Bloomberg Audio Studios, Podcasts, radio News. Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Chrisner. Stocks in Asia got off to an uneven start earlier today after a rally in US megacap tech names. In a moment, we'll be talking with Larry Tantarelli of blue Chip Daily Trend Report. We'll take a closer look at some of the price action in the States, but we'll begin in Hong Kong for a look at some of the recent volatility that we've been seeing in the foreign exchange. Joining me now is Jiwong, head of Greater China FX and Rate Strategy at BNP Periba, joining us from Hong Kong. Jiuw Wong, thank you so much for making time to chat with us. I think we can agree that a lot of the volatility that we have seen recently in the foreign exchange is really a story of dollar strength, and that really has been driven by US trade policy from the incoming Trump administration.

Bloomberg Audio Studios, Podcasts, radio News. Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Chrisner. Stocks in Asia got off to an uneven start earlier today after a rally in US megacap tech names. In a moment, we'll be talking with Larry Tantarelli of blue Chip Daily Trend Report. We'll take a closer look at some of the price action in the States, but we'll begin in Hong Kong for a look at some of the recent volatility that we've been seeing in the foreign exchange. Joining me now is Jiwong, head of Greater China FX and Rate Strategy at BNP Periba, joining us from Hong Kong. Jiuw Wong, thank you so much for making time to chat with us. I think we can agree that a lot of the volatility that we have seen recently in the foreign exchange is really a story of dollar strength, and that really has been driven by US trade policy from the incoming Trump administration.

Absolutely, we've seen the expectation building up for potential tariff since the US elections, and we're already three four months into the traits and at the current level, I think a lot has been pricing given the fact that the president did not announce tariffs in day one. I mean, of course he's still see talking about potentially introduced twenty five percent teriff for Mexico and Canada and ten percent for China by Feberal first, but the market thinking maybe there's still some uncertainties, particularly given he has announced the seventy five days reprieve for tiktoks, and I think the market treated that as a sign they could be still underneath the table negotiation on that. So the uncertainty is quite high. Hence we've seen the effects market treated quite a volatile dollar lower on are the day after the inauguration, but yesterday there was some squeezing backup in dollar reminb. But I would say overall the volatility the noise is still quite high. Here.

Absolutely, we've seen the expectation building up for potential tariff since the US elections, and we're already three four months into the traits and at the current level, I think a lot has been pricing given the fact that the president did not announce tariffs in day one. I mean, of course he's still see talking about potentially introduced twenty five percent teriff for Mexico and Canada and ten percent for China by Feberal first, but the market thinking maybe there's still some uncertainties, particularly given he has announced the seventy five days reprieve for tiktoks, and I think the market treated that as a sign they could be still underneath the table negotiation on that. So the uncertainty is quite high. Hence we've seen the effects market treated quite a volatile dollar lower on are the day after the inauguration, but yesterday there was some squeezing backup in dollar reminb. But I would say overall the volatility the noise is still quite high. Here.

The other thing is very interesting. There is the understanding, or at least the interpretation from a number of economists in the US that tariffs would be inflationary, and I think for the people at the Federal Reserve that is a big question. And if US interest rates must remain elevated to guard against inflationary pressure, that's only going to add to a stronger dollar. Will it not?

The other thing is very interesting. There is the understanding, or at least the interpretation from a number of economists in the US that tariffs would be inflationary, and I think for the people at the Federal Reserve that is a big question. And if US interest rates must remain elevated to guard against inflationary pressure, that's only going to add to a stronger dollar. Will it not?

Yes, absolutely, That's in line with the BNP's view that FED may not be able to cut rates as the market originally thinks. And then we also hold the view that the dollar will stay relatively high for longer, the euro can potentially test the parity and dollar remb eventually can go to zero point five. But I have to say for the very very new term, the uncertainty is high, particularly given the positioning is already very long dollar and shot the US durations, and the Trump's decision of not making tariffs effective immediately. It does suggest that he also is highly aware that inflation is a bit concern in the US. So, if anything, market treated his inauguration speech as he put a lot of priority on immigration issues, but second to that would be inflation. So certainly with him paying a lot of attention to inflation, that has added to the uncertainty on the tariff front in the very near term.

Yes, absolutely, That's in line with the BNP's view that FED may not be able to cut rates as the market originally thinks. And then we also hold the view that the dollar will stay relatively high for longer, the euro can potentially test the parity and dollar remb eventually can go to zero point five. But I have to say for the very very new term, the uncertainty is high, particularly given the positioning is already very long dollar and shot the US durations, and the Trump's decision of not making tariffs effective immediately. It does suggest that he also is highly aware that inflation is a bit concern in the US. So, if anything, market treated his inauguration speech as he put a lot of priority on immigration issues, but second to that would be inflation. So certainly with him paying a lot of attention to inflation, that has added to the uncertainty on the tariff front in the very near term.

So if the dollar remains strong and tariffs do remain a threat, what will the policy response in China look like, particularly if you want remains under pressure, we.

So if the dollar remains strong and tariffs do remain a threat, what will the policy response in China look like, particularly if you want remains under pressure, we.

