Jason are we gonna get any clarity and a Jackson Hole next week. I think broadly speaking there was a Jackson Hole. I'm sure that
there will be a lot of headlines coming through. But I think if you look at the broader picture into September FOMC do remember
that when we looked at the CPI in the last print although you can see that it was slightly better than expectations. The
bottom line is the nominal CPI is actually still very very high. So I think within that context looking at what the Fed speakers
have been mentioning in terms of comments it's almost as if 75 basis points hike is actually sort of an insurance of sorts to
make sure that at least some of that inflation that gets further under control in the coming cycle. So I think with the the
Jackson Hole lots of headlines but at least from where we think of it and you look at market pricing 50 to 75 basis points is
pretty much baked in the cake for the upcoming FOMC. I think what's more important than is how to thwart plots. What is the
Fed thinking afterwards and how does that affect the projections of the future rate hikes. Because as it as it's currently
expecting seventy five and then possibly 25 25 or 50 those would be similar levels which I think the street is thinking at. So
there are some dependency after the September FOMC. But the bottom line is for the near term I think the hike there is
pretty much priced in and well expected and televised. Yeah. ISE. Maybe you see that in the move and DAX where bonds
are certainly getting a bit more karma. People are returning back to the bond market right now. How sustainable are these
moves. Does it give you more inclination to maybe add duration. Now in this market.
So I think with regards to the US Treasury side we've been operating within this region more as a range trade of sorts. To
be honest I think what is noteworthy of course then is the two tons curve inversion in the US. We've actually never been
inverted for quite some time already and arguably the current levels are already worse than the weight of the world. So I
think within that overall curve inversion scenario and pressing the recession risk
I think that if you pair that towards the Asian economies and some of the data points that we've been getting and also some of
the monetary policy comments coming from the central banks in this region we do think that there is a window to engage these
tactically for some of these duration and possibly maybe as a more secular position into next year.
Jason in just a span of just one month the 10 year Treasury yields have dropped at least 60 basis points from that high of
three and a half percent. Would you say that any move upwards in temps a 10 year Treasury yields as a buying opportunity.
So I think overall what I was mentioning in terms of the Fed pricing and the market's pricing of the rate hikes in the
September FOMC if the bulk of these hikes are priced in even if the Fed does
the seventy five as expected you might see a marginal or a slight sell off in U.S. Treasury 10 year from here.
But whether it would necessarily hit a net new high or a new peak on U.S. Treasuries I think that remains somewhat
contentious because again it goes back to the point that at the end of the day there is another 50 to 75 basis points hike
coming through and that will impair or impact parts of the domestic or consumption demand. So naturally then that should
provide some degree of you know CPI normalization over time at least from the U.S.
side. So I think I think to me at least then if that's the case I
would probably consider more of this as a buying opportunity although I think that in some sense we are we have seen a very
decent value creation was into Asian rates. So our expressions within the age of fixed income naturally leans a bit more
towards this region over specifically being big overweight us. If you are choosing high yield would you be buying China
up. Did you mean China U.S. dollar or credits. So I think within the US dollar China credit space as you know
there has been some degree of value creation not only in the property sector but the banking sector as well. A lot of this is
top down policy driven. And of course there are certain bonds right now that trade more distressed levels. I think to be very
honest within this sector although there is value creation a lot of this is driven by the top down policy drivers. As such we
need to look at a whether there's a turnover or a turnaround in terms of the big policies. I don't think we've seen that thus
far. Be that is the bottom up. So activity. So I think it's not as easy as saying it's a buy or sell. I think it's more
about picking those battles and trying to assess which ones will survive. And you would use those as the buying opportunities
over time. Yeah you said constructive on Asia rates selective when it comes
to effects though. Can you elaborate a bit more on that thesis and where now in fact is most vulnerable at the moment.
So I think the message that we've seen over the past year has been that the Fed has been very hawkish and agents. And for
banks as you know some of the North Asian ones in particular as well as positive Southeast Asian ones have become more hawkish
to compensate or matched out of the Fed. But I think something's been changing over the past quarter or
two in particular as the market has increasingly priced in the Fed rate hikes
and we're actually seeing some marginal improvements in headline CPI in the States. This has actually provided some changes here
on the monetary policy stance for some of the Asian countries. So we've actually started seeing some of the central banks
becoming slightly less hawkish than before and because of the fact that the rates have sold off within this space for quite a
bit. We actually think that this change in stance over time particularly next year may allow for some buying opportunities
for the Asian local duration. As such then on the overall basis we generally like the Asian duration. We are positioned
selectively in Indonesia and Malaysia in particular for the other countries. Then I'd say that we're a bit more technical.