Speaker 1: All right, let's get to our guess now it's definitely
Speaker 1: holds yen ce io apack at Deutsgia Bank International private bank,
Speaker 1: and pick up there on what we are seeing with
Speaker 1: the energy crisis deepening in Europe and leaders really scrambling
Speaker 1: to deal with that. How much of it is a
Speaker 1: concern here is that this could push us into a
Speaker 1: global recession. There's a lot of concern of course, UM,
Speaker 1: maybe not in regards to a global recession right away,
Speaker 1: but for sure if we look at Europe, we have
Speaker 1: been working on the assumption so far that Russia would
Speaker 1: not switch off nord stream UM forever, you know, not
Speaker 1: giving away this leverage they had in their hands. But
Speaker 1: now it's been made quite clear that they have been
Speaker 1: UM connecting the sanctions to their inability to repair and time.
Speaker 1: And therefore, um, you know, we have to assume that
Speaker 1: maybe that pipeline um techniqual isia will persist and we
Speaker 1: won't get North Stream back to where it was before,
Speaker 1: which was already be low capacity. So so far, UM,
Speaker 1: our assumption was that we may have a mild recession
Speaker 1: in Europe. But of course if um you know the
Speaker 1: underlying UM assumption on that changes. Um, it will look
Speaker 1: like more of a severe recession scenario. And of course
Speaker 1: that's very wearing. And of course yes it has global implications. UM.
Speaker 1: China is the main trading partner to Europe. UM. If
Speaker 1: EU rober sliding into recession, Um, not just China, you're
Speaker 1: the U S. Everybody else will of course be impacted.
Speaker 1: What does it mean for the A c B. You're
Speaker 1: saying they will continue with rad hikes here. Yes, well,
Speaker 1: we are already have seen quite a reprising last week
Speaker 1: UM on the E c B, more on the back
Speaker 1: of UM Council official commentary than what has transpired over
Speaker 1: the weekend on the energy side. But I guess it's
Speaker 1: just this energy situation is just exacerbating the problem. Um. UM,
Speaker 1: So seventy five um, sorry, seventy five basis points hike
Speaker 1: look very much on the card on Thursday, and UM,
Speaker 1: well they have been stepping off their forward guidance. But
Speaker 1: we would expect to get a bit of a clearer
Speaker 1: idea on Thursday as towards the path ahead. Most probably
Speaker 1: that would be more on the hawker side, all right.
Speaker 1: And moving to the FED now as well, you're saying
Speaker 1: they're expecting to remain hawkish when we look at what
Speaker 1: we saw in their jobs numbers. I mean, it's still
Speaker 1: a pretty strong labor market, still a very strong dollar
Speaker 1: as well. How much further tightening do you expect from
Speaker 1: the Fed? You well, to be honest, I saw some
Speaker 1: of soft lending hints as well in these labor market report.
Speaker 1: But then of course the drolls data show still strong
Speaker 1: drop opening. So you have that mixed bag. And given
Speaker 1: what we learned, the Jackson home was probably as much
Speaker 1: as one lower CPI print also a bit of a
Speaker 1: softer data set um from from the employment market, most
Speaker 1: probably won't derail the FED from their path to just
Speaker 1: frontload as much as they can there it hiking path. Well,
Speaker 1: we have a bit of more commentary ahead of the
Speaker 1: CPI next week on the thirteen UM out of the
Speaker 1: US before we go into blackout and then into the
Speaker 1: next f WORMS meeting on the twenty one. But I
Speaker 1: guess that repricing is uh has happened, and its correct
Speaker 1: to assume there will be more coming and more hawker
Speaker 1: is tonality from the FED um as we see data
Speaker 1: stay that way and not convincingly shift the other way around.
