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Speaker 1: Let's get to our guests, now, how mucha Bean Zaman,

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Speaker 1: his head of FX research at A and Z joining

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Speaker 1: us on the line from Sydney. So, as Barclay's one

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Speaker 1: analyst put it, there's a lot of finger in the

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Speaker 1: air estimate rather than high science pointing at where the

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Speaker 1: peak of rates is going to be from the Fed.

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Speaker 1: What does that mean though, in terms of how much

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Speaker 1: further dollar strength we see here? Look, we think we

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Speaker 1: are dollars bull we are dollar bullish for now, and

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Speaker 1: we think there is more upside potential in the dollar,

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Speaker 1: especially after we have seen a little bit of the

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Speaker 1: retlacement in the d X Y on Friday. Um, I

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Speaker 1: guess two or three key points driving this view. First,

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Speaker 1: I guess we had the FMC meeting where they went

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Speaker 1: from bnario from aucust to even more hawkish. So obviously,

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Speaker 1: higher rates, higher yields support the dollar. More interestingly, dollar

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Speaker 1: has also got the highest carrier ranking within G ten currencies,

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Speaker 1: So um, you know when you look at the spread

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Speaker 1: versus funding currencies via Euro or even even the lobby,

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Speaker 1: you know they're trading at why the spread differential? And finally, obviously, um,

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Speaker 1: it always continues to play your safe haven bets with

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Speaker 1: you know, recessionary affairs increasing. I get all of that,

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Speaker 1: and but the action is kind of interesting because we

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Speaker 1: we've got these two big overhangs higher interest rates and

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Speaker 1: aggressive FED that's one, and then the COVID zero policies

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Speaker 1: in China we just don't seem to SA mean, they

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Speaker 1: tease us a little bit, but we don't see any

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Speaker 1: sustainable progress in those issues getting solved yet. Equity markets

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Speaker 1: UM have have held above the June lows. They're not

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Speaker 1: really going down. So what's causing now? What is there

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Speaker 1: some residual strength there that that we're not noticing. Look,

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Speaker 1: I think it's more a function of I guess the

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Speaker 1: last six weeks we have seen you know, interesting UM

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Speaker 1: I guess UM perspectives and developments in in the non

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Speaker 1: US markets of anything. I think that's been a little

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Speaker 1: bit UM supportive in bringing the dollar back down. You know,

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Speaker 1: you've seen less negative growth momentum in probably UK and

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Speaker 1: as well as the recent Chinese news. But you know,

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Speaker 1: bottom line, liquidity is going to work. And as we're

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Speaker 1: going into year end, UM we continue to see really

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Speaker 1: use um currently you know, of course speaking at it

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Speaker 1: at one point seven percent big question how much upside

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Speaker 1: there is to there which will be dollar support if

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Speaker 1: we think there is a little bit more to go there. Uh,

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Speaker 1: and this is probably que one story into obviously in

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Speaker 1: the short term basis, we have CPI this week, UM

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Speaker 1: expect dollar, you know, to struggle for direction, remain within

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Speaker 1: that one ten to one fourteen range until we get

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Speaker 1: a clear picture on the inflation side of things. When

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Speaker 1: it comes to I guess the currency is linked more

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Speaker 1: closely to China. We're seeing a bit of weakness there

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Speaker 1: in the likes of the Aussie the key way, and

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Speaker 1: we'll be watching as well, movements in the on and

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Speaker 1: off show you one during the day's trade. How sensitive

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Speaker 1: are ex traders to you know, these headline coming through

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Speaker 1: that we are potentially seeing relaxation and then Beijing saying no,

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Speaker 1: absolutely not, We're sticking to the strict COVID zero stance.

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Speaker 1: I think the market invested, especially in the effect space,

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Speaker 1: of very closely watching the sensitivity. In fact, what we

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Speaker 1: saw on Friday really reflects how high the delta is

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Speaker 1: of the dollar to c n H in terms of

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Speaker 1: the movement. Uh, there is no doubt that what we

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Speaker 1: have been looking within our correlations, particularly for the AUSSI

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Speaker 1: and the c n Y correlation. I think over the

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Speaker 1: thirty day or fifty day correlations when we rank, you know,

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Speaker 1: what's the AUSSY more sensitive to. Interestingly, even before Friday's move,

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Speaker 1: we thought that, um, the AUSSY in the recent weeks

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Speaker 1: has been most sensitive to dollar Asia currencies. Hence we

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Speaker 1: saw that you know, two point eight percent, you know,

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Speaker 1: daily move in the AUSY on Friday on the back

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Speaker 1: of the rumor on China reopening. So yours is a

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Speaker 1: pretty careful view. We had a guest on earlier that

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Speaker 1: was talking about really five was around the time that

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Speaker 1: maybe we would finally see some clearance of of these issues.

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Speaker 1: How long are you looking out? And then what do

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Speaker 1: you do in the meantime? Look, I think market and

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Speaker 1: ask ourselves as well whether how long is it going

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Speaker 1: to take to deal with inflation? Surely, if it talked

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Speaker 1: to it's at least two to eighteen months away. I

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Speaker 1: think the story of the FED being higher for longer

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Speaker 1: is going to help move this down. Um. You know. Interestingly,

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Speaker 1: you know a couple of indicators of the US slowing,

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Speaker 1: which in turn would turn inflation lower. Already pointing in

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Speaker 1: the right direction. The tople out name a few UM

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Speaker 1: ten minus three yield spreads are negative, showing typing financial conditions.

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Speaker 1: Job data, I would argue, is the mixed non fum.

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Speaker 1: There will be the expectations, but then when you look

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Speaker 1: at it three weeks or sorry a three month or

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Speaker 1: a six month moving average, the two d and sixty

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Speaker 1: plus KATE was actually below the average years of three thousand,

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Speaker 1: which you have seen now. Third, money supply growth is

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Speaker 1: also following falling. Other central banks are reducing the magnitude

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Speaker 1: of wading creases, such as Australia. All of that is

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Speaker 1: adding up to you know us surely in that slowing momentum,

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Speaker 1: I think we will see more of that into the QE. Alright,

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Speaker 1: great to have you with us. Masure Beansaman, head of

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Speaker 1: f FX research at A and Z on the line

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Speaker 1: from Sydney for us here on Bloomberg Daybreak Asia