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Speaker 1: Let's get to our guest. It's Mark Chandler, chief market

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Speaker 1: strategist and managing partner at bannock Burn Global. Mark, if

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Speaker 1: you're right that the dollars bull market is over and

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Speaker 1: if the dollar is easing from here, that that should

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Speaker 1: add to people taking on more risk. However, what we're

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Speaker 1: seeing right now is um you know, we're really seeing

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Speaker 1: equity markets tank here going into the end of the year.

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Speaker 1: Do you think that changes soon or is is that

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Speaker 1: a trend that continues. I say two things. Thanks a

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Speaker 1: lot for having me, But first I say that the

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Speaker 1: I think that we're seeing a lot of just position

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Speaker 1: charning right now. And you're right, the stock market looks

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Speaker 1: heavy going into the year end, no Santa Clause rally.

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Speaker 1: But at the same time we're seeing is actually the

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Speaker 1: dollar is strengthening. And so what I think happened is

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Speaker 1: that in the fourth quarter is just an amazing quarter

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Speaker 1: for the dollar, pour for the dollar. Almost all of

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Speaker 1: G seven G ten currencies except the Canadian dollar rose

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Speaker 1: by more than five percent against the greenback, and so

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Speaker 1: will the green back now. I think it is just

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Speaker 1: technically correcting into the year and maybe even in the

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Speaker 1: early next year. I think it was seeing the same

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Speaker 1: thing the stock market, that the thing that's helping the dollar,

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Speaker 1: same thing going on the stock market that's been a

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Speaker 1: big jump in interest rates. Well, Mark, I found it

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Speaker 1: quite instructive and interesting that in September when we saw

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Speaker 1: the probably sterling at its lowest abb that you were

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Speaker 1: calling the whole situation that with the Shenanigans, And I said,

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Speaker 1: the general incompass as received by many analysts of the

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Speaker 1: British government, that you're calling it brittally. What happens next? Yeah,

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Speaker 1: I was kind of like shocked for me the the

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Speaker 1: whole idea of the Economist magazine calling it goodly. And

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Speaker 1: I was on a I was on a show radio

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Speaker 1: show out of the US with Tom Keane and people

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Speaker 1: were talking about UH sterling as being an emerging market currency,

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Speaker 1: and to me, that's a reflection of extreme that market

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Speaker 1: psychology gets in the market sometimes extreme turning points. So

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Speaker 1: a lot of people are and they're still talking about

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Speaker 1: a test on parity for sterling given the five to recessionists.

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Speaker 1: So the Bank of England's predicting. I think that the

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Speaker 1: same kind of thing that UH we see generally with

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Speaker 1: the dollar, that is sterling went from one h three

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Speaker 1: fifty to almost one, and so it's consolidating now around one.

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Speaker 1: I can see a couple of another center, so pull back.

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Speaker 1: But I think that next year is going to be

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Speaker 1: one in which three dollar generally weakens. So does that

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Speaker 1: mean that you think that even the selling and equity

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Speaker 1: that this has gone a bit too far, our investors

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Speaker 1: just acting a little too pessimistic. I don't know. I

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Speaker 1: mean the equalities to me that it's almost if they're

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Speaker 1: different animals than for an exchange, and so the risk

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Speaker 1: off sentiment. I think what makes it different is that

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Speaker 1: this so think about what happened this year. US economy

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Speaker 1: contracted first half, Let's come back stronger the second half.

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Speaker 1: And I think many people are looking for the exact

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Speaker 1: opposite in three, where you get a stronger US economy

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Speaker 1: in the first half, and then the culmination of the

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Speaker 1: feder eight hikes. Uh, the consumer being capped out, the

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Speaker 1: cost of living squeeze all pushes the US economy in

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Speaker 1: the recession in the second half of the year, and

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Speaker 1: so I think that's gonna be hard for for a

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Speaker 1: lot of people. Look at the stock market, some some

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Speaker 1: relationship pe ratios. I think it's a very hard game

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Speaker 1: to play. Now when when you look at that as well,

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Speaker 1: you know what about the bond market, I mean there's

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Speaker 1: a lot of juice that is their value, though I

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Speaker 1: think that's always seeing now, you know, uh, since the

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Speaker 1: Bank of Japan surprised the market, but even really before that,

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Speaker 1: let me take a look at like uh e CB

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Speaker 1: hawkishness relatives to fed leguard. The e CD president has

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Speaker 1: traffically pre committed the ECB to another fifty basis point

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Speaker 1: rate high in early February, and the market is betting

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Speaker 1: there'll be another fifty basis points behind it. And so

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Speaker 1: I do think that there's been this big adjustment and

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Speaker 1: interest rates with your the spreads between the US and

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Speaker 1: Europe really closing. One of the ones I tracked for

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Speaker 1: the euro dollar relationship is the US German two year

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Speaker 1: in a streight differential that I had anticipating the peak

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Speaker 1: before the Euro bottomed, and that peak, that spread peak

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Speaker 1: almost say two basis points back in August. Euro bottoms

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Speaker 1: in late September, and that spread now the US, that

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Speaker 1: supreme has fallen by a hundred basis points. So if

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Speaker 1: we look into next year and you think that the

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Speaker 1: dollar does continue to weaken. What currencies in Asia in

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Speaker 1: particular look good to you? Well, I think that's a

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Speaker 1: good point. I mean because Asia is a dependent a

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Speaker 1: lot on world growth. You think about what's going on

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Speaker 1: now with South Korea and Taiwanese exports that uh, the

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Speaker 1: Alexantratos electronic goods as consumers in the US and Europe

