I 18 00:01:04,160 --> 00:01:06,520 Speaker 2: think is going to carry out. You know, in the campaign. 19 00:01:07,360 --> 00:01:10,759 Speaker 2: It definitely was between you know, the speakers that were 20 00:01:10,800 --> 00:01:13,200 Speaker 2: before them, but it was the first time you saw 21 00:01:13,240 --> 00:01:15,640 Speaker 2: these two candidates together, and I think it was incredibly 22 00:01:15,640 --> 00:01:18,000 Speaker 2: well received. You can feel the energy in the room, 23 00:01:18,040 --> 00:01:19,840 Speaker 2: and I think they're ready to go on the road 24 00:01:20,200 --> 00:01:22,840 Speaker 2: and really start talking about their ticket and what they 25 00:01:22,880 --> 00:01:23,520 Speaker 2: planned to do. 26 00:01:23,880 --> 00:01:27,200 Speaker 1: It was earlier in the rally that Pennsylvania Governor Josh 27 00:01:27,240 --> 00:01:30,720 Speaker 1: Shapiro delivered what seemed to be a full throated endorsement 28 00:01:30,760 --> 00:01:34,080 Speaker 1: of Governor Walls. Shapiro, as you know, had been in 29 00:01:34,080 --> 00:01:37,319 Speaker 1: the running to join Vice President Harris on the ticket. 30 00:01:37,400 --> 00:01:42,160 Speaker 1: In the end, she bypassed Shapiro for whatever reason. Although 31 00:01:42,200 --> 00:01:45,319 Speaker 1: I think it's fair to say that Pennsylvania is a 32 00:01:45,360 --> 00:01:49,320 Speaker 1: politically valuable state in this election. Do you have a 33 00:01:49,400 --> 00:01:52,560 Speaker 1: sense of the strategy behind the scenes, why Walls and 34 00:01:52,680 --> 00:01:53,320 Speaker 1: not Shapiro. 35 00:01:54,560 --> 00:01:57,080 Speaker 2: Well, I think the Vice President had a very difficult 36 00:01:57,160 --> 00:01:58,840 Speaker 2: choice in front of her simply because there were so 37 00:01:58,960 --> 00:02:01,240 Speaker 2: many good Democrats to pick from, and I think that's 38 00:02:01,320 --> 00:02:03,080 Speaker 2: one of the things that you see that is very 39 00:02:03,080 --> 00:02:06,440 Speaker 2: different than the Republican bench out there. She had, you know, 40 00:02:06,480 --> 00:02:09,000 Speaker 2: a dozen people to look at, but I think at 41 00:02:09,040 --> 00:02:11,360 Speaker 2: the end of the day, some of the last names 42 00:02:11,360 --> 00:02:13,400 Speaker 2: that you saw, whether it was Mark Kelly or Josh 43 00:02:13,440 --> 00:02:17,400 Speaker 2: Shapiro or Tim Walls are all candidates that certainly get 44 00:02:17,520 --> 00:02:21,440 Speaker 2: she you know, felt comfortable with that brought something to 45 00:02:21,480 --> 00:02:26,000 Speaker 2: the ticket. I think, you know, in this situation, Tim Walls, 46 00:02:26,040 --> 00:02:30,320 Speaker 2: Governor Walls, he brings a beautiful contrast to some of 47 00:02:30,360 --> 00:02:33,120 Speaker 2: her profile. He also plays well into some of the 48 00:02:33,400 --> 00:02:36,200 Speaker 2: the you know, communities that the Democrats need to reach 49 00:02:36,240 --> 00:02:38,920 Speaker 2: out to. This is somebody from humble beginnings, was an 50 00:02:39,040 --> 00:02:42,760 Speaker 2: Army National Guard, you know, really ran and won in 51 00:02:42,800 --> 00:02:46,360 Speaker 2: a very rural conservative district in Minnesota. And you know 52 00:02:46,360 --> 00:02:48,880 Speaker 2: he's a former NRA member, a teacher or high school 53 00:02:48,960 --> 00:02:52,320 Speaker 2: football coach. You know, these are all things that played 54 00:02:52,360 --> 00:02:54,840 Speaker 2: really well. And I think all the candidates brought something, 55 00:02:55,160 --> 00:02:57,600 Speaker 2: you know, to the table. But you also saw them 56 00:02:57,600 --> 00:03:01,720 Speaker 2: immediately co arrests around this take of Harris Well. So 57 00:03:01,880 --> 00:03:04,800 Speaker 2: even Jos Shapiro sent out a very strong statement. He 58 00:03:04,919 --> 00:03:07,919 Speaker 2: certainly gave an incredible speech at the rally. I think 59 00:03:07,960 --> 00:03:10,600 Speaker 2: it's all hands on deck for the Democrats here and 60 00:03:10,760 --> 00:03:13,160 Speaker 2: every single Saraga is going to be out there supporting 61 00:03:13,200 --> 00:03:13,760 Speaker 2: this ticket. 62 00:03:14,000 --> 00:03:17,799 Speaker 1: You are a former advisor not only to President Barack Obama, 63 00:03:17,840 --> 00:03:22,280 Speaker 1: but Senator John Kerry as well now Vice President Harris 64 00:03:22,320 --> 00:03:25,800 Speaker 1: and Governor Walls are on their way to a number 65 00:03:25,800 --> 00:03:31,120 Speaker 1: of key cities in states like Wisconsin, Michigan, Arizona, Nevada. 66 00:03:31,560 --> 00:03:34,920 Speaker 1: If you were advising this campaign, what would you say 67 00:03:34,960 --> 00:03:35,880 Speaker 1: to them? 68 00:03:36,680 --> 00:03:39,040 Speaker 2: Well, I think, you know, they've started out in an 69 00:03:39,040 --> 00:03:43,520 Speaker 2: incredible way as this authentic individuals who are listening to Americans, 70 00:03:43,560 --> 00:03:46,520 Speaker 2: who are saying that they won't turn back. They're putting 71 00:03:46,520 --> 00:03:50,320 Speaker 2: a strong contrast, you know, with their opposition in the 72 00:03:50,400 --> 00:03:53,880 Speaker 2: Trump you know, Vance ticket. I think in a good way. 73 00:03:53,960 --> 00:03:56,840 Speaker 2: They're talking about their vision for America. They're not just 74 00:03:56,920 --> 00:04:00,840 Speaker 2: against something therefore something I do think they're spending, you know, 75 00:04:00,880 --> 00:04:03,160 Speaker 2: and looking for. You look at the swing through the 76 00:04:03,200 --> 00:04:05,480 Speaker 2: next week, all the states that they'll be you know, 77 00:04:05,600 --> 00:04:08,520 Speaker 2: going to, these are ones that really matter in that 78 00:04:08,600 --> 00:04:11,640 Speaker 2: electoral map. But I think the bottom line is they're 79 00:04:11,720 --> 00:04:15,080 Speaker 2: setting forth their vision for America. What this looks like, 80 00:04:15,680 --> 00:04:18,479 Speaker 2: you know, especially talking to people whether they are in 81 00:04:18,560 --> 00:04:22,320 Speaker 2: Wisconsin or New York, or California or Arizona or Nevada. 