Paul, walk us through the scenario
analysis here. Does this go well? Does
this go poorly? How does the market
interpret this print?
Uh, good morning. Uh, Kitty from the
beautiful city of Singapore. Uh,
sunshining here. Um, everybody looking
forward to the weekend, but before that,
yes, we have that core um PCE number
that everybody is focusing on. I feel
like, you know, the way that the market
is priced right now, people are
expecting a slightly higher inflation
reading. Um, but they're also not that
bothered about it. And I think that the
reason for that is that the Fed has
already quite clearly signaled to us
that September is now very much in play
and most likely that they're going to be
cutting there and it feels to me like a
lot of the um decision makers have
already made up their minds about about
that. So what we might see maybe
depending on the number would be people
calibrating their bets for how much uh
or how fast we move beyond that. Um
people will be watching as well
obviously for any any uh indication we
can get that the tariffs are being
passed through to consumers more
aggressively. I think that there's also
the possibility there'll be slightly
stronger uh service inflation, but it's
the labor side, I think, of the equation
that the Fed is really paying attention
to and more worried about. And so that
uh probably means that the market impact
uh from today's figures is is is
unlikely to be too huge.
So Paul, we didn't get any market drama
when it came to the French inflation
number, but of course the political
rumblings continue next week. Will the
market drama there continue?
I think it's going to be really
interesting to watch out there. You
know, we've seen that widening of the
spreads. Uh so far, it feels to me I
think that, you know, it's more of a
France issue than a Europe issue. The
euro hasn't been under particular
pressure um so far. So, um uh, you know,
relatively contained to to that market
at the moment, but there is, you know,
little bits of political risk all over
the place at the moment. And also in
Asia, we're seeing some of that today.
uh some political protests in Indonesia
and that's really given that market a
whack both in terms of the uh currency
and also in the stocks in particular. Uh
so you know keep an eye on those
individual pockets of risk where they're
flaring up and that kind of thing but I
think the overall picture is you know
markets are pretty confident at the
moment and looking robust.
Paul it's it's nice when your stock
market has a massive rally just as
global leaders are turning up in your
country. I'm talking here of course uh
about what is happening in China. I'm
not drawing a connection between the two
and suggesting there's any political
interference in the stock market. But
this stock market rally looks a little
bit of a head scratcher.
Yeah, it does. Uh based on the economic
data uh at least which has been so so a
little bit poor actually. We've seen
quite a lot of misses. But there is a
lot of cash that's been sitting on the
sidelines. There are some positive
narratives for China particularly in
that tech space that people have really
been leaning into. And so it's been
interesting to see the nuances in the
market and where there've been uh the
real gains has been in those sort of new
sectors has been in smaller stocks and
small caps. Uh it's been you know little
parts of the market that don't
necessarily catch the attention of
international investors so much whereas
some of the big companies you know and
we saw it with Mwan this week have been
the ones that have been suffering. So
Alibaba earnings coming up at the end of
play today that's going to be really
instructive as to what uh the bigger
companies look like in terms of the
economy and how we go from here. The
mainland socks have been outperforming
recently. Keep an eye on those in
particular next week.