Where I'll be what is going on. Why don't we sit there and get any breaks right now. What do you think is actually being priced
in into equity in fixed income markets. Well I think the narrative has moved from inflation risk and
central bank reaction function now forward to looking at this growth inflation puzzle
in the light of the quite aggressive central bank reactions at the moment. So we're not getting any reprieve because we have
this. And the one hand we also have and maybe and hopefully we get informed this week on the inflation picture out of the yes
we are possibly pricing peak fed hawkishness. We are little pricing our peak coal that China uncertainty and negativity. And
we are also of course starting the week with the celebrations of the 9th of May in Russia. So we are also looking again at the
Russia Ukraine situation and repricing peak uncertainty around whether we get an deceleration or an acceleration of any kind of
movements there. Someone absolutely says
exactly. A lot of balls in the air as it were. Let's take a look at the bond market. Do you see any letup in the declines we've
been seeing in a. Gifts. Do you have any idea when people can perhaps see the
stemming of these losses. Well it'd be fantastic if I if I knew that exact timing. I just.
But I think we all have to be quite nimble in these kind of markets given all the uncertainties I've just laid out. It's
very difficult to pin point but that's why I'm looking forward to this week with the inflation data coming out because you're
possibly if we have you we are seeing the peak in inflation then maybe we have also
seen the peak in pricing. Central bank reaction function and more aggressiveness. And maybe we get a bit of a moderation in
our losses in the equities and the fixed income market because we are then pricing less of a recession risk. So.
Light at the end of the tunnel. Maybe this week. But maybe it's a hope we would see.
Maybe maybe not. We are seeing pretty much stress across asset classes. What do you do Stephanie. How do you play this. Do you
buy the dip. Do you do you sell the bonds. What do you do with the stock market in particular.
Well you have to make sure you are looking at the sectors that may be having a more longer term potential. So I think it's
important to keep the longer term strategic themes in mind as well. You know bigger stuff like cybersecurity for instance we
have recently upgraded in the US the health care sector given the market is at the cycle where it is and everybody gets more
defensive it's looking more attractive now. We have you know you have to have a look and way up between the
shorter term and the medium and the longer term short term we are clearly underweight Europe. We are neutral in the US but we
are actually still overweight in Asia. Extra panel. Weisel of a weight in Asia what we re expecting capital outflows
from the region to perhaps the US. Yes you are touching on a very important point. We have seen
that interaction between higher U.S. higher U.S. dollar higher U.S. rates et cetera and predominantly playing out against China
because they are the central bank. Divergent is the biggest of all in the region. So we have seen how this capital outflows has
been hitting the renminbi of course and that is something to watch and be very mindful of. But they are if you look at other
parts in the region. So we have been recently conducting some of a deep dive in Southeast Asia. Maybe there are also some
countries where you have a more differentiated picture and that you can also find opportunities.
Still talk to me a little bit about the dollar and how long you see dollar strength for here. It is causing a few issues. Tell
me in the discussions you have with the monetary authority of Singapore what prison are they looking at it through.
Well whatever we discuss in these forums is obviously nothing I can discuss in a wider forum. But if you look at euro dollar or
the dollar you always have two sides to the equation off of the dollar pricing. So when you look at euro dollar in particular
our studies suggest we have about five to six big figures risk premium that weighing on the euro right now because of that
uncertainty surrounding the the forward pass on the Russia Ukraine situation. And of course because Europe is still
weighing and trying to come to a conclusion as to whether there will for coal gas and oil imports from Russia. So that's one
part that's keeping your dollar down. And then of course as long as there's some risk aversion
is in the market then the US dollar as a still short term safe haven is still at play as well.
A strong dollar. X Y at a 19 year high. On the other side. Weakness in the yuan that will impact Asian currencies. No.
It will. But maybe we shouldn't just look at the shorter term picture and then project from there. And I know a lot of people
are now looking at parity which is easy to say if you are not too far away from it. But if you look at it from a medium term
and longer term structural drivers and this is a debate that's not necessarily happening at the MLS. But if you look at central
banks around the globe it's actually in the public domain that there will be a redistribution of your central bank holdings
away from the dollar going forward. I think we have seen an unprecedented move from the Americans in terms of
being able to put sanctions on a central bank and freeze those assets. And then of course you will have bigger concerns from
other central banks as well. We have seen smaller central banks I think in Israel already starting to diversify. You have seen
and this again is a longer term issue. Now commodity contracts being priced away from the dollar. So ultimately over the medium
and longer term you would see this to turn as well. So don't be fueled by what's happening in the short term and just project
that for the medium and long term as well. There are other factors at play.