00:00Adam, good morning to you. So once again, we've got another day where markets have taken a lot
00:04on trust. President Trump seems very confident that either we get an extension to the ceasefire
00:08deal or we get an actual full peace deal. But we still have the Strait of Hormuz close and the
00:14market's just pausing for breath. What do we make of this pause? Yeah, I mean, I personally wouldn't
00:18read too much into it at this juncture. I mean, we have seen a bit of a tendency for the
00:21US to get in
00:22and really just run away with things. And then another observation to make is, you know, we've
00:26talked plenty of times, but we do see a bit of this de-risking into the weekend. I probably wouldn't
00:31really like place too much weight on that. I mean, last Friday we saw US stocks were down 0.1%.
00:36Europe was higher. So I feel like that trade has kind of died a little bit. And that is kind
00:40of
00:40consistent with this market that we're talking about, which is kind of looking through a lot of
00:43the intraday noise when it comes to US and Iran. I think bigger picture, this kind of rebound from
00:48Q1 led by US equities, large caps, growth momentum, that still very much remains in place. And if we
00:54see a bit of a pause today, I think it's more a healthy consolidation.
00:58Front end gilt yield went down yesterday. Curve steepened, back end went up. Is the front
01:03end moving on the Bank of England and is the back end moving on Keir Starmer and Mandelson?
01:08Yeah, that would definitely be my observation to make. I think for the Bank of England,
01:11just seeing a lot more caution on the need for immediate tightening. Yes, we saw Taylor,
01:16who's one of the more dovish members yesterday, but Bailey, he's been very much seeing it from
01:19that hymn sheet as well. I think for the back end, I don't want to get drawn into too much
01:23speculation over what kind of happens. I think the main observation to make really is that UK
01:27political risk premia needs to kind of be embedded in UK assets. You see that in the
01:32pound, you see that in back end, longer dated gilts, because ultimately this is a fiscal story
01:37for the UK. There's a lot of concern about potentially what happens next at a time where
01:41the UK's finances are relatively acute. There's a lot of pressure for the UK government to kind
01:45of step in and deal with the cost of living crisis. And, you know, the next month we do have
01:50these May local elections, which will kind of ramp up political pressure further. So
01:54I think it's kind of very much just refocused mind for traders. And that's what we're seeing
01:57play out today. Yeah. And all of that makes a lot of sense. It's quite, it's quite interesting
02:00to hear from C.S. Venkatakrishna and Barclays. He's sounding so optimistic on the UK. And he
02:06has his reasons for that as well. What are you watching for next week then, Adam? What are
02:10you, the team, going to be zeroing in on next week in terms of what's going to be central
02:14for markets? Yeah, in terms of our desk discussions, obviously, you know, we are looking through
02:18a bit of the intraday noise when it comes to US and Iran, but that doesn't mean we're
02:22completely overlooking it. I think the market very much still needs to be on this trajectory
02:26that we are making progress towards a ceasefire and an eventual peace deal. And then what
02:31happens with these flows through the Strait of Hormuz? There will be eventually a time
02:34where if there's no traction on that front, that will be a concern for the market. May not
02:38necessarily play out next week, but we'll see. I think you've got some interesting UK data
02:43out next week. US retail sales probably overlook. We've heard from the banks this week.
02:47The US consumer seems relatively resilient. I think in terms of markets I cover, I think
02:51European earnings, they're going to become increasingly in focus. I think the signs we've
02:55kind of seen this week have been pretty concerning, whether that's luxury, whether that's ASML or
03:00Ericsson today. As I've mentioned, you know, the bar for European earnings to impress is a
03:05relatively high one. If we do see the earnings fall short, then we could see Europe potentially
03:09lag the rest of the world. Adam, thank you very much indeed on what you're looking
03:13for next week. Grimberg Markets Live's Adam Linton. Remember, of course, you can get up
03:18to date analysis and insight from Adam and the rest of the team. Just go to MLive. Go on your
03:23terminal.
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