82 00:04:22,720 --> 00:04:25,520 Speaker 2: But I think their clear vision that they're putting out 83 00:04:25,880 --> 00:04:28,520 Speaker 2: is really important. And a sense of optimism. I think 84 00:04:28,800 --> 00:04:31,920 Speaker 2: you saw, you know, a sense of energy and optimism 85 00:04:32,000 --> 00:04:34,200 Speaker 2: that you haven't seen, you know, for a while with 86 00:04:34,240 --> 00:04:37,440 Speaker 2: the Democratic ticket, So I think, you know, and if 87 00:04:37,440 --> 00:04:40,400 Speaker 2: you're going to advise them, it's that keep the authenticity. 88 00:04:40,760 --> 00:04:44,159 Speaker 2: Listen as well as you know, speak, make sure that 89 00:04:44,200 --> 00:04:48,680 Speaker 2: you're out there and understanding people's pain. You know, not 90 00:04:48,839 --> 00:04:51,680 Speaker 2: everybody feels like they've moved forward, Like what where are 91 00:04:51,720 --> 00:04:53,839 Speaker 2: people at? What are the things they could do to 92 00:04:53,880 --> 00:04:56,159 Speaker 2: make their lives better? And I think they're off to 93 00:04:56,200 --> 00:04:57,120 Speaker 2: a good start with that. 94 00:04:57,440 --> 00:04:59,760 Speaker 1: So we're less than two weeks away from the Democratic 95 00:04:59,839 --> 00:05:03,360 Speaker 1: now national convention in Chicago. Did we pretty much hear 96 00:05:04,120 --> 00:05:07,000 Speaker 1: the party platform tonight at this rally in Pennsylvania? 97 00:05:09,160 --> 00:05:09,359 Speaker 3: You know? 98 00:05:09,480 --> 00:05:13,799 Speaker 2: I mean I think that you know, everything is thought 99 00:05:13,800 --> 00:05:16,400 Speaker 2: through in tactical I think starting this out in Pennsylvania 100 00:05:16,440 --> 00:05:20,400 Speaker 2: is really important. I think that this move, you know, 101 00:05:20,440 --> 00:05:22,359 Speaker 2: whether you knew it was going to be Shapiro or 102 00:05:22,400 --> 00:05:25,480 Speaker 2: Walls or Kelly, I think Pennsylvania is going to be 103 00:05:25,520 --> 00:05:28,200 Speaker 2: a battleground state no matter what. And so I think 104 00:05:28,400 --> 00:05:30,479 Speaker 2: the time they're spending there, the fact they're starting the 105 00:05:30,520 --> 00:05:33,039 Speaker 2: swing there, the fact that you have the governor of 106 00:05:33,120 --> 00:05:36,120 Speaker 2: an important state like Pennsylvania doubling down, I think this 107 00:05:36,160 --> 00:05:38,880 Speaker 2: is all coming together as they launch. And remember this 108 00:05:38,960 --> 00:05:42,160 Speaker 2: week is in lead up to a convention. They haven't 109 00:05:42,160 --> 00:05:45,760 Speaker 2: even done their Democratic Convention yet, and so Democrats have 110 00:05:45,800 --> 00:05:49,400 Speaker 2: an opportunity to show who the Democratic Party is, share 111 00:05:49,480 --> 00:05:52,360 Speaker 2: all those faces and voices of potential, you know, vice 112 00:05:52,400 --> 00:05:56,400 Speaker 2: presidential nominees set forth their platform and their vision. So 113 00:05:56,480 --> 00:05:58,920 Speaker 2: everything's tactical, and I think this is all moving into 114 00:05:58,920 --> 00:06:02,480 Speaker 2: the direction to head into Chicago in a very strong position. 115 00:06:02,640 --> 00:06:04,919 Speaker 1: It's hard to believe that it's been less roughly a 116 00:06:04,960 --> 00:06:08,479 Speaker 1: month since President Biden stepped down, and I'm looking at 117 00:06:08,760 --> 00:06:12,560 Speaker 1: some of the latest polling coming from NPR, PBS News 118 00:06:12,680 --> 00:06:16,800 Speaker 1: marist Kamala Harris leading Trump fifty one forty eight. Are 119 00:06:16,839 --> 00:06:19,640 Speaker 1: you surprised at the momentum? Has this been kind of 120 00:06:19,640 --> 00:06:22,240 Speaker 1: a stunning development that no one could have predicted? 121 00:06:23,800 --> 00:06:25,840 Speaker 2: Well, again, as you said, you know, you look back 122 00:06:25,880 --> 00:06:27,400 Speaker 2: a month ago, and it's hard to believe that we're 123 00:06:27,400 --> 00:06:30,080 Speaker 2: in this situation now. So much has changed in a month. 