00:00I started this program, Paul, 46 minutes ago, talking about where we were seeing boomers and where we were seeing
00:05doomers.
00:06And the boomer view certainly coming through from U.S. tech.
00:09The doomer view, maybe if you focus much more on oil prices and what we see there with oil over
00:14$103 a barrel.
00:15How would you sum up the disconnects within the market right now?
00:20Good morning, Anna. I think that's a really good way of describing it because it's also playing out that way
00:25a little bit in Asia's markets,
00:26where we have the North Korean stock gauges like South Korea and Taiwan still doing very well out of this
00:35AI story.
00:36But we have some of the more struggling emerging market nations, Indonesia in particular, under immense pressure now.
00:42We see the currency weakening. We see the stocks weakening in contrast to what we're seeing in some of the
00:47rest of the region.
00:48And that's because they're facing those higher and elevated energy costs and don't have much to offset it,
00:53even when some of the other countries around the region are still looking relatively comfortable and have pricing power to
00:59pass that on to the consumers.
01:01And going further down the stack, we see South Korea, Pakistan, those sorts of countries facing shorter working weeks because
01:07of the disruptions.
01:09The longer this goes on, the less energy there is flowing into the global markets, the higher the prices are
01:14going to go on.
01:14And we've already got to Wednesday and we've got no signs of any talks happening between the U.S. and
01:19Iran.
01:19And some of those investors in those nations are starting to feel it and run out of patience a little
01:24bit, it seems.
01:25Jim, if you're a boomer, you say, who cares? The semi-sector is ripping higher.
01:30Yeah. And I just need to be I need to hitch myself to that train because it is it is
01:36an incredible picture.
01:37And the numbers out this morning in some ways justify it.
01:41But but the stock run has been so good for many of many of these businesses.
01:47That's right. There was a little bit of a pause for breath in Korea today.
01:51In the U.S., we've had that record breaking run in the Philadelphia semiconductor index as well.
01:57And but we still keep getting the good earnings news.
01:59Right. And the good financial and economic news as well.
02:02So Texas instruments look good. SK Hynix looks good.
02:05South Korea's exports looking very strong still.
02:08And so there's plenty of momentum in those areas.
02:11You know, the companies are talking about being sold out two or three years in advance, not having any worries
02:15about their sort of supplies that are coming in.
02:17And so that story, that picture is optimistic. And because we've had a little bit of a relent in terms
02:22of the fixed income space,
02:23they actually may not be struggling in the same way in terms of the concerns about raising costs to build
02:30the data centers as had been previously the case.
02:34Paul, I want to look back to your first answer around geopolitics and what we're seeing in Iran and how
02:37that ties into the FX space
02:39and something of a shakeout in terms of dominance among the yuan, the yen.
02:42There's the dollar story as well. What are you seeing when it comes to the FX impacts of that?
02:48Yes, Tom. Favourite topic of conversation.
02:51This war is really sort of opening the door for that narrative about the internationalization of the Chinese yuan
02:56and how it can gain ground against the U.S.
02:59So we heard Besant in the U.S. talking about the idea of maybe extending some more swap lines of
03:03dollars into the Asia region,
03:05some demand for that.
03:06Maybe it's a little bit of a pushback because we're also seeing increasing use of the U.N.
03:10for these trades in crude oil, good way of projecting economic and fiscal power.
03:15And LCH here today talking to us about the idea that in the option space,
03:19we may see more use of the U.N. going forwards too.
Comments