Mark, we've had considerable
developments of a geopolitical nature.
We were just talking about the
relationship there between uh between
India and China and Russia comes into
that and then elsewhere we've been
focused very much on the White House and
all of the meetings that have taken
place there with regards to Ukraine.
Does any of that cut through into
markets? You know, some people are
suggesting there's a little bit of
upside maybe for Europe, but but it
seems too early to be really making that
call. I wonder how how from a markets
perspective we watch the developments
around Ukraine.
I think you've summed it up pretty well
there and I think the fact is we have
made a little bit more progress than was
probably expected by most people in
markets a week ago. There are signs that
potentially uh a peace deal is is
available there and I think that's got
the market a little bit optimistic. As
you say it'll take some time uh and
there's still lots go wrong. So we've
got a slightly higher level of optimism
that's priced into market. You can see
that European equities are doing
particularly well this month uh compared
to most other global markets. They're
having outperforming on that basis and I
think that's kind of priced in from
there. I think it's going to be hard for
us to nudge further from there. I don't
I don't think in the short term it's the
forward-looking dynamic unless those
kind of talks get derailed, but
definitely it has been a driver of the
optimism the last few days. What's
interesting is it's not kind of
spreading into global optimism. We seem
to have kind of stagnated a little bit
in global markets outside Europe.
Things are getting bleak when we start
talking about the guilt market again. I
hear you're interested in UK inflation.
>> Yeah, I'm not normally excited about UK
inflation. Of course, UK data has been
so undermined in recent years. We're
always a bit suspicious of it. UK
inflation's always way above target, but
it's really very far above target and
not getting any close to target. And of
course, we've still got cuts priced in
and I know the economy is not doing
great. But, you know, look, long end
guilt yields are really kind of getting
quite a bit higher again. And I think
this is in a backdrop that the global
story is yields and the long end are
rising all everywhere again. We're
seeing it in Chinese yields which wasn't
part of the dynamic before. We're seeing
obviously in Japanese yields. US yields
are only about 10 basis points than they
higher than they were a week ago. But
the point is they have bottom. They are
rising again this month. So I think
we're seeing you know the word bond
vigilantes gets used a bit too freely.
And I'm probably going to make that same
error here by saying we're seeing the
the slight creep of bond vigilantism
creeping back into the market this
month. And I'm worried given Jackson
Holes coming up that it might really
accelerate. So I think bond yields are
the next big catalyst for markets. And I
see higher bond yields being a problem
for global stocks over the weeks ahead.
>> Okay. And Jackson Hall, do you think
that Jerome Powell is going to try hard
to say very little or or will he have
some other aim in mind? Mark,
I
>> I think he is going to try, you know,
saying very little and trying to keep
his options open. What that will
essentially mean is maybe pushing back
on the idea of validating a September
cut. I don't think that the data
warrants that yet. Um, but he might want
to be have a September cut if the data
we get in early uh September is really
really poor. So, I think he's going to
be slightly hawkish, but not overly so,
which is going to leave the market a
little bit disappointed.