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Speaker 1: Let's get to our next guest. Evan Lucas is chief

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Speaker 1: market Strategist and investment joining us on the line from Melbourne.

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Speaker 1: So we're looking very much ahead, Evan to j Pal

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Speaker 1: and the pressure very much on to hit the right

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Speaker 1: note in this Jackson whole speech, how hawkish are you

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Speaker 1: expecting the Fed chair to be? And how much is

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Speaker 1: priced into markets already? Yeah? Hell, Julie, most of it,

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Speaker 1: I think is there. What has been interesting over the

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Speaker 1: last particularly since the June bottom to where we are

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Speaker 1: now is this almost sanguine idea that you know, the

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Speaker 1: rate rise could possibly start to top out. And listening

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Speaker 1: to what's coming out from not just Jpower, but but

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Speaker 1: across the board, they are all telling everyone that they

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Speaker 1: can that rate rises are not only going to happen,

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Speaker 1: they're going to happen at a very very strong clip.

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Speaker 1: They want, obviously front move the curve and that's what

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Speaker 1: they've been doing for this entire period. So that's priced in,

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Speaker 1: there's no doubt. But I think the market, particularly growth

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Speaker 1: and particularly risk, has got slightly ahead of itself leading

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Speaker 1: into the Jackson hole, but also leading into the twenty

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Speaker 1: second stept A meeting, which is do they go fifty

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Speaker 1: or do they go seventy five basis points. Listening to

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Speaker 1: most of them, it would be suggested that it would

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Speaker 1: be the seventy five more likely than than fifty, and

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Speaker 1: there is then a reasonable gap to the one after,

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Speaker 1: which is in November as well. So again if they

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Speaker 1: are going to try and front load this, they need

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Speaker 1: to therefore go hard and fast that don't have as

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Speaker 1: many meetings for the rest of the year. So all

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Speaker 1: that would suggest that seventy five is what to go,

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Speaker 1: and therefore it's a hard fish till rather than anything else.

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Speaker 1: We know that they have said all along that they're

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Speaker 1: going to be data dependent. We're waiting to see as

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Speaker 1: well how much of an impact the labor market is

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Speaker 1: in their thinking too, and this key jobs report if

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Speaker 1: you've got consumers stopping to suspend as much, particularly being

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Speaker 1: hit with low income shoppers, and the impact which I

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Speaker 1: know you're seeing in Australia as well of long COVID

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Speaker 1: taking people out of the workforce. So that is what

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Speaker 1: will be the data question. From the point of view

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Speaker 1: that so far it hasn't really shown up in non

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Speaker 1: fun payrolls, so that needs to be pointed out very clearly, Yes,

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Speaker 1: people are starting to champion the idea that inflation may

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Speaker 1: have peaked. The fact that we saw or it's come

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Speaker 1: down from the low nines into the high eights, that

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Speaker 1: is still fifty BIPs away from where they want it

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Speaker 1: to be. So getting excited by inflation coming down is

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Speaker 1: still a long way away from actually where it needs

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Speaker 1: to be, and therefore there's a lot of work to

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Speaker 1: be done. The other thing, as he said there, Juliete,

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Speaker 1: about employment, is that yes, long COVID is there. Yes,

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Speaker 1: there is still furlonging of certain parts of the economy

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Speaker 1: across not just the US but across the world with

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Speaker 1: being out for COVID, but it hasn't actually seen any

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Speaker 1: major impact yet. I mean what I mean, But if

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Speaker 1: you look at, for instance, what is so fascinating by

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Speaker 1: the whole COVID experience is that what we're saying in

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Speaker 1: terms of our confidence, what we're doing with our spending

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Speaker 1: are completely opposite. So we are very pessimistic across the

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Speaker 1: globe about the outlook for the next twelve months particularly,

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Speaker 1: But if you look at spending and consumer spending still

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Speaker 1: it's still very elevated. In fact, in some instances it's

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Speaker 1: above pre COVID levels, and probably the part the reason

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Speaker 1: that is that travel has never fully recovered. You know,

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Speaker 1: if you look at hospitality, it hasn't fully recovered. So

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Speaker 1: what are we spending on. We're spending on ourselves, things

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Speaker 1: like discretionary items that remains quite high. If you look

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Speaker 1: at the credit card data across the world, that shows

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Speaker 1: you that. So that impact from rape rises hasn't happened. Therefore,

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Speaker 1: the impact on slowing inflation still hasn't happened. And although

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Speaker 1: there is an issue around possible furlonging of workers, it's

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Speaker 1: still not impacting the wage numbers yet to see that

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Speaker 1: are also coming down to bring inflation down. Let's talk

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Speaker 1: about the China story. Another hundred forty six billion dollars

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Speaker 1: in pledges for this economy to try and shore up

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Speaker 1: it's COVID batted economy. Is it enough to turn things

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Speaker 1: around when we're seeing so many headwinds for China, the

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Speaker 1: latest being the power crunch as well. Yes, And then

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Speaker 1: you're getting back to your original point for what's going

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Speaker 1: on with with the U S, which is COVID. China's

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Speaker 1: COVID policy is is probably still the biggest headwind to

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Speaker 1: what goes on in China. They are then also going

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Speaker 1: through environmental problems. We know the droughts that are going