124 00:06:30,360 --> 00:06:32,120 Speaker 2: But I do think one of the things that was 125 00:06:32,160 --> 00:06:35,320 Speaker 2: a huge indicator, definitely, you know, to be full disclosure, 126 00:06:35,400 --> 00:06:37,599 Speaker 2: was surprising to me right out of the gate just 127 00:06:37,720 --> 00:06:40,000 Speaker 2: how strong it was, you know, in the first thirty 128 00:06:40,040 --> 00:06:43,320 Speaker 2: six hours. Vice President Harris was able to coalesce the 129 00:06:43,360 --> 00:06:47,200 Speaker 2: party you know, leadership around her, whether it was party chairs, 130 00:06:47,240 --> 00:06:49,359 Speaker 2: whether it was leaders in the House and Senate and 131 00:06:49,440 --> 00:06:53,799 Speaker 2: other governors. She also was able you know, to within 132 00:06:53,920 --> 00:06:57,680 Speaker 2: mer you know, twenty four hours, have fifty six new 133 00:06:57,720 --> 00:07:02,080 Speaker 2: thousand new volunteers sign up, you know, unbelievable amount of money, 134 00:07:02,120 --> 00:07:05,719 Speaker 2: even as early as you know today, raising ten million 135 00:07:05,800 --> 00:07:08,960 Speaker 2: dollars in the first hour after you've you know, picked 136 00:07:09,000 --> 00:07:12,920 Speaker 2: a vice presidential nominee. I think everything that came out 137 00:07:12,960 --> 00:07:15,040 Speaker 2: of the gate was really strong. So I do think 138 00:07:15,080 --> 00:07:18,240 Speaker 2: that will start reflecting in the polling and not as 139 00:07:18,240 --> 00:07:20,920 Speaker 2: surprised to see that they've been you know, flawless and 140 00:07:21,000 --> 00:07:24,760 Speaker 2: executing this they brought forward in a very strong way, 141 00:07:25,880 --> 00:07:28,720 Speaker 2: you know, a process that was respectful and still kept 142 00:07:28,760 --> 00:07:31,600 Speaker 2: everybody together in the party as she picked her vice 143 00:07:31,640 --> 00:07:35,520 Speaker 2: presidential nominee. So you know, polls are a snapshot in time. 144 00:07:35,680 --> 00:07:37,680 Speaker 2: This is going to also if you look back a month, 145 00:07:38,040 --> 00:07:40,240 Speaker 2: like look forward a month, there can be a lot 146 00:07:40,280 --> 00:07:42,760 Speaker 2: of changes and a lot going on. But I do 147 00:07:42,800 --> 00:07:47,400 Speaker 2: think she's her running mad a in well positioned going 148 00:07:47,520 --> 00:07:50,720 Speaker 2: into the convention, and we'll even see if their opponents 149 00:07:50,720 --> 00:07:52,840 Speaker 2: decide to debate them or not. There's still a lot 150 00:07:52,880 --> 00:07:56,720 Speaker 2: of pieces moving forward. But I also caution and remind 151 00:07:56,760 --> 00:07:59,440 Speaker 2: people that in less than sixty days people are voting 152 00:07:59,440 --> 00:08:01,720 Speaker 2: in America. You know, we've got people voting in as 153 00:08:01,720 --> 00:08:04,400 Speaker 2: early as September, So we keep saying in ninety some 154 00:08:04,560 --> 00:08:07,560 Speaker 2: days till the election. The election is closer than we think, 155 00:08:07,640 --> 00:08:09,920 Speaker 2: so they have a small amount of time to really 156 00:08:10,000 --> 00:08:11,760 Speaker 2: reach those undecided voters. 157 00:08:12,240 --> 00:08:14,800 Speaker 1: Most definitely, Amy, good of you to join us. Thanks 158 00:08:14,800 --> 00:08:17,800 Speaker 1: so much. Enjoyed the conversation with Amy Dacy. She is 159 00:08:17,880 --> 00:08:24,920 Speaker 1: executive director at American University sign Institute of Policy and Politics. 160 00:08:30,680 --> 00:08:34,200 Speaker 1: Carlos Casanova is with us. Carlos is Senior Asia Economist 161 00:08:34,200 --> 00:08:37,920 Speaker 1: at UBP. He joins us from our studios in Hong Kong. 162 00:08:38,360 --> 00:08:40,240 Speaker 1: Good of you to drop by. I hope you're doing well. 163 00:08:40,480 --> 00:08:42,600 Speaker 1: So I think we can agree maybe a semblance of 164 00:08:42,679 --> 00:08:46,520 Speaker 1: calm in the market today, But the combination of events 165 00:08:46,559 --> 00:08:49,320 Speaker 1: seems as though it's almost like a perfect storm. We 166 00:08:49,400 --> 00:08:52,520 Speaker 1: had the weak US data on jobs last week, some 167 00:08:52,679 --> 00:08:57,120 Speaker 1: under performing tech results, a crowded yen carry trade that 168 00:08:57,280 --> 00:09:00,760 Speaker 1: may be tied to last week's decision from the Bank 169 00:09:00,800 --> 00:09:04,120 Speaker 1: of Japan. How are you making sense of this and 170 00:09:04,160 --> 00:09:07,320 Speaker 1: when clients come to you, how are you describing the 171 00:09:07,400 --> 00:09:09,280 Speaker 1: unfolding of these events? 172 00:09:10,920 --> 00:09:14,520 Speaker 4: Good morning, and certainly very tumultuous period for markets. I 173 00:09:14,559 --> 00:09:18,920 Speaker 4: think you've missed the one factor, which is valuations in Japan. 174 00:09:19,400 --> 00:09:23,120 Speaker 4: Those were averaging cyclical highs last week, although of course, 175 00:09:23,160 --> 00:09:26,480 Speaker 4: following that massive correction, we are now looking at a 176 00:09:26,520 --> 00:09:28,760 Speaker 4: twelve times on a four p basis, which is more 177 00:09:28,800 --> 00:09:33,120 Speaker 4: in line with average levels for Japan. But we are 178 00:09:33,160 --> 00:09:36,040 Speaker 4: explaining it to clients exactly in this context. We think 179 00:09:36,960 --> 00:09:40,360 Speaker 4: the main trigger was this unwinding of the yen carried trade. 