Paul, the thing we can't ignore, of
course, is the Nvidia earnings. I say
that, but the after hours move wasn't
huge. NASDAQ futures actually pairing
earlier losses as we get closer to the
European open here. So, how do you put
the Nvidia story in context for us?
Yeah, good morning, Anna. Uh, I think
yeah, it's a really interesting question
and and and way to look at it is the
idea that Asia's markets really didn't
respond all that much at all to what we
saw with Nvidia. Remember, we build this
as a really big risk event. Implied
volatility was suggesting there could be
really major swings uh either way based
on what the earnings showed and uh
indeed it did drop quite a long way
around 3% in after hours trading in the
US. But the knock-on impact uh for for
broader markets doesn't seem to have
been all of that great. I think there's
a couple of things to think about. One,
the earnings really weren't all that
bad. There's some uncertainties in there
and that's part of what what made them
look a little bit weaker, the fact that
they excluded China from there
altogether. and two um you know even
then uh the the size of their earnings
is still pretty phenomenal all else
being considered uh I think that Asia's
markets had an extra fill it because
Nvidia is a bit worried about what it
can do in China that is opening space
for the Chinese technology companies to
also uh come in and so they had another
good day but all in all the market was
happy enough with that and focusing on
other things
other things what's happening in
Japanese bonds
Yeah. Uh so um we we know the Japanese
bonds have been under pressure
particularly at the long end of the
yield curve uh for some time. People
worried about inflation risk today. It
was the front end of the yield curve. An
auction of 2-year uh notes that really
didn't go very well. The weakest demand
in 16 years when you're looking at the
bid cover ratio. And I think that that
tells you a couple of things. One just
in general appetite for JGBs is very
weak and subdued at the moment. And two,
people are getting ready for the central
bank to raise interest rates. One of the
BOJ members was talking today sound a
little bit more hawkish than the market
might have expected. Uh so we're getting
ready for the BOJ to hike. Remember the
rest of the world obviously going in a
different direction at the moment, but
if that's going to happen, you're going
to want higher yield in order to own
those bonds. And so the risk now is that
that ricochets again back across to the
far end of the yield curve. We've been
talking to international investors who
thought that that would be a good option
given the extra pickup they could get
with currency hedges as well, but they
keep getting uh thwarted and uh all of
the all of the profits from that trade
are getting wiped out because the yields
keep on going higher as well. So,
troubling times there for the JGB
market.
Paul, let's continue the story in Asia
specifically. Walk us through the Indian
market here. We now have 50% tariffs on
India. We have concerns and threats
about secondary sanctions not just from
the states but from Europe now as well.
What is the thinking?
Yeah, we don't talk a lot about India uh
in this slot but I think a good moment
to do it given the fact that we're
getting hit by those extra tariffs on
India right now. But what we've been
worried about is being the weakness in
the bond market again over there as
well. Uh we have state uh states looking
to fund uh and the government as well um
sort of putting a lot of stress on
demand outlook. though today we reported
that the central bank was paying
attention to it and that seems to have
stopped the sell off just for now.
All right, Paul Dobson, Bloomberg's
executive editor for Asia Markets
walking us through some of those
dynamics. We thank you so much. much you
get more analysis from him and the team.
MLIVgo is the function on your
terminals.