00:00And Paul, these lines coming out of Iran just to remind us to focus in on what's happening with the
00:03oil price.
00:04We're up at 76 is the handle on Brent right now.
00:07And does this put inflation fears back on the agenda if for some parts of the market they left?
00:15Hi, good morning, Anna. Yes, I think it absolutely does.
00:18In fact, I would probably say that the most extreme market moves that we saw in reaction to the latest
00:23tensions
00:25or flare up in the relationship between the U.S. and Iran was in the bond market, was in the
00:31government bond market.
00:32We saw a pretty big jump in U.S. Treasury yields right across the board from twos to thirties,
00:37up about eight basis points in the session yesterday, seeing a bit of follow-through on that into European bonds
00:42today.
00:43The U.S. two-year yield is pretty close to the highest that it's been in more than a year.
00:49And that is just sort of, you know, the increase that we've got in oil prices is putting back onto
00:55people's agenda.
00:56The possibility we'll have to have higher for longer U.S. interest rates.
01:00The oil move itself was looking relatively contained.
01:03I'm not sure what these latest headlines will do, but it's certainly starting to pop up a little bit higher
01:08as well.
01:09Equities, though, I think they were following their own narrative.
01:11They weren't paying so much attention.
01:13So that's why I think, as you say, the bond market and the inflation risks is what's really sort of
01:17has people twitchy this morning.
01:20Let's talk about the equity markets, though.
01:22Cosby just closed in a bear market, Paul.
01:25How's retail feeling?
01:27What's the kind of the next step here?
01:29We're below the 50 DMA.
01:31Kind of talk me through what people are saying around what happens next with that market.
01:37Yeah, so I think for Korea, one of the telling points is going to be whether, having seen these valuations
01:44come lower,
01:45we see foreign investors starting to step back in as in being the dip buyers and replacing the retail traders,
01:50which are feeling pretty burnt at this moment in time.
01:52I think the other dynamic that you want to pay attention to in Asia's equity markets at the moment is
01:57this big rotation trade theme.
01:59So while the KUSB has been falling, we've seen a big rally in Hang Seng markets and Hong Kong markets
02:05today.
02:06The biggest world equity mover in the first few days of this month has been the Hang Seng tech index,
02:15the lowest or the worst performer, the KUSB.
02:17So that tells you that that rotation trade is going on.
02:20People also looking again more favorably at India, Singapore as well.
02:25And within the Asia space, as Korea tries to elevate the view of it from around the world, Paul, Indonesia
02:33facing a different fate.
02:36Yeah, yeah, poor old Indonesia.
02:38So it took another little bit of a body blow today.
02:41We heard from S&P, Dow Jones at S&P overnight talking about the idea that that they could also
02:50consider demoting Indonesia
02:52to a frontier market status if it doesn't follow through on the reforms that it's already talked about.
02:58So it's kind of another admission that it's on warning and watch, although this one not quite so significant as
03:04some of the other indexes for Indonesia.
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