180 00:09:41,080 --> 00:09:44,120 Speaker 4: If you look at the commodity trade in Future Commission, 181 00:09:44,200 --> 00:09:46,760 Speaker 4: about fifty percent of that has been unwound over the 182 00:09:46,800 --> 00:09:49,719 Speaker 4: past few weeks. And the reason for that it was 183 00:09:49,760 --> 00:09:52,560 Speaker 4: a crowded trade. And now you have a very hawkish 184 00:09:52,600 --> 00:09:55,920 Speaker 4: Bank of Japan potentially eroding the profitability of that trade 185 00:09:55,960 --> 00:10:00,760 Speaker 4: in the months ahead. That coincided with fears around a 186 00:10:00,760 --> 00:10:03,080 Speaker 4: potential slow than in the US economy, and of course 187 00:10:03,160 --> 00:10:06,640 Speaker 4: you had a perfect storm for a correction. The selling 188 00:10:06,679 --> 00:10:09,240 Speaker 4: pressure was quite in discriminate, even in Japan. You saw 189 00:10:09,280 --> 00:10:11,240 Speaker 4: selling across all sectors, even one of some of the 190 00:10:11,240 --> 00:10:14,120 Speaker 4: sectors that benefit from a more hawkish Bank of Japan, 191 00:10:14,800 --> 00:10:16,840 Speaker 4: and so we have been telling clients that, you know, 192 00:10:16,920 --> 00:10:20,320 Speaker 4: for those that were not able to, you know, lock 193 00:10:20,360 --> 00:10:22,120 Speaker 4: in some profits, you know, ahead of the Bank of 194 00:10:22,200 --> 00:10:26,040 Speaker 4: Japan meeting, there will be another opportunity. Because the market 195 00:10:26,120 --> 00:10:29,200 Speaker 4: has been so volatile, it doesn't it looks overdone and oversold. 196 00:10:30,640 --> 00:10:32,520 Speaker 4: But you know, if you do see that rebound, you 197 00:10:32,559 --> 00:10:35,920 Speaker 4: have to start looking at fundamentals and try to reposition accordingly. 198 00:10:36,240 --> 00:10:39,120 Speaker 4: And in the US we're also not expecting a recession, 199 00:10:39,120 --> 00:10:41,719 Speaker 4: so we think the cell of is a little bit overdone, 200 00:10:42,280 --> 00:10:45,200 Speaker 4: but we are monitoring this soft landing very closely and 201 00:10:45,240 --> 00:10:46,719 Speaker 4: also repositioning accordingly. 202 00:10:47,120 --> 00:10:50,520 Speaker 1: I'm well aware of the deflationary history in Japan, more 203 00:10:50,559 --> 00:10:53,920 Speaker 1: than three decades worth, and I understand how that history 204 00:10:54,000 --> 00:10:56,680 Speaker 1: is going to create a bit of a conservative bias 205 00:10:57,920 --> 00:11:00,720 Speaker 1: within the policy making body of the Bank of Japan. 206 00:11:00,920 --> 00:11:03,160 Speaker 1: Having said that, I think we have seen over the 207 00:11:03,240 --> 00:11:08,640 Speaker 1: last well almost two years inflationary pressures building. The boj 208 00:11:08,920 --> 00:11:13,200 Speaker 1: resisted the temptation to tighten. Is the Bank of Japan 209 00:11:13,280 --> 00:11:18,480 Speaker 1: in any way complicit in maintaining a weaker currency and 210 00:11:18,559 --> 00:11:22,520 Speaker 1: allowing for excessive leverage in global markets. 211 00:11:24,679 --> 00:11:29,400 Speaker 4: To some extent, you can argue that there is no 212 00:11:29,440 --> 00:11:32,240 Speaker 4: way that Bank of Japan wasn't aware of these risks 213 00:11:32,280 --> 00:11:35,839 Speaker 4: in the global financial system. They are the only ones 214 00:11:35,840 --> 00:11:38,320 Speaker 4: that may be able to answer the question how big 215 00:11:38,640 --> 00:11:40,600 Speaker 4: was this carry trade? I think no one else has 216 00:11:40,640 --> 00:11:42,440 Speaker 4: the data. We all look at proxies to try to 217 00:11:42,559 --> 00:11:46,240 Speaker 4: estimate the size of the carried trade. And it's also, 218 00:11:46,640 --> 00:11:49,360 Speaker 4: I would say reasonable to assume that the FED and 219 00:11:49,400 --> 00:11:53,120 Speaker 4: the Bank of Japan to communicate to some extent. So 220 00:11:53,520 --> 00:11:55,559 Speaker 4: in a sense, yes, I think Bank of Japan may 221 00:11:55,600 --> 00:12:00,839 Speaker 4: have had pressures to deliver the hawkish pivot, perhaps before 222 00:12:00,840 --> 00:12:03,800 Speaker 4: they had full visibility in terms of the data. We 223 00:12:03,880 --> 00:12:07,520 Speaker 4: can go into that later. As a result of this 224 00:12:07,600 --> 00:12:11,480 Speaker 4: imbalance that was building in the global financial sector and 225 00:12:11,679 --> 00:12:16,079 Speaker 4: following many many months of them essentially sort of providing 226 00:12:16,720 --> 00:12:20,240 Speaker 4: the conditions for one way expectations on the Japanese end 227 00:12:20,600 --> 00:12:22,679 Speaker 4: so very crowded trade and at some point they had 228 00:12:22,679 --> 00:12:23,480 Speaker 4: to pull the trigger. 229 00:12:24,000 --> 00:12:26,280 Speaker 1: The other part of the story is obviously the story 230 00:12:26,320 --> 00:12:29,360 Speaker 1: of dollar strength. Now we know that the inflation story 231 00:12:29,520 --> 00:12:31,920 Speaker 1: in the US is very different from what it is 232 00:12:31,920 --> 00:12:35,319 Speaker 1: in Japan, and the end or rather the FED has 233 00:12:35,320 --> 00:12:39,200 Speaker 1: had a bias to keep things tight for some time now, 234 00:12:39,240 --> 00:12:41,400 Speaker 1: So I guess if you are on the side of 235 00:12:41,400 --> 00:12:44,880 Speaker 1: the boj pointing to the persistent weakness, some of the 236 00:12:44,920 --> 00:12:48,280 Speaker 1: problem may stem from persistent dollar strength. 237 00:12:48,000 --> 00:12:53,199 Speaker 4: Right, correct. So going back to the point on inflation 238 00:12:53,280 --> 00:12:56,240 Speaker 4: in Japan, it has been significantly higher than the two 239 00:12:56,240 --> 00:12:59,240 Speaker 4: percent target, but most of that has been driven by 240 00:12:59,320 --> 00:13:02,760 Speaker 4: strong dollar yen, so a lot of that is imported inflation. 241 00:13:02,960 --> 00:13:07,440 Speaker 4: Where there's whole case for tightening rates has been this 242 00:13:07,559 --> 00:13:12,559 Speaker 4: virtuous cycle. So you first have weak yen triggering imported inflation. 