00:00Adam, good morning to you. So, not disorderly seems to be the way that you're summing things up this morning.
00:05I wonder if this is the calm before some kind of storm. We don't really know.
00:09What are you watching out for as next developments?
00:12Yeah, I mean, like you said, we don't really kind of know how this is going to go.
00:15Obviously, the weekend's events were a negative and, you know, definitely dampens on what we saw last week.
00:20It raises the question of, OK, what happens to these crude flows?
00:23How much extra duration does this place on energy prices?
00:26But, you know, given how much we rallied last week, you know, the extent of moves we're seeing are relatively
00:31modest.
00:32And I still think that is kind of emblematic of a market which is constantly trying to look for the
00:36positives at every juncture.
00:38I think part of that is that the tail risks of the severe escalation and tax on energy infrastructure, they've
00:44been priced out.
00:45And then the fact that Iran have, like, left the door to talks open, the US seems to be wavering
00:50its commitment to the conflict.
00:51The markets for now are still seeing this as an incremental positive.
00:55And that's why, you know, in Asia, the cost boost is only down 1%.
00:58Nikkei, relatively small losses.
00:59The US future is the same.
01:01You know, but whether that proves to be, you know, the case that we see throughout the week is very
01:05much an unknown.
01:05And I think we need clarity on what this blockade actually looks like and what purpose this serves.
01:11And we've been discussing the fact that the bond markets, there's relative calm in the bond markets.
01:14And that's despite the fact that there is no physical oil coming out of the straight hole moves, or at
01:18least very little,
01:19that the inflation risks are once again in the spotlight.
01:22And yet there's relative relative calm in the European and US bond markets.
01:26Yeah, exactly.
01:27That's definitely an observation to make.
01:28I mean, the German 10-year yields opened up two basis points higher.
01:31Then the ECB rate hike bets, they've gone up to, like, 69 basis points.
01:35But again, we still just aren't at these extremes that we were before.
01:38And I think it is a market that is, you know, hopeful that there will be a resolution to the
01:41conflict.
01:42I think, you know, when we do get positivity, it's going to take longer fixed income market to price it
01:46out.
01:46There's still a lot of uncertainty of where energy lands, what that means for inflation, and how central bankers are
01:52going to respond.
01:53I think this week will be particularly interesting.
01:55I think we've got nearly, like, 19 ECB speakers, I think, throughout the week.
01:58So we'll learn more about their reaction function.
02:01April was priced near a 50-50 for a potential hike.
02:04So we're looking to see, you know, how much they place on inflation, how much they place on growth.
02:08And that will probably give us the next leg for fixed income markets.
02:12Earnings?
02:13Yeah.
02:13Obviously, earnings are particularly important.
02:15You know, you guys touched on Sodexo last week.
02:17For the Europe, that was really telling how the market just wasn't really prepared for that.
02:21And, you know, there's been a lot of commentary on the fact that European equities just aren't pricing.
02:25What are we looking out for?
02:26And then for U.S. equities, obviously, you get the banks.
02:29You expect to see record trading revenues.
02:31But the key focus will be on, OK, what's happening for the consumer?
02:35They get much more of a real-time feel on what's going on.
02:38And, you know, that could definitely have some impact on the market.
02:40But by the time it comes to Friday, we'll definitely be talking about the U.S. and Iran more.
02:44That remains the key story for the market.
02:46It does.
02:47And we spoke to Michael Metcalf earlier in the program.
02:49He said it might be a little early for the earnings story to fully reflect what's happening in Iran.
02:53I mean, we'll be looking at outlook statements, of course.
02:56Yeah, definitely.
02:57And that's kind of similar to what we've kind of seen, you know, for inflation as well.
03:00You know, we have seen what core inflation is doing.
03:02We're still in the early stages of it, even if it doesn't feel like we are.
03:04We've been battered by headlines for weeks.
03:06But there's still a lot more uncertainty, and we may not get too much more clarity on it this week.
03:11Adam, thank you very much indeed.
03:12I'm Linton from Bloomberg Markets Live Team.
03:14Remember, you can get an up-to-date analysis and insight from Adam and the rest of the team.
03:18Just go to MLiveGo.
Comments