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Speaker 1: shift away from goods to services, really seeing the exports

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Speaker 1: collapse in South Korea and Taiwan. But I think that

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Speaker 1: the it's interesting that the South Korean currency has begun

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Speaker 1: strengthening with the help of it looks like South Korean

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Speaker 1: officials trying to talk it higher. So think in Asia

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Speaker 1: a lot less on what happens with China. I think

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Speaker 1: that a lot of people were so critical of china

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Speaker 1: zero COVID policy because the harm it was doing to

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Speaker 1: the economy. And it turns out that they didn't use

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Speaker 1: that time or zero COVID to build up their health

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Speaker 1: care infrastructure, the public health infrastructure, So they just as

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Speaker 1: disruptive as no COVID policy was. Uh, this surge of

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Speaker 1: cases and fatalities looks like it gonna be another major

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Speaker 1: disruption that Asian economies in particular will have to sort

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Speaker 1: of navigate, especially in the first part of do you

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Speaker 1: do you think that it's what you say? It's true

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Speaker 1: they didn't use the time to vaccinate the public, but

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Speaker 1: the virus has weakened. Does that work in everyone's favor? Well,

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Speaker 1: I don't know. I mean it's weakened ye after. I

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Speaker 1: mean I was just looking at Japan has a record

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Speaker 1: number of cases now as well, and you see what's

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Speaker 1: going on, and you hear what's going on in the

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Speaker 1: US between the flu uh COVID and some kind of

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Speaker 1: upper rest spiratory issue. Uh So yeah, I'm not sure

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Speaker 1: that that we should really right off yet. But I'm

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Speaker 1: a doctor, but I don't know. I doesn't seem like

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Speaker 1: we should just right off COVID. It Like I was,

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Speaker 1: like the Chinese did this about face from say, early September.

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Speaker 1: It was a bad thing. We got a lockdown cities

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Speaker 1: and areas of cities too. It's just like the common cold.

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Speaker 1: So I don't know. I just think it's going to

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Speaker 1: be a major disruption, uh that we still are trying

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Speaker 1: to deal with through the first quarter. Yeah, so you

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Speaker 1: know where does that leave that leave the Chinese economy?

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Speaker 1: In your view? Mark and where does it levels of

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Speaker 1: the currency, and so did he economy goes? I think

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Speaker 1: that what we're gonna have, what's gonna happen, is that

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Speaker 1: China is going to uh go for really growth stimulat

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Speaker 1: similative policies uh as soon as I mean it's I

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Speaker 1: mean already beginning being able to draw down on at

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Speaker 1: tore the end of this year, being able to do

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Speaker 1: down the next year's quotas for loans. But I think

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Speaker 1: you get a real big push from the economy, and

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Speaker 1: so maybe Chinese economy strengthens, say towards a year, while

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Speaker 1: the US economy sort of rolls over a bit. When

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Speaker 1: it comes to the currency. That hard for me. You know,

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Speaker 1: I've been watching currencies my whole career, and it's hard

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Speaker 1: for me to really understand how China is able to

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Speaker 1: keep it in such uh tight rangers and stable, very

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Speaker 1: low volatility, which makes it attracted them for fund managers

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Speaker 1: my guesses, And uh is that really that right now?

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Speaker 1: China is happy to keep the currency shadowing the the

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Speaker 1: euro and the and the yen against the dollar, and

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Speaker 1: so recently in the last couple of days dollar, the

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Speaker 1: dollar has been strengthening a little bit against the euro

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Speaker 1: and yen, and I think that we're going to go

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Speaker 1: back above the dollar is gonna go back above seven

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Speaker 1: point oh against the R and B, maybe go towards

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Speaker 1: seven oh five. It's a little bit higher than that.

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Speaker 1: I think they were in a corrective phase and that

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Speaker 1: a weaker Chinese currency makes a lot of sense. Okay,

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Speaker 1: we haven't talk too much about Japan. Um Mr Yen

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Speaker 1: told our Kathleen Hayes he could see around for Dari Yen,

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Speaker 1: what are you thinking about where the end goes? With

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Speaker 1: that weakness in the dollar you're predicting again, it's really interesting.

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Speaker 1: I mean some central bank like the Federal Reserve that

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Speaker 1: criticized for being a slave to the market, and then

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Speaker 1: there's other central banks like the Bank of England and

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Speaker 1: now the Bank of Japan who seemed to want to

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Speaker 1: go out of their way to surprise the market. So

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Speaker 1: the Bank of Japan caught everybody off guard. And I

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Speaker 1: think that's when it becomes a question. You know, nobody

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Speaker 1: wants to be bitten by that same dog twice. So

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Speaker 1: that means is that because we were surprised by the

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Speaker 1: banker Japan, people don't want to be surprised again, so

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Speaker 1: the pricing in in effect that this was just the

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Speaker 1: first step of others that I mean coming in Q one.

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Speaker 1: As you know, Japan has a minus ten basis point

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Speaker 1: overnight like target rate, and the markets pricing that to

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Speaker 1: be positive by the end of Q one. I'm doubting that.

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Speaker 1: I think that the fiscal policies of the Japanese government

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Speaker 1: and go a lower inflation to jump in the dollar

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Speaker 1: to jump in the end with the dollar fire from

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Speaker 1: over one fifty count of the mid one thirties, all

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Speaker 1: going to help contain inflation. Okay, all right, Mark, thanks

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Speaker 1: very much of course, Mr young Isuke sake Kibara and

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Speaker 1: Mark Chandler's chief market strategist, a managing partner at Bannockburn

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Speaker 1: Global