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Speaker 1: Grace, Tom, chief investment advisor at BNP Parabat Wealth Management Grace. So,

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Speaker 1: we've seen a couple of moves here, UM. But you know,

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Speaker 1: in terms of China, they've promised stimulus so much you

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Speaker 1: wonder whether or not people will really embrace this. Do

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Speaker 1: you have any inside intelligence as to whether this time

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Speaker 1: it really amounts to something that will provide some juice

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Speaker 1: to markets? Yeah, UM, morning, UM. I think UM, the

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Speaker 1: key is still about the reopening of the economy, as

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Speaker 1: you know. UM. Rather to reopen, they actually um, I

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Speaker 1: mean put in place more COVID restrictions. UM. So I think, um, Um,

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Speaker 1: this is actually a very difficult situation because I mean

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Speaker 1: when you look at the UM consumer confidence, business confidence,

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Speaker 1: and they they're they're very weak because I mean, um,

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Speaker 1: in terms of the COVID policy, there's still a lot

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Speaker 1: of uncertainty. I be the hope for now is UM

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Speaker 1: with the twentieth Party Gone Congress going to be held

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Speaker 1: on mid October, hurtfully the political and also the policy clarity,

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Speaker 1: UM could help UM the markets after meeting. Yeah. Indeed,

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Speaker 1: And that's sort of what are M Live Pulse survey

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Speaker 1: respond It's kind of indicated that after this party meeting,

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Speaker 1: maybe the stock market starts to rebound, but the one

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Speaker 1: could continue to slide. Do you kind of take that view?

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Speaker 1: And where would you be looking for upsideing equities if

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Speaker 1: that is the case. UM, I think given UM the

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Speaker 1: economy still are weak, especially UM the property market, UM,

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Speaker 1: it could UM stay weak for for longer. UM I

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Speaker 1: a weaker U N Actually UM it is actually bit

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Speaker 1: free for the economy. And also when you look at

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Speaker 1: the currency UM, I mean the other current to see

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Speaker 1: natures they all like UM continue to weaken because UM

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Speaker 1: the this severear yanks weaknesses. So UM in terms of

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Speaker 1: like UM compative competitiveness, UM, the UN is actually good

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Speaker 1: to have some depreciation to Having said that, obviously UM,

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Speaker 1: the Chinese governments they don't want to see UM like

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Speaker 1: this all very depreciation of the yin UM. They want

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Speaker 1: some order lease or slow depreciation. And there's also good

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Speaker 1: for for the exports UM. So I think um uh,

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Speaker 1: there there's a chance for the yend to to break

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Speaker 1: the seventh level. That's not really UM immediately as you

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Speaker 1: can see, like UM yesterday's UM they cut the triple

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Speaker 1: out for the for the for eggs UM this is

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Speaker 1: actually indicated they want slow decretiation instead of in this

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Speaker 1: orderly depreciation. To to a certain degree, Chinese citizens are

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Speaker 1: somewhat shielded from the weakness in the you on and

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Speaker 1: that it may not cause inflation as much as it

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Speaker 1: would be in other places. And there is this interesting

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Speaker 1: phenomenon which you could talk about as the opposite of

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Speaker 1: pulling forward demand. You'll actually see a situation at some

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Speaker 1: point when the COVID lockdowns get removed, whether it's um,

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Speaker 1: you know later this year early next year, where you

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Speaker 1: might see revenge spending. But then there's the property, the property,

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Speaker 1: there's the problem of the property crisis holding consumers back. Yeah, UM, exactly. Yeah.

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Speaker 1: So I think UM, first of all, as you mentioned,

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Speaker 1: the key is when UM it's the economy going to

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Speaker 1: be really open UM. I think UM, this is this

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Speaker 1: is this is really the key. And because I mean

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Speaker 1: it's going to reopen UM, you you will UM anticipate

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Speaker 1: lh pan up demon and that could drive the economy.

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Speaker 1: But at the same time, as mn UM the journal environment,

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Speaker 1: especially for like you as your UM, the risk of

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Speaker 1: the recession actually is getting higher and higher. That could

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Speaker 1: hurt UM the external demand. So I think UM it's

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Speaker 1: really um the key if they can reopen UM domestically

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Speaker 1: and then the economy could be UM chosen by UM

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Speaker 1: domestic consumption or or the domestic effects at their infrastructures

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Speaker 1: and their increstment in effectual Yeah, at tenth to day,

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Speaker 1: their grace of the stronger than expected bias with the

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Speaker 1: p BOC fixed. I mean, just tell us what your

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Speaker 1: view is here of the PBOC really trying to stem

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Speaker 1: this weakness. Yeah, I think, um, yeah, they're trying to

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Speaker 1: slow down the depreciation UM just like I mean, detect depreciation.

