00:00Let's bring in Bloomberg's Adam Linton right now and we'll start on the U.S. equity story and
00:03Anna was pointing out that volumes are going to be thin. We're getting some updates in terms of
00:07the AI story, Anthropik coming through with a new model. European stocks not far off record highs,
00:12the FTSE 100 had a really decent session, fresh record high yesterday. What are you looking at
00:16in terms of what the impulses are going to be for the equity markets today? Yeah, so you know,
00:19the price action we saw yesterday was incredibly whipsawry. I think on an intraday basis it's
00:24pretty difficult tape to read but I think, you know, what we've been talking about throughout
00:27the week very much remains in place. There's a lot of concern about the AI trade. What is this
00:31large capex spending going to result in and what are the displacement effects we're going to see
00:35in industry and who's going to get caught in the crosshairs? So, you know, when cyclical growth is
00:39relatively strong, you know, a lot of cyclical companies, people are happy just to head into
00:43those and, you know, avoid this kind of AI theme. And then from a regional perspective, you know,
00:47like I said earlier in the week, Europe's previous weakness, its lack of exposure to IT is now acting
00:51as a strength and, you know, it's been a source of attracting flows. And like you mentioned, the FTSE as
00:56well, that's another good index. It has that cyclical, that commodity exposure, a strong
01:00financial sector. And so I think until, you know, clarity on the AI displacement effect is resolved,
01:05you know, I think we'll continue to see more of this trend.
01:07Okay. So AI displacement, that rotation, that sort of software stocks coming under pressure,
01:12continues to be a theme then, Adam. What do we do? What do central bankers do? They've been kind
01:16of quiet, it seems, on the AI theme and what this does to underlying economies. But I know we've
01:21been hearing from the RBNZ. We were speaking to a guest just moments ago who was telling us that
01:25they thought, despite what the market did with the Lagarde story, that actually this could be
01:28hawkish for the euro. I mean, what's your thinking about global central banks right now?
01:33I think ultimately we have kind of seen a bit of a dovish inflection point since the start of the
01:36year. You know, you take something like the Bank of Canada, the ECB, they were biased towards
01:40potentially hiking at the start of the year. That's gone away. For the Fed, the conversation has
01:44gone, you know, from one to two cuts this year to two to three. And I think, you know,
01:48we have potentially overshot a little bit there. As you said, the AI theme is incredibly
01:52important for central bankers. I actually saw from Fed's bar yesterday that he was actually,
01:56you know, a little bit more cautious than, you know, Kevin Walsh is expected to be,
02:00which suggests that, you know, Kevin Walsh may struggle to get the Fed on board with kind of
02:04some of his views. But, you know, there's been a bit, you know, at the margin some other dovish
02:07impulses. Bank of England, that's increasingly dovish. And, you know, going back to the ECB,
02:13you know, I saw this Lagarde story this morning and my kind of take is it's not really a tradable
02:17event at the moment. We don't know who could take over. It could be a dove. It could be a
02:21hawk.
02:22And then even when they are in place, we don't know how much of an effect they're going to have
02:25on monetary policy. So, yes, it's an interesting headline. But for, you know, a tradable event,
02:29I don't think it's really that important at the moment.
02:31Is the BOE still tradable? Does the CPI of today change your calculus in terms of how far and how
02:35fast the Bank of England can go?
02:37I think it just validates what we were talking about yesterday. You know, I mean, CPI, all it had to
02:40do
02:40was really print in line. Yes, it's a bit above the Bank of England's expectations. But ultimately,
02:45it placed this narrative that disinflation process is on track. Yesterday's labour market data set us
02:50up for a March cut. The bar to do that already was relatively low. I don't think anything we've
02:55really seen in the data has really kind of changed that view. I think, you know, we do get this
03:00second
03:00cut in, you know, 2026. But I think it may come slightly towards the end of the year. I still
03:05think
03:06there's a bit of reticence on the MPC. And, you know, that could potentially keep pound pressure in
03:10the interim. You know, if you combine that with political risk as well, I think I'd be incredibly
03:14thematic for the pound.
03:15OK, thank you very much, Adam.
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