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Speaker 1: on right now and where as well. So all those

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Speaker 1: factors are quite telling. Because the other thing that's happening

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Speaker 1: in about eight weeks time, or at least we think

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Speaker 1: it's in eight weeks time is the probable resigning of

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Speaker 1: the third term of six PINK. So it's all coming

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Speaker 1: to a head. Stimulus is needed. We know they've got

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Speaker 1: massive issues around their property market. They have got very

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Speaker 1: intermitted production at the moment because of COVID, and then

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Speaker 1: they've also got a credit crunch going on all the

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Speaker 1: same time. China is a very interesting to watch, a

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Speaker 1: one to watch. Interesting to listen to the commodity players

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Speaker 1: in this space. If you listen to a Glencore Rio

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Speaker 1: Tinto b HP, these major major commodity players that are

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Speaker 1: absolutely dependent on China. Their opinion is that the Chinese

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Speaker 1: will remain quite stable over the next months. That's not

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Speaker 1: what you're seeing in the macro data, but that's what

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Speaker 1: they're suggesting from the micro side, So that that that

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Speaker 1: is creating a bit of a disconnect. And I still

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Speaker 1: think that actually the property crunch is the one to

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Speaker 1: watch here, along with what happens posts the twentie kind

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Speaker 1: of convention and how they deal with COVID zero because

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Speaker 1: there are still many, many stories that they are going

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Speaker 1: to continue on with that policy for a long time

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Speaker 1: to come. Yeah, and absolutely very different to what we're

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Speaker 1: seeing across other parts of the world, including here in

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Speaker 1: Singapore where we're going to see a ditching of masks

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Speaker 1: for the first time in two and a half years.

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Speaker 1: On Monday, let's get to the ABBY and ZA. Kathleen

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Speaker 1: Hayes was talking to Adrian or at Jackson Hole. They

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Speaker 1: have signaled that aggressive tightening, that aggressive tightening cycle could

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Speaker 1: be near the end. Is is that kind of what

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Speaker 1: you're seeing and how does that flow on into the

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Speaker 1: ABA is thinking too, Yes, it is. If you look

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Speaker 1: at what is coming out of New Zealand, they would

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Speaker 1: suggest that they've probably done that. If you the one

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Speaker 1: thing that the A, B and Z has managed to

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Speaker 1: do is that they are starting to stifle things. They

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Speaker 1: are slowing down consumer consumption and if you look at

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Speaker 1: you know, the end Z data that's coming out, it

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Speaker 1: is really falling and falling quite hard. Housing is falling

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Speaker 1: at the fastest rate we've seen in many, many years,

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Speaker 1: consumptions falling the fastest rate manimi is an unemployment is

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Speaker 1: starting to tick up. Now that all put that together

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Speaker 1: is is why you hearing from from doctor or that

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Speaker 1: they are suggesting there at the end of the cycle.

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Speaker 1: The question has always been as whether or not they

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Speaker 1: went too hard, too fast, and whether they've created a

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Speaker 1: bit of a jolt and a crash scenario that is

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Speaker 1: possibly playing out again. If you look at results that

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Speaker 1: are coming out across New Zealand and then here to

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Speaker 1: us in Australia, the New Zealand businesses of most companies

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Speaker 1: are the ones that have really suffered in the last

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Speaker 1: six months and they all point down to the idea

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Speaker 1: that rape rises have caused this. So from an rb

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Speaker 1: A perspective, bringing back to what goes on in Martin

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Speaker 1: Place in Sydney, they are certainly very cognizant of overtightening.

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Speaker 1: The suggestion is that they probably won't go as hard

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Speaker 1: as what you're looking in the US or what you're

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Speaker 1: looking in probably in the UK and also in Europe.

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Speaker 1: So the RBA is a little bit different. I think

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Speaker 1: they've gone slowly and are very much waiting to see

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Speaker 1: how their impacts are having they have more meetings so

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Speaker 1: they can actually do it slower and a much more

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Speaker 1: steady pace, almost at a time, Evant. But I know

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Speaker 1: you've been looking closely at earnings and Quantis yesterday announced

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Speaker 1: that buyback plan. Does that make sense? It makes sense

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Speaker 1: to them, It doesn't necessarily make sense to the market.

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Speaker 1: And what I mean by that is it's the right time.

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Speaker 1: Four million dollars buyback when the price was at four

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Speaker 1: dollars twenty five. It wasn't five dollars in April this year,

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Speaker 1: so it's cheap. It makes sense. They are all about

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Speaker 1: trying to do capital preservation and capital management. Why I

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Speaker 1: say that from the market perspective is that their service

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Speaker 1: has been a massive problem for them. Plus it doesn't

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Speaker 1: look great. The government here in Australia was one of

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Speaker 1: the largest bailouters of quantas over the last three years

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Speaker 1: from the COVID crisis, and then to be doing this

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Speaker 1: at this point in time when they have clearly been

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Speaker 1: supported by government doesn't necessarily sit well with the public,

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Speaker 1: but it does make economic sense. All right, Evan, great

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Speaker 1: to have you on. Thank you so much. Evan, Lucas,

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Speaker 1: chief market strategist at Investment, on the line from Melbourne

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Speaker 1: for us here on Bloomberg Debreak Asia