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Speaker 1: They're actually good UM for the economy, but I think

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Speaker 1: they also worry about in this orderly the depreciations will

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Speaker 1: actually UM drive more like actions from the country. Given

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Speaker 1: your cautious stance here at the moment on on basically UM,

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Speaker 1: most of the regions of the United States and your

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Speaker 1: European region as well. Are you at all concerned that

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Speaker 1: that the feed in from Wall Street could be pretty

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Speaker 1: negative here in the coming period because you'll get traders

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Speaker 1: coming back from holiday. It's sort of the end of

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Speaker 1: the summer, and right now the outlook in Europe is

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Speaker 1: is so weak and even in the US with growth

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Speaker 1: slowing and and the FED being so active that we

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Speaker 1: could be getting some negative inputs here soon. Yeah. I

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Speaker 1: also think UM in terms of the regional outlook, I

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Speaker 1: think UM, the keys UM, the U s foller UM.

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Speaker 1: If the US dollar continue to strengthen, UM, that's actually

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Speaker 1: up that needs UM for the Asian although outlook, and

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Speaker 1: even UM when you look at um um the past

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Speaker 1: UM sometimes UM what the continue strength meets of the

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Speaker 1: year dollar we could see like credit events in some

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Speaker 1: of the region market. So this is not really UM.

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Speaker 1: It's a good needs for y M or or Asia.

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Speaker 1: UM that happens that that um UM. I think it

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Speaker 1: really depend on how aggressive UM the fad is going

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Speaker 1: to hide. Interest rate a lot actually already pricing in.

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Speaker 1: So I mean if especially for the August UM EPI data,

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Speaker 1: which we see the trend of declining, we may see

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Speaker 1: UM some slowdown in pays or or smaller rate hike

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Speaker 1: in September meeting or even like November or December, I

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Speaker 1: think UM, we may we may see the peak of

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Speaker 1: the dollar. Let's talk about the yen, because that is

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Speaker 1: another currency is weakening amidst this dollar strength and interest

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Speaker 1: rate differential. We did hear from an ex official from

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Speaker 1: the Bank of Japan saying that they should avoid raising

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Speaker 1: interest rates for now. So with that in mind, and

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Speaker 1: if we do continue to see this accommodative stance, how

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Speaker 1: much for the weakness do you see in the end? Yeah?

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Speaker 1: I think um um is what they said, Um the

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Speaker 1: interest rate UM differential. Actually we drive the end weaker.

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Speaker 1: And especially for the d o J. They don't have

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Speaker 1: any plan um to to take him any time soon

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Speaker 1: and um our expectation as um they won't um. I

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Speaker 1: mean they were just kick their like eating biased for

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Speaker 1: this year or even like next year and kill um

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Speaker 1: the next leadership um comes up um, I mean around

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Speaker 1: around spling. I got in a little bit of a

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Speaker 1: tussle with a guest earlier this morning on the show

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Speaker 1: because the guest was complaining about about policy coming from

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Speaker 1: both Europe and the United States. Uh. And you know

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Speaker 1: we were talking about, you know, Russia's invasion of Ukraine

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Speaker 1: was really at the root of the energy crisis in

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Speaker 1: Europe and whether or not. Uh. He felt that that

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Speaker 1: he felt actually the policy, that American policy and European

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Speaker 1: policy was the cause. And I suggested that it was

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Speaker 1: more Vladimir Putin sending tanks into the Ukraine. Would you

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Speaker 1: like to see the West get tougher on Russia here

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Speaker 1: or the reverse? UM. I think it is very UM

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Speaker 1: difficult to um predict uh because that's UM, that's politics

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Speaker 1: UM that I think UM. And then in the near term,

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Speaker 1: especially UM for Europe. UH, the k UM the energy

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Speaker 1: crisis actually UM could drag the economy into into recession

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Speaker 1: and we we actually expect a recession in the winter.

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Speaker 1: But the positive news is um uh when you looked

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Speaker 1: at the the energy stolish in Europe is actually filling

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Speaker 1: up quite quickly until now it's like our h D

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Speaker 1: two ninety percent and this is skymosopously UM. But the

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Speaker 1: but the key is how cool will the winter? Bet

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Speaker 1: it is much cooler than of history. UM, need more energy,

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Speaker 1: but it's not that cold and it's then it's okay

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Speaker 1: for the for Europe and UK. Alright, Grace, thank you. Grace,

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Speaker 1: Tom chief investment advisor at BMP Parable Wealth Management, Hong

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Speaker 1: Kong with us from Hong Kong here on Blomberg debrac

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Speaker 1: Asia