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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: He's a Bloomberg Business Flash and I'm Karen Moscow and

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Speaker 1: the Bloomberg Futures Report brought to you by Interactive Brokers

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Speaker 1: CME Group U stock index futures are rising, signaling the

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Speaker 1: S and P five hundred well snap a two day

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Speaker 1: to kline and rebound from a three week low to

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Speaker 1: submit earning said beat analysts, estimates and advance and oil prices.

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Speaker 1: We checked the markets every fifteen minutes throughout the trading

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Speaker 1: day on Bloomberg SNP eveny futures of five points DOWNI

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Speaker 1: Mini futures up thirties three, NASA Docimuni futures up ten.

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Speaker 1: The decks in Germany now a little changed ten, Your

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Speaker 1: treasury down one thirty second, the yield one point seven

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Speaker 1: eight percent, NIMEX scrude oil of four and a quarter

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Speaker 1: percent of a dollar eighty five to forty five sixty four,

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Speaker 1: A barrel comes gold up nine tenths per cent or

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Speaker 1: eleven dollars fifty cents the euro at dollar fourteen eight

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Speaker 1: b and when oh six, that's a Bloomberg business flash.

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Speaker 1: Tom and Mike Karen thank you so much, greatly appreciate that.

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Speaker 1: Michael McKee a massive shout out to someone that gives

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Speaker 1: us important retail perspective. Bert Flickinger, who is just treasured

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Speaker 1: for his granular knowledge of retail, has also given me

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Speaker 1: new granular knowledge of the Minnesota Vikings. I don't even

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Speaker 1: know what to make of this research. Note we won't

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Speaker 1: spend a lot of time on this, but I'm smarter

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Speaker 1: about the Minnesota Vikings than it was this morning with

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Speaker 1: Brian Belski where we check their draft picks. Brit Flickinger,

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Speaker 1: thank you so much for making us wiser. Win Thin

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Speaker 1: will make us wiser with Brown Brothers Harriman on emerging markets,

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Speaker 1: when it's wonderful to have you in here. Let let

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Speaker 1: me go back to your academics at Columbia. Are we

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Speaker 1: at risk of a brutal move in currencies like plaza

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Speaker 1: or Reuben dollar late nineties? I mean, where where are

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Speaker 1: we in terms of brutal within your word. I guess

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Speaker 1: it depends what country you ask um to me, you know,

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Speaker 1: there's been a lot of inks build about some sort

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Speaker 1: of secret chords and whatnot. But you know, I think

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Speaker 1: at this point it's really pretty much every man from self.

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Speaker 1: I think there's there's really very little coordination really going on. Um.

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Speaker 1: You know, I think every country is coming under pressure

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Speaker 1: or criticism. Most are not except perhaps the exception of

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Speaker 1: Japan and most of the G ten and not really

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Speaker 1: targeting the exchange rates and the running very loose policy.

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Speaker 1: We exchange rate as part of that. So we're seeing

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Speaker 1: big swings in the dollar obviously the last several years.

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Speaker 1: I think that the days of of volatility are going

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Speaker 1: to be with us for a while. Well, we're seeing

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Speaker 1: that right now in uh certainly an Asian markets. We've

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Speaker 1: seen the emerging markets, they're royaled. In the last couple

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Speaker 1: of days. Is these FED speakers have come out and

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Speaker 1: suggested US rates might go up. Uh, so much talk

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Speaker 1: about how this is not but you're still seeing the

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Speaker 1: same kind of market reaction. Yes, I think to me,

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Speaker 1: the one we know that a fat tightening cycle is

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Speaker 1: always very discrtive for emerge marks, and that's I think

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Speaker 1: that's why why they're really quite defensive right now. But

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Speaker 1: the big difference between now and is that most of

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Speaker 1: the pegs are gone, and to me that the fact

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Speaker 1: that these currents are allowed to weaken and weaken over

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Speaker 1: time is much better than having one big sort of

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Speaker 1: floodgate open collapse in the currency. So it's a shock absorber.

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Speaker 1: I think the floating exchange rate the world is good

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Speaker 1: for the most part. UH. It's a shock absorber that

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Speaker 1: allows these countries through adjust in terms of trade movements,

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Speaker 1: shifts and such and whatnot. So to me, yes, the

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Speaker 1: weaker currencies are are worrisome for the debt servicing, etcetera.

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Speaker 1: But the fact that's being done in a gradual and

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Speaker 1: somewhat you know, sort of piecemeal fashions is better than

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Speaker 1: a big breaking of a peg. Are there any of

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Speaker 1: those that you worry about uh x FED Uh? The

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Speaker 1: South African rand obviously has been a major issue UH

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Speaker 1: on its own. You see problems in Malaysia with the

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Speaker 1: ring it are Are those currencies still something to worry

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Speaker 1: about outside of the FED? Absolutely? I think that that's

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Speaker 1: the one thing that's I think come to the forefront.