243 00:13:13,000 --> 00:13:16,079 Speaker 4: As a result of that, you instigate changes in corporate behavior, 244 00:13:16,160 --> 00:13:19,720 Speaker 4: including increasing wages. For the first for the highest amount 245 00:13:20,040 --> 00:13:22,360 Speaker 4: that increase was the highest than thirty years, So definitely 246 00:13:22,360 --> 00:13:26,320 Speaker 4: that part of the cycles has materialized, and then down 247 00:13:26,360 --> 00:13:29,080 Speaker 4: the line that should translate into stronger domestic consumption and 248 00:13:29,200 --> 00:13:33,480 Speaker 4: endogenous inflation. The third part of that puzzle is what 249 00:13:33,559 --> 00:13:37,400 Speaker 4: we haven't quite seen yet. Although data overnight did show 250 00:13:37,520 --> 00:13:40,120 Speaker 4: real wages increasing by one point one percent for the 251 00:13:40,120 --> 00:13:42,720 Speaker 4: first time since twenty twenty one, but in none of itself, 252 00:13:42,760 --> 00:13:47,160 Speaker 4: that is not sufficient to justify the hawkish pivot. So 253 00:13:47,720 --> 00:13:50,800 Speaker 4: I think inflation has been high, but it's predominantly driven 254 00:13:50,840 --> 00:13:53,920 Speaker 4: by US dollars strength, to your point, and so Bank 255 00:13:53,920 --> 00:13:57,720 Speaker 4: of Japan really really has taken a gamble here because 256 00:13:58,000 --> 00:14:01,600 Speaker 4: the preliminary data does point towards this virtual cycle sort 257 00:14:01,600 --> 00:14:03,280 Speaker 4: of taking hold in the second half of the year, 258 00:14:03,600 --> 00:14:07,040 Speaker 4: but they moved ahead of having visibility on that front. 259 00:14:07,240 --> 00:14:09,079 Speaker 1: So, Carlos, next week, as you know, we're going to 260 00:14:09,120 --> 00:14:11,880 Speaker 1: get the quarterly GDP number for Japan, how are you 261 00:14:11,920 --> 00:14:13,479 Speaker 1: assessing the overall economy. 262 00:14:14,559 --> 00:14:17,480 Speaker 4: It's a backward looking indicator, so I think it's going 263 00:14:17,520 --> 00:14:21,400 Speaker 4: to disappoint Remember that the economy was in a recession 264 00:14:21,440 --> 00:14:26,960 Speaker 4: in the first quarter. Consumption and capital expenditure was contractionary 265 00:14:27,000 --> 00:14:32,000 Speaker 4: as a result of high inflation, squeezing purchasing power of 266 00:14:32,040 --> 00:14:35,000 Speaker 4: households in Japan because all of their imports net importer, 267 00:14:35,040 --> 00:14:37,760 Speaker 4: and all of the imports are more expensive. But also 268 00:14:37,840 --> 00:14:41,400 Speaker 4: companies have been adjusting to higher nominal wages by reducing 269 00:14:41,520 --> 00:14:46,000 Speaker 4: the amounts that they spend on capital expenditures. So I 270 00:14:46,040 --> 00:14:49,120 Speaker 4: think that trend is going to continue into the second quarter, 271 00:14:49,560 --> 00:14:51,960 Speaker 4: and of course, if we see a disappointing GDP reading, 272 00:14:52,240 --> 00:14:55,480 Speaker 4: that is going to be quite negative for markets. Against 273 00:14:55,480 --> 00:14:59,000 Speaker 4: the backdrop of this of this, you know, concerns about 274 00:14:59,080 --> 00:15:02,120 Speaker 4: global growth and BOJ being too hawkish even as the 275 00:15:02,160 --> 00:15:05,880 Speaker 4: economy struggles a little bit. So I think that it 276 00:15:05,960 --> 00:15:09,040 Speaker 4: will disappoint, But as I mentioned, it's a backward looking indicator, 277 00:15:09,160 --> 00:15:10,680 Speaker 4: so you have to take it. 278 00:15:10,640 --> 00:15:11,480 Speaker 3: With a pinch of salt. 279 00:15:11,880 --> 00:15:14,880 Speaker 4: And the more important thing to monitor going forward is 280 00:15:15,200 --> 00:15:18,080 Speaker 4: whether or not this one point one percent increase in 281 00:15:18,080 --> 00:15:21,120 Speaker 4: real wages is sustainable, and then whether that is going 282 00:15:21,160 --> 00:15:23,080 Speaker 4: to lead to a pickup in domestic consumption. 283 00:15:23,240 --> 00:15:26,840 Speaker 1: To what extent is Japan being held back The economy 284 00:15:26,880 --> 00:15:29,080 Speaker 1: in Japan being held back by a weak China. 285 00:15:30,640 --> 00:15:34,000 Speaker 4: China is one of the largest export markets for Japan, 286 00:15:34,160 --> 00:15:36,800 Speaker 4: so I think US demand picking up in the first 287 00:15:36,800 --> 00:15:40,120 Speaker 4: half of this year was a factor that contributed to 288 00:15:40,160 --> 00:15:44,160 Speaker 4: that outperformance for Japanese equities, especially some of the exporters. 289 00:15:45,160 --> 00:15:47,960 Speaker 4: Heading into the second half, we now have a weaker 290 00:15:48,040 --> 00:15:51,800 Speaker 4: consumer demand in the US, but also China very sluggish 291 00:15:52,040 --> 00:15:55,160 Speaker 4: and it's proving very difficult to boost demand there. So 292 00:15:55,680 --> 00:15:59,160 Speaker 4: the initial idea that as demand from the US would 293 00:15:59,160 --> 00:16:02,920 Speaker 4: weekend demand from from China would pick up may not 294 00:16:02,960 --> 00:16:05,520 Speaker 4: be sustainable. So we do think that exports will be 295 00:16:05,560 --> 00:16:07,280 Speaker 4: a drag in the second half, even if they are 296 00:16:07,320 --> 00:16:11,960 Speaker 4: helping in the first half for Japan. And yeah, not 297 00:16:12,000 --> 00:16:15,560 Speaker 4: only there's the direct export channel, but also in terms 298 00:16:15,600 --> 00:16:19,280 Speaker 4: of global investor sentiment, there is a concern around a 299 00:16:19,360 --> 00:16:22,080 Speaker 4: slowing global economy and China is just not going to 300 00:16:22,120 --> 00:16:25,160 Speaker 4: come to the rescue this time around very quickly. 