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Speaker 1: All right, let's get over to our next guests, Henrietta

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Speaker 1: Pacmont ahead of Global Fixed Incument all Spring. Anyways, so

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Speaker 1: thank you so much for joining this. I mean asking

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Speaker 1: this question that bonds now in the US I'm looking

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Speaker 1: at also obviously you look at the duration here as well,

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Speaker 1: representing a buying opportunity. Well, they're suddenly looking a lot

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Speaker 1: more interesting than they have in years. Um. So yes,

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Speaker 1: I would say that this is an area to start

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Speaker 1: looking at. Um. And you know, if you look at

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Speaker 1: investment grade bonds, you're over five percent now, Um, that's

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Speaker 1: a case in the UK as well, and even on

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Speaker 1: the European side, you've got your investment grade credit heading

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Speaker 1: towards four percent at this juncture. So it would be

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Speaker 1: it would be tempting to buy the two year at

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Speaker 1: four point one two. But obviously you're you're basically losing

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Speaker 1: money over these two years because the inflation rate is

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Speaker 1: higher than that. But I guess in today's day, losing

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Speaker 1: less money is better than losing a lot of money. Um.

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Speaker 1: And I think that that you've called it right there. Um.

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Speaker 1: You know, we are in an interesting situation where, um,

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Speaker 1: you know, the message this week is that central banks

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Speaker 1: as serious about dealing with inflation. UM. And what the

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Speaker 1: moves that we're seeing in the markets a testimony to that. UM.

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Speaker 1: And that's going to have an impact on growth, and

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Speaker 1: that's going to have an impact on the economy. UM.

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Speaker 1: So they're looking to slow down the economy. We're going

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Speaker 1: to have to see by how much UM so UM

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Speaker 1: it is a question of looking at pockets of opportunity

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Speaker 1: at this juncture. It also have to be fairly confident

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Speaker 1: that the dollar can maintain its gains as well. UM.

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Speaker 1: That you know, the currency moves that we've seen this

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Speaker 1: year have been quite extraordinary, and we are seeing king

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Speaker 1: dollar at the moment, and and we've been respecting that

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Speaker 1: that dollar strength. UM. It's there for a reason UM.

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Speaker 1: And I absolutely UM. It will be interesting to see

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Speaker 1: if if that holds. UM. And it's been interesting to

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Speaker 1: see UM in the last couple of days. UM it's

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Speaker 1: starting to be a topic. UM. We've seen Japan move UM,

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Speaker 1: We've seen disappointment post the grate hike in the UK

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Speaker 1: and the impact that that's had on sterling. UM. Say, yes,

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Speaker 1: currency is a is a consideration and what you do

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Speaker 1: with it, UM, and whether hedge it or not so

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Speaker 1: if you know, with fixed income, you do have to

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Speaker 1: pay a lot of attention to the currency. You know,

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Speaker 1: Warren Buffett famously doesn't like bonds because he's concerned about

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Speaker 1: their currency fluctuation. In Japan, they intervene, which okay, we

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Speaker 1: have seen a move in the END weaker against the dollar,

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Speaker 1: but all it would have to do is adjust the

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Speaker 1: yield curve control program. Yields would shoot up in the

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Speaker 1: currency would too, So it's it's a it's a little

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Speaker 1: funny to intervene on one side when you could actually

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Speaker 1: do it and not call it intervention on another side. Absolutely,

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Speaker 1: for that would be a big step for Japan and

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Speaker 1: what would be the impact of that, And some people

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Speaker 1: say that could could really be a complete and total

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Speaker 1: shock to the global bond market. I think it would

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Speaker 1: be a shock to the global markets, um if it happened. Um.

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Speaker 1: I don't think it would be necessarily a surprise. Um

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Speaker 1: it's something that that they wouldn't make sense. But I

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Speaker 1: think it would be a shock for sure. Well, you know,

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Speaker 1: of course, we saw the intervention by the Japanese authorities

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Speaker 1: into the currency markets to try and support the END,

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Speaker 1: to give it some more strength as it were fairly

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Speaker 1: short lived, that we are still above where we were.

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Speaker 1: That they do that, but you know, it also begs

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Speaker 1: a question, now what's the central bank doing? What is

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Speaker 1: the Bank of Japan now doing? Because I mean they

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Speaker 1: are doing the same thing over and over again hoping

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Speaker 1: for a different results, which is Einstein's definition of insanity.

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Speaker 1: Investors have been betting against the Bank of Japan for

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Speaker 1: many years. UM. I think it's a tricky one to call.

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Speaker 1: Um that being it, I mean, Japan has got less

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Speaker 1: of an inflation issue than other geographies, so at the

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Speaker 1: moment they can fall back on that. But yes, we're

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Speaker 1: seeing the currency, We're seeing the impact in terms of

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Speaker 1: global markets. UM. It is a harder position to hold

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Speaker 1: at this point. It will be very interesting to see

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Speaker 1: how it evolves. So as we look across the yield curve, generally,

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Speaker 1: where do you see the most value? I mean you've

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Speaker 1: talked about the short US rates. UM, I think that

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Speaker 1: is an interesting interesting place to look. UM. We a

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Speaker 1: fair amount is now pressed in UM in that that

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Speaker 1: area of the of the market. UM. I touched on

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Speaker 1: investment grade. I think again, credit, I think that's another

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Speaker 1: area to look at. UM. Nice combination there because you've

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Speaker 1: got a bit of protection because rates have gone up

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Speaker 1: on the on the government side, spreads have also widened.

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Speaker 1: Um So with sort of concerns building about global growth, UM.

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Speaker 1: That that gives an extra bit of Christian as well

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Speaker 1: to to to look at. So these are areas of

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Speaker 1: the market that that are of interest. UM. The other

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Speaker 1: thing to denote, and we've seen a number of emerging

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Speaker 1: markets be a lot more proactive actually than than their

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Speaker 1: developed markets counterparts, UM, in terms of raising rates UM.

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Speaker 1: And they've been ahead of the game UM in that

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Speaker 1: sense in in in many geographies. UM. So I think

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Speaker 1: that's another interesting one to to look at. UM. And

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Speaker 1: you know we're talking about the dollar question mark. There

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Speaker 1: is is behavior dollar of course, UM, But I do

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Speaker 1: think it's an interesting one to watch as well. Where

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Speaker 1: is the crossover point on the yield curve if we

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Speaker 1: look at say tenure yields, you know, spiking eighteen basis points,

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Speaker 1: if they dropped eighteen basis points, that would be a

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Speaker 1: sign that people were looking at recession. Where where is

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Speaker 1: that crossover line for you for the tenure Well, I

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Speaker 1: think we've crossed it right, UM. If you look at

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Speaker 1: the shape of the curve in the us UM and

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Speaker 1: we're about forty basis points between your twos and tens

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Speaker 1: negative that that is already a reflection of what the

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Speaker 1: market is thinking in terms of great prospects. All right, Henrietta,

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Speaker 1: thank you for joining us. Henrietta Pokmont, head of Global

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Speaker 1: fixed income at all Spring with us live here,