00:00Adam, let's start with stocks, because seemingly all over the world, not in Europe, which is perhaps notable,
00:04we seem to be going back to levels in stocks that we were at before the war started.
00:08Stocks really trying another day where we're trying to move on.
00:11I've been looking at the latest news lines, an extension of the ceasefire for two weeks, possibly.
00:15That's what people familiar are telling Bloomberg.
00:18Does that sound risk on or is it risk off because the straight-up form is stays closed for longer?
00:22I'm still scratching my head about that one.
00:24Yeah, it's interesting.
00:25I think there is a large part of this which does feel like the market has moved on to some
00:28extent from the war.
00:30We saw that to some extent on display yesterday.
00:32So we saw some relatively negative headlines about troop movements in the US, some threats from Iran,
00:37and the market was relatively unfazed by this.
00:40So the market is still continuing to run with the optimism.
00:43I think as Mark was on your show saying yesterday, there may be a potential economic reckoning,
00:47whereby the economic impact becomes apparent and that could become a factor for equities.
00:52But in the interim, we do have this kind of almost void, and it does appear that the AI trade
00:56and tech is filling that void.
00:58I mean, US tech is up about 13% month to date.
01:01We've just seen TSMC earnings, which are very positive.
01:04That's also helping prop things up.
01:07And that's kind of helping some indices to kind of reach pre-conflict levels and go beyond.
01:11As you say, you know, things may become a little bit more regionally selective.
01:15And as you say, Europe is an interesting one on that front.
01:18Economic exposure doesn't have this big tech sector.
01:21And, you know, what we have seen from the tech sector, ASML, they were marked down yesterday despite good earnings.
01:26And then the earnings we have seen, OK, some of it may be idiosyncratic to the luxury sector, likes of
01:31Kering and Hermes.
01:32But ultimately, there is a high bar for European earnings to impress.
01:36Are bond markets listening to central banks telling them they're wrong?
01:40Well, there was the Bailey comment about them being wrong.
01:43And that was, I think, when markets are priced at about 100 basis points of hikes, and we have come
01:47down since.
01:47I think with bonds, more generally, they're going to be a lot more cautious in pricing out the impacts of
01:52the conflict.
01:53And, you know, we saw that on display yesterday.
01:55Bailey said the length of the wall will be important.
01:59And, you know, that reminds us there is still the conflicts going on.
02:02ECB, they're going to look like they're going to hold in April.
02:05They feel like financing conditions are doing some of the heavy lifting.
02:08So, we've kind of gone back to two rate hikes price for the ECB, a little bit less for the
02:12BOE.
02:13I think we'll probably kind of stay there for a little bit until we get more clarity on the impact
02:17of the war.
02:18And that will probably see that, you know, gains in short-term bonds are probably less pronounced than what we've
02:22seen in the equity market.
02:23If the equity market is looking through this current conflict towards a ceasefire and a resolution, does that mean you
02:30get a further unwind of the hedging around the dollar?
02:32It does feel like the dollar downside does have some more room to run, definitely.
02:36But I think, you know, in terms of calls for like some Eurodollar 120 seem a little bit stretched.
02:41You know, either the ECB doesn't hike, we unwind some of that, either the growth implications, if they do hike,
02:46come into view.
02:47I think you say a similar thing for the pound.
02:49If you look at the yen, BOJ is caught between growth and inflation.
02:53If the BOJ don't really hike, then if you're a yen bull, that's obviously a problem.
02:57Adam, thank you very much indeed.
02:58Adam Linton from our Markets Live team, of course, with some analysis across different asset classes with equities pointing out
03:03again today.
03:04Remember, you can get up-to-date analysis and insight, of course, from Adam and the rest of the team.
03:08Just go to MLive Go on your Bloomberg terminal.
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