301 00:16:25,200 --> 00:16:28,320 Speaker 1: Fifteen seconds. Do we have to revise the growth target 302 00:16:28,360 --> 00:16:29,960 Speaker 1: for China this year? Will they make. 303 00:16:29,800 --> 00:16:33,400 Speaker 4: It five point zero? Very unlikely? So my target is 304 00:16:33,440 --> 00:16:35,840 Speaker 4: four point eight. I think they will miss target the forecast. 305 00:16:35,920 --> 00:16:37,960 Speaker 1: Carlos, It's always a pleasure. Thank you so much for 306 00:16:38,040 --> 00:16:41,640 Speaker 1: joining us. Carlos Casanova, a senior Asia economist at UBP. 307 00:16:49,760 --> 00:16:53,240 Speaker 1: Stephanie Jung joins us. Stephanie is the chief investment officer 308 00:16:53,320 --> 00:16:55,720 Speaker 1: at Stashaway, and she joins us from our studios in 309 00:16:55,720 --> 00:16:58,480 Speaker 1: Hong Kong. Good of you to drop by. I'm so 310 00:16:58,640 --> 00:17:01,720 Speaker 1: interested in your market person inspective, particularly what we have 311 00:17:01,760 --> 00:17:04,480 Speaker 1: seen over the last let's say, forty eight hours. How 312 00:17:04,520 --> 00:17:07,800 Speaker 1: are you understanding the volatility and some of the moves 313 00:17:07,800 --> 00:17:08,800 Speaker 1: that we have seen lately. 314 00:17:09,320 --> 00:17:11,879 Speaker 3: Yeah, indeed, there was a pretty crazy forty eight hours. 315 00:17:11,960 --> 00:17:14,920 Speaker 3: If you look at the market's favorite gauge of fear, 316 00:17:15,000 --> 00:17:18,399 Speaker 3: which is the VEX index measures the kind of nearrors 317 00:17:18,440 --> 00:17:22,280 Speaker 3: our volatility for US markets. It spiked it as high 318 00:17:22,280 --> 00:17:24,600 Speaker 3: as sixty five, and the last time we saw that 319 00:17:24,720 --> 00:17:27,919 Speaker 3: kind of spike was back in COVID or even before 320 00:17:28,080 --> 00:17:30,880 Speaker 3: that was the GFC. So a lot of like kind 321 00:17:30,920 --> 00:17:34,360 Speaker 3: of dislocation is happening in our view. It all started 322 00:17:34,359 --> 00:17:37,520 Speaker 3: with then winding up the carry trade when boj actually 323 00:17:37,520 --> 00:17:41,160 Speaker 3: started to hike interest rates out of kind of out 324 00:17:41,160 --> 00:17:44,879 Speaker 3: of consensus, and that sparked some unwind unwinding of the 325 00:17:45,000 --> 00:17:47,880 Speaker 3: carry trade of course for the end, but that also 326 00:17:48,040 --> 00:17:51,040 Speaker 3: kind of spiraled into other momentum traits. I mean, to 327 00:17:51,080 --> 00:17:54,159 Speaker 3: start with, I think there has been some concerns in 328 00:17:54,280 --> 00:17:57,520 Speaker 3: terms of how far, for example, the AI bubble has gone, 329 00:17:57,880 --> 00:18:01,119 Speaker 3: and there's been some debates as to, okay, whether all 330 00:18:01,160 --> 00:18:04,960 Speaker 3: these capecs spent on these AI names are justified by returns, 331 00:18:05,320 --> 00:18:09,159 Speaker 3: and as we've seen in the second quarter results, these 332 00:18:09,240 --> 00:18:11,560 Speaker 3: I mean, these returns are yet to show, right For example, 333 00:18:11,640 --> 00:18:14,639 Speaker 3: I think the big tags are saying, oh, we're seeing 334 00:18:14,680 --> 00:18:17,080 Speaker 3: increasing demand, but it's yet to show in numbers. So 335 00:18:17,200 --> 00:18:19,560 Speaker 3: investors were already a bit jettuary. I think at the 336 00:18:19,560 --> 00:18:22,880 Speaker 3: beginning of the summer beginning of July. So that's why 337 00:18:22,920 --> 00:18:25,360 Speaker 3: we saw some rotation out of these spectac names into 338 00:18:25,440 --> 00:18:28,560 Speaker 3: smaller caps into kind of other cyclical assets. And I 339 00:18:28,560 --> 00:18:32,960 Speaker 3: think just in terms of unwinding, a lot of CTAs 340 00:18:33,000 --> 00:18:36,879 Speaker 3: or control funds have done very very significant kind of 341 00:18:36,920 --> 00:18:39,520 Speaker 3: de risking in the past few days. There could be 342 00:18:39,600 --> 00:18:42,439 Speaker 3: still somewhat to sell over the next few days, but 343 00:18:42,520 --> 00:18:44,920 Speaker 3: I think a lot of the volatility or the peak 344 00:18:44,960 --> 00:18:47,720 Speaker 3: of autility has been has happened already in the past 345 00:18:47,760 --> 00:18:48,720 Speaker 3: forty eight hours. 346 00:18:49,040 --> 00:18:52,200 Speaker 5: It sounds almost like bad timing. This confluence of fact 347 00:18:52,359 --> 00:18:55,199 Speaker 5: is all happening in a span of a few sessions. 