00:00Mark good morning from London. What is setting the mood in the markets right now because if you look at
00:04European futures they look a bit negative. The oil price is a little higher. But U.S. futures despite the
00:09Oracle numbers overnight actually U.S. futures looking pretty buoyant. So what's the mood. Yeah the price action Asia was
00:17very impressive. You need to put the U.S. futures in context of the sell off that we saw yesterday.
00:22But you know we had a U.S. session where tech stocks got hurt and then we had the U
00:27.S. Iran flare up.
00:28The Asia session started very negatively. It looked like it was going to be quite a bleak day. We saw
00:34precious metals break lower. We saw Hong Kong stocks break lower. We saw you know Korean stocks trading very heavily.
00:41It looked like a really negative day. And you know in the second half of the kind of Asia session
00:45we really improved quite a bit. Now I know things are generally trading a little bit negative. But I find
00:50that impressive given that the U.S.-Iran conflict has probably seen the largest amount of strikes for a number of
00:57weeks.
00:57So it's the most tense moment. And given that the tech news flow has been a little bit more negative
01:04with the expenses out of Oracle with the fact that the SpaceX IPO is withdrawing liquidity from the system.
01:10So I actually think the price action is quite impressed from the short term. But I'm not sure that the
01:14pain of the sell off we've seen in the last week or so is quite over yet.
01:17I think we have a pop in stock markets after the SpaceX IPO. But I think we have to get
01:22through that first.
01:24Mark, I am definitely going to watch Christine Lagarde at the press conference a little bit later on today. I'm
01:29assuming you will be too.
01:33Guy, you know that I absolutely will not be.
01:37Look, I always think ECB is a little bit anticlimactic and I'm not expecting any major surprise today.
01:47I think, you know, I do think it's funny that the ECB are obviously going to be the first to
01:52hike and everyone wonders whether they've got the least inflation problem of some of the major central banks out there.
01:56But I'm not expecting the ECB to provide much fireworks and I think we'll move beyond it quite quickly.
02:01I am much more concerned about the U.S. PPI figure today.
02:04I know CPI figure yesterday was a bit mixed, but I think PPI is where we'll see a headline number,
02:09which is really going to upset people again.
02:13Yes. So the headline number could upset people on the PPI story.
02:18What is that going to do to inflation expectations in the States, to Fed expectations in the States?
02:23Because given all the hype and the drama, the market wasn't enormously shaken by the CPI print yesterday.
02:32No, they took it very well.
02:34But I think people have started to realize that the number is probably looking less good for stocks, I think,
02:39on what it means for the consumer.
02:41And I think, again, we're going to see this in a really high PPI number today, that the idea that,
02:46hey, that maybe margins are getting squeezed for U.S. stocks.
02:49So I think that the inflation dynamic is still pretty negative for the stock market.
02:54I think that people think the disinflationary trend in shelter has largely run its course.
02:58And the fact is, we've still got this supply shock from the Middle East not resolved.
03:03So we've still got a worsening inflationary outlook.
03:06We don't know how much worse.
03:08We do know it's continuing to deteriorate.
03:09So I think inflation is going to continue to be a negative dynamic.
03:12And in the very short term, I think we might get another pop up in yields to squeeze the stock
03:15market lower.
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