Speaker 1: So we saw about a four percent drop in the
Speaker 1: SMP five in August, following that big drop that we
Speaker 1: saw in June as well, which was kind of a
Speaker 1: guess reversed by those July gains. Where do we trade
Speaker 1: for the rest of the year. I know that you're
Speaker 1: positive on energy and healthcare. Yes, Um, Actually, Um, there
Speaker 1: is a fine balancing act of course that we'll need
Speaker 1: to be delivered by the FED, but so far we're
Speaker 1: still working on the basis that it will be only
Speaker 1: a mild resaction, and consequently, also the asset um reprisings
Speaker 1: that will have to happen won't see um, you know,
Speaker 1: massive sell offs. Then of course, UM almost probably have
Speaker 1: a difficulty t recover before we see the reality kicking
Speaker 1: in with the October earnings from the US. I think
Speaker 1: the market is very well expecting that those will have
Speaker 1: more of a reality check in regards as to how
Speaker 1: the economy is doing. China is going to accelerate its
Speaker 1: stimulus rollout in the third quartermaking moves to defend the
Speaker 1: one as well. When do we see a tipping point
Speaker 1: for better growth recovery in China? Well, that that's an
Speaker 1: excellent question, you know, UM, We've been talking to each
Speaker 1: other over the past month, and I've been always a
Speaker 1: bit more optimistic on China compared to the rest of
Speaker 1: the street. UM look like that the global headwinds and
Speaker 1: also all the news around the property sector has been
Speaker 1: depressing sentiment again UM on asset prices and UM of
Speaker 1: course UM with the incoming data being still depressed because
Speaker 1: of the COVID policy being followed to the you know,
Speaker 1: to the strangest requirements. It's UM. It's a situation where
Speaker 1: most probably we will have to defer this view of
Speaker 1: getting more cautiously optimistic into the fourth quarter rather than
Speaker 1: the third quarter. But I think because UM, you know,
Speaker 1: we have been opening a bit more positive today and
Speaker 1: I think it's really down to UM the resolve from China.
Speaker 1: We had these news that they totally understand they need
Speaker 1: to put everything in the third quarter or as much
Speaker 1: as possible in terms of the infrastructure and fiscal support
Speaker 1: their planning. They have already had lower interest rates before,
Speaker 1: and now they've also shown us that with UM taking
Speaker 1: the reserve requirement for ethics deposits down from eight to
Speaker 1: six percent, that they're also showing resolve and not letting
Speaker 1: the yuan depreciate to an extent that this will have
Speaker 1: more UM outflows out of the country. What do you
Speaker 1: think in terms of whether or not it's it's right
Speaker 1: to invest into China heading into the latter part of
Speaker 1: the year. Morgan Stanley saying yesterday they expect consensus earnings
Speaker 1: downgrades to continue into the fourth quarter. Yeah, well, if
Speaker 1: you haven't been invested in China at all, there's obviously
Speaker 1: a few sectors to um UM to not look into,
Speaker 1: for instance, properties UM and then UM. It's important to
Speaker 1: UM start scaling in UM in a cautious way. You're
Speaker 1: cautious manner. But if you have been investing so far
Speaker 1: as we have been doing for our clients for instance,
Speaker 1: we're just looking for opportunities and we keep in liquid
Speaker 1: alternostitatives to be able to to make those moves. So
Speaker 1: it's UM that turning point everybody is waiting for most
Speaker 1: probably it doesn't come at a switch. It is something
Speaker 1: that you have to, you know, approach UM step by step,
Speaker 1: and these valuations obviously already are quite interesting. We are
Speaker 1: waiting to see Japan fully open to tourism. I mean,
Speaker 1: that's something that I think the world is kind of
Speaker 1: opening waiting for the end One forty I think Goldman
Speaker 1: SAX saying could get to one forty five. How attractive
Speaker 1: a Japanese equies. Yeah, we have recently and that is
Speaker 1: a very technical UM notion. UM actually taken up and
Speaker 1: overweight in the Japanese equity sector. UM and at the
Speaker 1: same time having reduced that A X J overweight we
Speaker 1: had before UM, just in terms of timings to to
Speaker 1: look at. You know, if especially the end trajectory stays
Speaker 1: the way it is, most probably it's something that will
Speaker 1: benefit that equity outlook even more. And then as we
Speaker 1: heard already, we have all these news in terms of reopening.
Speaker 1: It's cautious, of course, but it looks like we would
Speaker 1: see a different style in terms of COVID management going
Speaker 1: forward and the tourism to be able to pick up
Speaker 1: on the back of it. What's the Australia picture look
Speaker 1: like for you? We're looking at potentially a fourth half
Speaker 1: point high from the RBA, but there's been in some
Speaker 1: pretty strong company earnings there well personally, UM, that's uh,
Speaker 1: you know, we're just ahead of that decision that I
Speaker 1: was actually expecting. UM. Given that the A B A
Speaker 1: A B A has already UM guided us that maybe
Speaker 1: they take the foot of the paddle a little bit,
Speaker 1: um that this won't be a fifty basis points hike,
Speaker 1: but maybe less. But maybe it's fifty basis points with
Speaker 1: the according language around it. So I also, as you said,
Speaker 1: you know, earnings are in a different are coming in
Speaker 1: slightly strong. We had already quite a sizeable correction on
Speaker 1: the housing market. You know, maybe now is the time
Speaker 1: in the light of this to um go off the
Speaker 1: paddle a little bit and very excited to see how
Speaker 1: it will turn out today. All right, thank you so
Speaker 1: much as always for your time. Stephanie Holtz and ce
Speaker 1: io a pack at dertgea bank international private bank with
Speaker 1: US