348 00:18:55,840 --> 00:18:59,560 Speaker 5: But what are your thoughts on the recession risk how 349 00:18:59,600 --> 00:19:02,159 Speaker 5: over own do you think they are out of the US? 350 00:19:02,480 --> 00:19:06,399 Speaker 3: Yeah, I think basically we've seen some weaker data coming 351 00:19:06,400 --> 00:19:10,000 Speaker 3: out from the US in the past week. So for example, 352 00:19:10,160 --> 00:19:12,240 Speaker 3: you look at the jobs data. Of course on Friday, 353 00:19:13,240 --> 00:19:16,760 Speaker 3: it miss consensus by quite a wide margin, and it 354 00:19:16,800 --> 00:19:19,720 Speaker 3: was kind of the lowest non found payroll numbers what 355 00:19:19,760 --> 00:19:22,200 Speaker 3: we've seen in the past six months or so. However, 356 00:19:22,600 --> 00:19:25,040 Speaker 3: if you kind of look underneath, there has been some 357 00:19:25,119 --> 00:19:29,000 Speaker 3: temporary kind of I guess impact in terms of the 358 00:19:29,080 --> 00:19:33,159 Speaker 3: hurricane in terms of that affecting temporary workers. So in 359 00:19:33,240 --> 00:19:37,240 Speaker 3: terms of kind of how significant this data point is, 360 00:19:37,359 --> 00:19:39,080 Speaker 3: I think as yet to be seen. You need to 361 00:19:39,200 --> 00:19:41,919 Speaker 3: kind of see the August data. Given that there's a 362 00:19:41,920 --> 00:19:45,280 Speaker 3: lot of temporary workers that were on leave in July, 363 00:19:45,400 --> 00:19:47,480 Speaker 3: I mean that number could come back in August, and 364 00:19:47,520 --> 00:19:49,960 Speaker 3: I wouldn't be surprised if the August number actually surprises 365 00:19:50,000 --> 00:19:52,280 Speaker 3: on the upside. On the other hand, of course, if 366 00:19:52,320 --> 00:19:56,280 Speaker 3: you look at the ISM numbers or kind of the 367 00:19:56,400 --> 00:20:00,240 Speaker 3: survey numbers, there is some weakness right the I think 368 00:20:00,240 --> 00:20:03,359 Speaker 3: the ISM was quite weak, and also the smp PMI 369 00:20:03,520 --> 00:20:07,560 Speaker 3: was also quite weak, below fifty for the manufacturing sector. Now, 370 00:20:08,000 --> 00:20:10,440 Speaker 3: in the past few months, we've seen a recovery in 371 00:20:10,840 --> 00:20:13,440 Speaker 3: terms of the manufacturing sector in the US and also globally, 372 00:20:13,640 --> 00:20:16,320 Speaker 3: but that seem to have stalled in July. I think 373 00:20:16,760 --> 00:20:20,040 Speaker 3: part of that is election related. If you look at 374 00:20:20,160 --> 00:20:23,280 Speaker 3: kind of the commentary that companies are giving, they're saying that, oh, 375 00:20:23,680 --> 00:20:26,359 Speaker 3: because of the uncertainty of who's going to win or 376 00:20:26,400 --> 00:20:29,840 Speaker 3: what policies are going to be in place posted the 377 00:20:29,920 --> 00:20:33,000 Speaker 3: US election, a lot of companies are actually holding back 378 00:20:33,359 --> 00:20:35,720 Speaker 3: on their investment plans. Now, of course, I mean this 379 00:20:35,840 --> 00:20:38,840 Speaker 3: then get reflected into these survey data. So I think, 380 00:20:38,840 --> 00:20:43,240 Speaker 3: again some of this is actually quite temporary. But also 381 00:20:44,080 --> 00:20:46,560 Speaker 3: I think that given that we still have ninety days 382 00:20:46,600 --> 00:20:50,280 Speaker 3: into election and right now the election outcome is actually 383 00:20:50,359 --> 00:20:53,440 Speaker 3: quite uncertain, that is going to be an overhang on 384 00:20:53,560 --> 00:20:56,440 Speaker 3: fundamentals and also on markets for the next two to 385 00:20:56,480 --> 00:20:57,120 Speaker 3: three months. 386 00:20:57,359 --> 00:21:00,080 Speaker 5: But now that we have the Harris Wells ticket, do 387 00:21:00,080 --> 00:21:04,040 Speaker 5: you think that changes Commala's odds to the White House? 388 00:21:04,080 --> 00:21:06,359 Speaker 5: And you know, what do you make of the Trump trades? 389 00:21:06,400 --> 00:21:10,240 Speaker 3: Then yeah, I think I mean, Pamela made a very 390 00:21:10,240 --> 00:21:13,040 Speaker 3: good choice in terms of her VP in kind of 391 00:21:13,080 --> 00:21:18,480 Speaker 3: balancing the I guess the the the attacket voters that 392 00:21:18,520 --> 00:21:21,720 Speaker 3: I mean, she's she's sort of not covering. So I 393 00:21:21,760 --> 00:21:25,760 Speaker 3: think that in any case, I mean, the poor VP 394 00:21:25,920 --> 00:21:29,520 Speaker 3: that he actually had in terms of the final candidates 395 00:21:29,560 --> 00:21:30,919 Speaker 3: were all very very strong. 396 00:21:31,520 --> 00:21:31,680 Speaker 4: Uh. 397 00:21:31,720 --> 00:21:33,800 Speaker 3: And if you look at kind of betting markets or 398 00:21:33,960 --> 00:21:37,200 Speaker 3: kind of arts of who's gonna win, I mean, right 399 00:21:37,200 --> 00:21:39,600 Speaker 3: now it's sort of a fifty to fifty split. And 400 00:21:40,080 --> 00:21:43,280 Speaker 3: I think this is the worst outcome for markets because 401 00:21:43,320 --> 00:21:44,840 Speaker 3: I mean, for a whole year, the market has been 402 00:21:44,840 --> 00:21:47,960 Speaker 3: trading kind of Trump being in a White House. And 403 00:21:48,440 --> 00:21:51,720 Speaker 3: actually I don't think it was co incidental that SMP 404 00:21:52,119 --> 00:21:55,720 Speaker 3: actually peaked right after the attempt at assassination of Trump. 405 00:21:55,880 --> 00:21:58,560 Speaker 3: That was when Trump, the Trump oughts actually searched his 406 00:21:58,600 --> 00:22:02,679 Speaker 3: seventy five percent and the high since the sort of 407 00:22:02,680 --> 00:22:08,760 Speaker 3: the election start, the election campaign started. And now fifty 408 00:22:08,800 --> 00:22:12,240 Speaker 3: to fifty is not a good outcome because Marcus hate uncertainty, 409 00:22:12,280 --> 00:22:14,480 Speaker 3: and right now there's a lot of uncertainty as to 410 00:22:14,520 --> 00:22:17,520 Speaker 3: who's going to win on election day, but also kind 411 00:22:17,520 --> 00:22:20,320 Speaker 3: of afterwards, right what happens. I think in any case, 412 00:22:20,320 --> 00:22:23,240 Speaker 3: it's going to be a very very close election result 413 00:22:23,400 --> 00:22:26,520 Speaker 3: and perhaps I mean that could be some sort of 414 00:22:26,720 --> 00:22:30,160 Speaker 3: contest or kind of if I mean, it was kind 415 00:22:30,200 --> 00:22:33,920 Speaker 3: of a long drag on results for a few more months, 416 00:22:33,960 --> 00:22:37,520 Speaker 3: and I think that is going to be quite negative 417 00:22:37,560 --> 00:22:38,720 Speaker 3: for markets. 