00:00Mark, good morning to you. Things pretty quiet today, aren't they, I suppose, with the U.S. out,
00:05which means we take stock of where we've come in the week. And it's been a really big week in
00:09terms
00:09of central bank policy. We've heard from the Fed, a new chairman at the Fed in the shape of Kevin
00:15Walsh and some new hawkishness for markets to digest. Do you think that that's still having
00:19an effect? I see European bond yields are a little higher this morning as oil prices tick higher.
00:24Are we still dealing with that Fed hawkish narrative? I think so. I think people are
00:31really registering that, you know, it wasn't just the FOMC that was hawkish. Kevin Walsh himself
00:37was hawkish in terms of his focus on inflation was very key. I think one of the big takeaways
00:44was the restoration of Fed credibility, which has been undermined since Donald Trump came to power
00:51for a second term or at least perceived to be under threat. And Kevin Walsh kind of gave a
00:57message that he cares about inflation. And therefore, you know, the Fed wasn't going to
01:00be slack in its inflation fighting mandate. And that is a whole message for a regime change
01:05in U.S. real yields. For the past 18 months, we've priced that Fed policy will be easier than
01:12orthodox monetary policy or orthodox monetary theory would suggest. And instead, he's going to go,
01:20no, we do care about inflation. And that means we're going to have to shift back into a higher
01:23U.S. real yields regime. And that has consequences for other actions. It's very bullish. The dollar
01:29it's bad for speculative assets that depend on weak dollar and lower real yields. Precious metals are
01:35a perfect example. So I think that those kind of dynamics have more to play out. I think the dollar
01:40can strengthen, you know, has more to play at this kind of strength. It'll take a little bit of time
01:45to go feed through. It won't be a violent move. It'll be a slow readjustment. And I think we have
01:48more
01:49downside in precious metals like gold and silver. Yeah, you wonder how long it'll take for that
01:54credibility to become a benefit in these markets. Mark, what do you think it is that's driving the
01:59sour sentiment as we head into the weekend? Is it is it is just is it just because we've got
02:03the thin
02:03volumes? So I do think, you know, we do have low volumes, not just U.S. holidays, holidays in a
02:11bunch
02:11of places in Asia as well. So it's been low liquidity. I think that hawkishness is an issue, that kind
02:17of ongoing hawkishness that move in yields, that move higher in the dollar. That's that is a tightening
02:22of financial conditions for the rest of the world. On top of that, of course, we've had a little bit
02:26of negative sentiment that the talks, the next stage of talks between the U.S. and Iran aren't going to
02:32proceed immediately. And also with the the IDF still hitting in Lebanon, there's there's, I think,
02:39a little bit of concern about the deal, especially given the amount of criticism the deal has got from,
02:45you know, previous Trump allies. I think there's a little bit more worry about how sustainable the
02:52deal is going into the weekends. People are just taking a little bit of profit after a great run.
02:57OK, so it sounds as if I mean, we've got U.S. futures, but they're not going to be not
03:00going
03:00to see cash trading today. U.S. futures are pointing weaker and, you know, suggesting that things could be
03:05difficult for Monday. But there's a long way to go. A lot of football, perhaps, for everybody to watch
03:10over the weekend. Mark, what are we missing that we're not talking about in markets that we should be
03:14giving more attention to just briefly? I think before the weekend, it is U.K. focused. So to me,
03:21the big move today is we're going to we're going to care about U.K. assets. How are they going
03:25to cope
03:25with the Burnham victory? And of course, then precious metals when you watch. I think there's
03:29much more downside there.
Comments