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TRANSCRIPT
0 minutes
Well, let's get at a bit of analysis on what's going on in these markets.
0 minutes 2 seconds
We can speak to Chris Watling, CEO and Chief Market Strategist over at Longview Economics.
0 minutes 6 seconds
And I'm pleased to say he joins us around the table this morning.
0 minutes 8 seconds
Chris, welcome to the programme.
0 minutes 11 seconds
You've been writing about summer turbulence, but all I'm seeing this morning is green across my screen.
0 minutes 16 seconds
We're expecting a stronger session to end the week stateside as well.
0 minutes 19 seconds
Where is this summer turbulence going to come from?
0 minutes 21 seconds
Is the Cliff edge going to be August the 1st?
0 minutes 24 seconds
Well, I mean, some is typically a seasonally tough.
0 minutes 27 seconds
But actually markets in the US haven't done that much in July.
0 minutes 30 seconds
They're sort of edging to new highs, but they're not, they've lost a lot of their momentum.
7 minutes 20 seconds
We have been since January this year.
7 minutes 21 seconds
And I think that still makes sense when you sorry, go ahead.
7 minutes 24 seconds
I wasn't say there's an argument when it comes to the right time to buy bonds as well.
7 minutes 29 seconds
There's an argument that as we approach the X state on the deficit in the United States, there might be a, a better time to clip the coupon, a better time to hop into the yield.
7 minutes 38 seconds
Well, people worry about this fiscal crisis.
7 minutes 40 seconds
I mean, the reality is I, I think that's wholly mischaracterized.
7 minutes 43 seconds
I'm, I'm totally with Steve Eisman on this.
7 minutes 45 seconds
I mean, we, we obsess, you know, the market knows what's going on in terms of the deficit.
7 minutes 49 seconds
And actually the tariffs are probably going to pay for pretty much the whole thing.
7 minutes 52 seconds
So, so how fiscally poor is it?
7 minutes 56 seconds
You know, it's in, it's in the price.
7 minutes 59 seconds
So I, I, I, I don't expect much higher yields from here.
8 minutes 2 seconds
I think lower yields is what you need, and I think we'll get those over the course of the next few months, possibly over the summer if we get this turbulence in the equity market.
8 minutes 9 seconds
But when you've got the president weighing on the Fed chair and funding his fiscal plans as T-bills, does that not, Chris, add up to fiscal dominance?
8 minutes 18 seconds
Yeah, sure.
8 minutes 19 seconds
There's a little bit of that.
8 minutes 20 seconds
And and that's a little bit of a concern.
8 minutes 22 seconds
And that maybe adds a bit of a bit of a risk premium into the bond market.
8 minutes 26 seconds
Absolutely.
8 minutes 27 seconds
But, you know, there's a lot of people on the Fed committee.
8 minutes 29 seconds
It's not just the chair.
8 minutes 30 seconds
And he's not going to get rid of all of them.
8 minutes 32 seconds
And, and, and, you know, I know we had all this chat from Kevin Walsh yesterday, which I thought was kind of interesting.
8 minutes 38 seconds
But so, yeah, there's an element of that.
8 minutes 41 seconds
But I think you can overplay these things.
8 minutes 43 seconds
And these will become popular narratives in markets at certain points in time.
8 minutes 47 seconds
But the reality is the US economy is softening and yields therefore need to go lower.
8 minutes 52 seconds
All right.
8 minutes 53 seconds
Chris Watling, CEO and chief market strategist over at Longview Economics.
8 minutes 56 seconds
We'll see how low those yields go.
8 minutes 57 seconds
We thank you so much.