00:00Mark, good morning to you. So positivity in these markets, it seems we've got oil prices coming down.
00:05We've got stock futures in Europe and the U.S. pointing higher.
00:09Are you is that matched by your mood today? Are you feeling optimistic?
00:16Yeah, absolutely. I think one of the problems at the moment is that the moves in markets are looking completely
00:21in line with the consensus.
00:22So if you're you're someone looking for opportunities or a trader, it's hard to see where the mispricing is.
00:27Obviously, there are bigger themes at play. But in the short term this week, we seem to have all eyes
00:32on the Trump-She summit, which is at the end of the week.
00:35We've just got the initial meeting seem to give us a positive tailwind until then.
00:40Oil prices are drifting lower, which is the other big dynamic out there.
00:43So it kind of feels like, sure, everything should be positive until we get the Trump-She decision.
00:48And the bias is for that to be positive as well.
00:50There's no incentive for either side to play particularly hardball in the short term to kind of really blow up
00:56the narrative.
00:56That would be more likely to come from the U.S. side. But ahead of the midterms, unlikely.
01:00So it seems it seems positive out there.
01:02I always get worried, though, when it just seems so consensus and when it's not obvious what the next risk
01:07in the horizon.
01:08But sure, that is positive in the short term.
01:10And you've got to remember, the bigger picture story here is that we've got incredible amount of liquidity.
01:15We've got massive fiscal expansion in the world.
01:18We've got incredible amount of capex.
01:19We've got good growth.
01:20We've got incredible earnings.
01:21The overall macro backdrop is incredibly positive.
01:25And every so often we flirt with the tactical risks of higher yields or disruption in energy markets.
01:31But overall, the macro backdrop is still very strong.
01:35Are European politics going to be a problem, Mark?
01:40They are completely.
01:42And I think Europe will remain in the kind of the doghouse and kind of be the vulnerable story.
01:46But from an equities perspective, European stock markets just don't matter as much anymore.
01:51I think seven of the eight largest stock markets in the world are between Asia and North America.
01:56You know, and that's where all the growth is, all the exciting stories are.
01:58So from an equity market story, people don't really care that, yeah, European stocks won't be as exciting, might be
02:03more vulnerable to energy disruption, to what's happening in the political side.
02:07Now, the bond story is more interesting.
02:08I think that's where you play the or that's where you focus on the European weakness.
02:12I think even though the latest, you know, bout of political concern comes out of Germany, it'll be France, which
02:19is the weak point.
02:20And I think that story is really going to be relevant as we go into elections next year.
02:26Mark, with your lens on FX, what do you think that means for euro dollar?
02:32I think the dollar has more upside generally.
02:34I'm surprised the dollar hasn't done even better since the FOMC.
02:38It's been working.
02:39And we talked about, you know, the two main takeaways probably from the FOMC is a further flattening of the
02:43curve and further their dollar strength.
02:45Those trades are working, but I'm surprised they haven't gone a bit further.
02:48I guess that because the positive mood out there, people are reallocating capital around the world.
02:54And, you know, some more of those opportunities seem to be in Asia for the next leg of the AI
02:57trade rather than the U.S.
02:59So I think there's a bit of that dynamic going against the U.S. at the moment.
03:02But I think the dollar strength can continue to do well.
03:05And as you point out, Tom, the European bond story is going to continue to weigh on euro sentiment.
03:10That said, I don't think euro dollar has like crazy downside.
03:13Maybe another couple of big figures.
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