00:00I know that you don't like necessarily talking about the Iran war, but when it comes to oil, is it
00:04back as a cross-asset mover finally?
00:09As it looks to break out, it's becoming more and more of a factor, especially with bond markets under existing
00:15pressure from kind of fiscal largesse across the DM world.
00:19Most notably, this is in the U.S. and in Japan, which are both struggling with controlling the short end
00:24of the curve.
00:25We see the JGB two-year closely tracking the U.S. two-year, which in turn is closely tracking the
00:31oil price.
00:32Now, with all things being equal, it does look like oil is the marginal mover of Treasury price action.
00:37Despite the Trump administration's kind of efforts to control drug prices and shelter prices and the like, it really is
00:44oil that is becoming the needle mover at the margin.
00:46And where does that lead the Treasury market?
00:48That leads the Treasury market under pressure on the short end, and on the long end, you have this battle
00:53with the AI issuance.
00:55So, the bond market is under concerted pressure.
00:57Now, from a cross-asset perspective, until recently, the U.S. equity market has been very resistant to any pressure
01:04from either oil or the Treasury market
01:06just because it is producing an absolute spigot of earnings and free cash flow.
01:11Asia is not quite in the same position outside of the semiconductor trade, where positioning is very heavy.
01:17So, in this time...
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