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Speaker 1: You know, we had his tenure commodity boom in merge

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Speaker 1: markets when everyone just took a grant that fundamentals were great,

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Speaker 1: everything was getting better. And now that the commodity boom

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Speaker 1: was over all, the sort of the warts and whatnot

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Speaker 1: are being exposed. So political risk was overlooked during that

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Speaker 1: tenure boom. Now it's coming back. We've got as you mentioned,

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Speaker 1: Malaysia political risk with one m dB um, South Africa

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Speaker 1: political ris, corruption President Zuma, Brazil. We obviously we know

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Speaker 1: the the impeachment Poland Turkey, and it's all it's all

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Speaker 1: coming to the forefront. Your colleague Mark Chandler quoted in

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Speaker 1: the n f T this morning, if we see a

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Speaker 1: seven percent decline in a d X, why the blended

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Speaker 1: Asian currency index ex Japan, the low is eleven percent

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Speaker 1: declined from an arbitrary peak. Great. Is it gonna be

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Speaker 1: about e M weakness or is it gonna be about

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Speaker 1: dollar strength? When you pull all the other currencies in,

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Speaker 1: I'd say it's all of the above. Um. You know,

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Speaker 1: we have a pause in the dollar rallies once remember

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Speaker 1: you're looking for strong dollars, yes, across the board. Um,

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Speaker 1: but you know especially more so in an emerge Marx.

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Speaker 1: It seems to be like turbocharged central bankers affect that

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Speaker 1: BBH call. Can they get in the way of a

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Speaker 1: strong dollar manipulated policy to lessen the strength of dollar?

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Speaker 1: I don't think so. What's really hurt the dollars is

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Speaker 1: not manipulating it, but the fact that we in UM

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Speaker 1: this year we've gotten much more doubish FED. Remember we

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Speaker 1: started the year the Fed, it just hiked in December.

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Speaker 1: People are talking about two or three four way tycks

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Speaker 1: this year, and then all of a sudden in March

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Speaker 1: Mr Yellen just pretty much put put a stop that talk.

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Speaker 1: She's very doublish in that Economic Club talk. The FMC

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Speaker 1: meeting the week after, she doubled down on it. And

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Speaker 1: that's been the biggest impediment to the to the stronger

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Speaker 1: dollar story. Everyone had the diversion story, Feds hiking, e

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Speaker 1: C B, B o J easing. We think that's still

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Speaker 1: in play. The Fed is still hiking, not as much,

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Speaker 1: but we still have the e C B N bo

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Speaker 1: J is still pushing on the gas pedal. So I

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Speaker 1: think the version story is still there, It's just not

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Speaker 1: quite as long as that. You still the FEDS rates

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Speaker 1: on December sixteenth, and the dollar went down before Jennet

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Speaker 1: Yellen spoke. While there's always the sort of by the rumor,

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Speaker 1: sell the fact risk, but remember the dollar will ride

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Speaker 1: if they raise in June, the dollar will get stronger.

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Speaker 1: Right If you look at the Fed funds futures market

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Speaker 1: right now, people are pricing basing zero risk of a

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Speaker 1: June hike one hike by the end of the year,

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Speaker 1: where I think it's very defish. You know, if you

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Speaker 1: look the jobs market, we're still creating two hundred plus jobs,

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Speaker 1: two thousand plus jobs a month um us a column.

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Speaker 1: We had a soft spot in Q four, maybe Q

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Speaker 1: one as well, But I do think that the Fed

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Speaker 1: is is prepared at the hike in June. That's that's

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Speaker 1: still at base case. Your base case is hi. Yes,

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Speaker 1: what do you need to happen in the jobs report

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Speaker 1: tomorrow to validate and and enhance that call? Obviously a

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Speaker 1: two handle plus good, But importantly, I think the missing

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Speaker 1: piece that we've seen that we're missing is the wages agreed,

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Speaker 1: the average our earnings sorting the two two and a

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Speaker 1: half ish range. Obviously something the high twos would be

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Speaker 1: more compelling. For the FED uming fascinating, I'd say the

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Speaker 1: one caveat. And this is why it makes I think

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Speaker 1: FED watching is so much more difficult. The FED is

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Speaker 1: putting much more weight on global developments. Now remember this

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Speaker 1: that used to be in the old the FED would

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Speaker 1: run too possibly US economy. Let's come back and talk

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Speaker 1: about that win thin with us with Brown brother's harem

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Speaker 1: and thrilled to have him in uh to speak here

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Speaker 1: to blend in all of international economics. You just heard

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Speaker 1: him say that about the central banker of the world,

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Speaker 1: Cherry yelling it is Bloomberg's surveillance. We say, good morning.

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