00:00When you look, for example, at the rising global bond yields, I mean, that should have implications actually for the
00:05rest of the asset classes.
00:07They should as long. It really depends on what that is driving them.
00:11So we have seen last week, for example, equities had a bit of a wobble because of the rising global
00:15bond yields.
00:16But you see it less in the U.S. And I think part of the reason is is that the
00:19sell off was at least partially driven by stronger growth expectations.
00:23And that's really key. So it helps at least equities maintain their momentum.
00:26And you've seen that with the strong earnings season, it's been able to digest that increase in bond yields.
00:31Now, where we go from here, of course, it's going to be important to watch how the bond yield market
00:35progresses.
00:36From our perspective, though, we don't expect to see markets repricing Fed cuts unless, of course, there's a labor market
00:41weakening.
00:42So from that perspective, in terms of how much bonds rally in the U.S., I think it's going to
00:46be quite contained.
00:47But do you think markets are just too optimistic on this war in Iran?
00:52There is certainly some optimism. I mean, I think today you have to add a little bit more optimism back
00:58into your scenarios.
01:00I think the key thing that's driving the market, though, is just this resilience.
01:04So let's say even in some of our downside scenarios, even if you don't get a deal and you see
01:08oil prices rising up to $150 a barrel or so,
01:11we still find it very difficult to see a recession in the U.S.
01:14So I think that is one of the key things that's driving the equity market is strong earnings and, of
01:18course, the AI rally.
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