00:00Well, it's interesting when the micro becomes the macro because they have the micro story around Samsung and their earnings.
00:05But given the scale and presence of Samsung and one or two other companies in the Korean market,
00:12this then has sort of market moving potential at a wider level.
00:16What did you make of the numbers out of Samsung and their ability to move the Cosby?
00:22Yeah, good morning, Anna.
00:23I think that that's increasingly becoming the case, actually, that Asia's markets and Asia's companies are influencing global market dynamics,
00:31particularly those in the U.S. tech stack.
00:34For Samsung today, what we saw was an extraordinary jump in earnings revenue.
00:39But at the same time, a market that is topping out somewhat and so came back off those highs despite
00:46it beating on its expectations.
00:48So I think there's a couple of things going on here.
00:50One rotation trade, which we've seen over the recent sessions where people are putting their cash into other assets beyond
00:58technology.
00:59And that's seen in a couple of things.
01:01So although the Cosby got hammered today, it was still only down by a ratio of four companies falling to
01:06three companies rising.
01:07So not all out kind of defensive play.
01:10If you look in Japan as well, for example, the topics there, which is tech light, is outperforming the Nikkei.
01:16So some signs there of that rotation trade, too, though, the Samsung's earnings actually often when it reports a profit
01:22beat.
01:22So out of the last 16 times it's reported a profit beat like today's, on 10 of those occasions it's
01:28fallen.
01:29So it's seen as something of an opportunity for investors to take some of the profits off the table, too.
01:33And actually, sometimes when it misses, in fact, more times when it misses, it rises.
01:37So a slightly counterintuitive indicator there.
01:42In terms of what else we're watching this morning, the auction we saw in Japan for 30 years I thought
01:48was really interesting.
01:49Yields may be getting to the point where demand is there.
01:53That's right, Guy.
01:55So extremely strong demand at that auction with yields just on the brink of 4%.
02:00So that seems to be something of a level where long-term investors are more willing to look at Japanese
02:05government bonds.
02:05We did also hear from the government some more reassuring signs there.
02:10One of the ministers called Kiu-Chi was talking about the idea that, no, there's no government policy to try
02:15to prevent the Bank of Japan from raising interest rates.
02:17Why does that matter?
02:18The higher they can get short-term interest rates and the faster they can, the more it sort of gives
02:23market confidence in their inflation-fighting dynamics.
02:25And therefore, the more it can bring down those longer-term interest rates.
02:30And let me ask you, Paul, about what's going on in China.
02:33We've seen the PDOC unveiling measures to cement Hong Kong's yuan hub status.
02:38What are expectations like there?
02:42Yeah, so I think that this is an important sort of dynamic, not for immediate pricing, but for the very
02:47long-term view.
02:47China, again, pushing the UN as an international currency of funding and trading.
02:53So, in particular, it's expanding the offshore UN markets in terms of how much the HKMA is able to release
03:00into the market.
03:01And it's allowing more onshore market participants to buy CNH-denominated bonds.
03:08So, it's all about getting more bond issuance in Hong Kong and getting more money into that to swell the
03:13market.
03:13But the U.S. is fighting back somewhat here as well.
03:15We hear Besant talking more and more about the idea that he wants to have a strong dollar.
03:19So, that tension is starting to ratchet up between the superpowers over currency controls.
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