418 00:22:38,840 --> 00:22:42,040 Speaker 1: So let's get back to Japan, because obviously this carry 419 00:22:42,080 --> 00:22:44,919 Speaker 1: trade was a very important deal for markets, and the 420 00:22:45,000 --> 00:22:48,120 Speaker 1: unwind of that contributing to the selling and a lot 421 00:22:48,160 --> 00:22:51,120 Speaker 1: of the volatility that we have been seeing. Next week 422 00:22:51,160 --> 00:22:55,919 Speaker 1: we get economic growth for the Japanese economy. Give me 423 00:22:57,040 --> 00:22:59,600 Speaker 1: your assessment of how well the Bank of Japan has 424 00:22:59,640 --> 00:23:02,800 Speaker 1: been doing and at adjusting its policy right now. Did 425 00:23:02,800 --> 00:23:07,119 Speaker 1: the BOJ wait too long to try to move toward normalization. 426 00:23:07,520 --> 00:23:10,679 Speaker 3: Yeah, I think. I mean, given that Japan has gone 427 00:23:10,880 --> 00:23:14,600 Speaker 3: through a deflation for the last thirty years, I think 428 00:23:14,680 --> 00:23:17,760 Speaker 3: it's prudent for the BOJ to kind of be a 429 00:23:17,760 --> 00:23:22,159 Speaker 3: bit more conservative in their move. I think the problem 430 00:23:22,200 --> 00:23:25,800 Speaker 3: with the recent move is perhaps more in the timing 431 00:23:25,920 --> 00:23:29,480 Speaker 3: of things. So they picked the summer, I think, when 432 00:23:29,720 --> 00:23:32,320 Speaker 3: liquidity is actually quite thin and a lot of people 433 00:23:32,359 --> 00:23:36,000 Speaker 3: are on leave, and I guess maybe they kind of 434 00:23:36,040 --> 00:23:39,719 Speaker 3: wish that they could move the currency with this kind 435 00:23:39,760 --> 00:23:44,040 Speaker 3: of thinner liquidity. Perhaps, I mean they got actually much 436 00:23:44,080 --> 00:23:46,119 Speaker 3: more than what they wished for in a sense that 437 00:23:46,160 --> 00:23:48,240 Speaker 3: it moved the currency in a very very valid way. 438 00:23:48,840 --> 00:23:51,920 Speaker 3: And I think at the same time they stopped ETF 439 00:23:51,960 --> 00:23:54,679 Speaker 3: purchases as well, and that I mean basically removed a 440 00:23:54,800 --> 00:23:57,600 Speaker 3: very very strong support for the nik SO. I think 441 00:23:57,600 --> 00:23:59,880 Speaker 3: a lot of these are actually quite technical in terms 442 00:23:59,920 --> 00:24:04,000 Speaker 3: of the fundamentals and progress in terms of inflation for 443 00:24:04,040 --> 00:24:06,760 Speaker 3: the Japanese economy. I mean, we still remain quite optimistic. 444 00:24:06,800 --> 00:24:09,800 Speaker 3: I think the data actually is still moving in the 445 00:24:09,840 --> 00:24:13,360 Speaker 3: right direction. And I mean, let's remember the reason why 446 00:24:13,359 --> 00:24:16,160 Speaker 3: BOJ is hiking is because I mean they are actually 447 00:24:16,200 --> 00:24:19,560 Speaker 3: quite confident of the way the economy is going. So 448 00:24:19,640 --> 00:24:22,240 Speaker 3: I think in terms of fundamental story, there's kind of 449 00:24:22,840 --> 00:24:24,800 Speaker 3: still a lot of progress, but I mean a lot 450 00:24:24,800 --> 00:24:25,880 Speaker 3: of this is technical. 451 00:24:26,359 --> 00:24:29,280 Speaker 5: How much further unwined do you think there is to 452 00:24:29,320 --> 00:24:31,080 Speaker 5: go on the yen carry trade? 453 00:24:31,800 --> 00:24:35,080 Speaker 3: Yeah, so, I mean it has. It has had a 454 00:24:35,160 --> 00:24:37,200 Speaker 3: huge move ONUND sixty to one forty five. I think 455 00:24:37,560 --> 00:24:39,720 Speaker 3: majority of that has been unwe If you talk to 456 00:24:39,760 --> 00:24:42,840 Speaker 3: micro funds, a lot of directional funds have already unwounded. 457 00:24:43,160 --> 00:24:45,639 Speaker 3: So I don't think there's much more to go, but 458 00:24:45,720 --> 00:24:48,480 Speaker 3: of course I think they're probably gonna be quite choppy. 459 00:24:48,840 --> 00:24:51,240 Speaker 1: Choppy indeed, Stephanie, it's always a pleasure. Thank you so 460 00:24:51,320 --> 00:24:54,320 Speaker 1: much for being with us. Stephanie Leung, chief investment officer 461 00:24:54,320 --> 00:24:57,000 Speaker 1: at Stashuway, joining us here on Daybreak Asia from our 462 00:24:57,240 --> 00:25:02,119 Speaker 1: studios in Hong Kong. This has been the Bloomberg Daybreak 463 00:25:02,200 --> 00:25:05,439 Speaker 1: Asia podcast, bringing you the stories making news and moving 464 00:25:05,480 --> 00:25:09,080 Speaker 1: markets in the Asia Pacific. Visit the Bloomberg Podcast channel 465 00:25:09,119 --> 00:25:12,200 Speaker 1: on YouTube to get more episodes of this and other 466 00:25:12,240 --> 00:25:16,320 Speaker 1: shows from Bloomberg. Subscribe to the podcast on Apple, Spotify, 467 00:25:16,600 --> 00:25:19,560 Speaker 1: or anywhere else you listen and always on Bloomberg Radio, 468 00:25:19,640 --> 00:25:22,200 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app.