Do you think a median term once the tariffs become effective. The PVC, the Chinese Central Bank will allow the dollar remain be fixing to go higher, and once we get the signal of a dollar fixing go beyond seven twenty and then then the market will immediately push start and bispot towards seven forty seven fifty ish level. At the same time, China's domestic policy will probably turn more pro growth. Today we're waiting for this press conference out of the State Console where they're going to introduce measures to encourage long term funds i e. The pensions, the social securities to enter the equity market. So capital market and fiscal policy and montreal policy, these will all be used as measures to support growth and partially to counter the negative impact coming from the US teriff front.

Do you think a median term once the tariffs become effective. The PVC, the Chinese Central Bank will allow the dollar remain be fixing to go higher, and once we get the signal of a dollar fixing go beyond seven twenty and then then the market will immediately push start and bispot towards seven forty seven fifty ish level. At the same time, China's domestic policy will probably turn more pro growth. Today we're waiting for this press conference out of the State Console where they're going to introduce measures to encourage long term funds i e. The pensions, the social securities to enter the equity market. So capital market and fiscal policy and montreal policy, these will all be used as measures to support growth and partially to counter the negative impact coming from the US teriff front.

In terms of the risk of capital outflows, when it comes to the one, how would you evaluate that risk right now? Is it high?

In terms of the risk of capital outflows, when it comes to the one, how would you evaluate that risk right now? Is it high?

I think the expectation of a un depreciation is quite high because most market participants, including US, believe that if there's a terriff, China will allow certain amount of RMB depreciation. But in terms of the managing the flows, I do think previously has a lot of room to manage the flows, because after all, we're talking about China taking a record nearly one training US or trades of plus that year last year that put in any history context, that's an enormous number. So even though interest realdiffential between the dollar and the rimanbee is very wide, but with that trade of plus and the capital controls in the portfolio side, there's still room plenty of room for China to ensure this RMB depreciation will be very, very measured. But at the same time, we do think there's a lot of money to leaving the men in China and go to the overseas market. And the first priority, you know, go to place would be the Hong Kong market.

I think the expectation of a un depreciation is quite high because most market participants, including US, believe that if there's a terriff, China will allow certain amount of RMB depreciation. But in terms of the managing the flows, I do think previously has a lot of room to manage the flows, because after all, we're talking about China taking a record nearly one training US or trades of plus that year last year that put in any history context, that's an enormous number. So even though interest realdiffential between the dollar and the rimanbee is very wide, but with that trade of plus and the capital controls in the portfolio side, there's still room plenty of room for China to ensure this RMB depreciation will be very, very measured. But at the same time, we do think there's a lot of money to leaving the men in China and go to the overseas market. And the first priority, you know, go to place would be the Hong Kong market.

I know your focus is mainly on Greater China, but I have to ask about Japan because we have a rate decision later in the week from the Bank of Japan. Expectations are that we're going to get a rate hike of twenty five basis points in the policy rate. How do you expect that to affect the foreign exchange? Hasn't a lot of this already been discounted when you look at the behavior of the end against the majors.

I know your focus is mainly on Greater China, but I have to ask about Japan because we have a rate decision later in the week from the Bank of Japan. Expectations are that we're going to get a rate hike of twenty five basis points in the policy rate. How do you expect that to affect the foreign exchange? Hasn't a lot of this already been discounted when you look at the behavior of the end against the majors.

Yes, absolutely, a lot has been pricing. I think the market is already pricing twenty one to twenty two basis points of rate hikes for this Friday's BUJ decision. Having said that, I mean it's a still diverging montary policy between BUJ and China. On top of that, with this terrorist more likely to hit China, Mexico, Canada, and Europe rather than Japan, we think you know, the valuation wise, the cnhyang is also at a relatively high level, so risk reward is quite good to sell the cnch versus Yang. We also have that trade on as as a median term recommendation.

Yes, absolutely, a lot has been pricing. I think the market is already pricing twenty one to twenty two basis points of rate hikes for this Friday's BUJ decision. Having said that, I mean it's a still diverging montary policy between BUJ and China. On top of that, with this terrorist more likely to hit China, Mexico, Canada, and Europe rather than Japan, we think you know, the valuation wise, the cnhyang is also at a relatively high level, so risk reward is quite good to sell the cnch versus Yang. We also have that trade on as as a median term recommendation.

At the moment, Jiuwang will leave it there. Thank you so much for making time to chat with us. Jiuwang ahead of Greater China FX and rate strategy at BNP Parabad. Joining us here on the Bloomberg Daybreak Asia podcast. Welcome back to the Daybreak Asia podcast. I'm Doug Chrisner. The US equity market rose to near record highs today on the back of a rally in big cap tech. We had the S and P closing up about six tens of one percent to six thousand and eighty six. That's four point shive an all time high, but most stocks in the benchmark actually fell. Of the eleven industry groups within the S and P, only two were positive, information tech and Communications service. For a closer look, I'm joined now by Larry Tantarelli. He is the chief technical strategist at blue Chip Daily Trend Report. Larry, thanks for making time to chat with us. I think it's fair to say that poor breadth in the market has been a concern for a while now, especially among those who have been a bit nervous about elevated levels of valuation. Does that concern you right now?

At the moment, Jiuwang will leave it there. Thank you so much for making time to chat with us. Jiuwang ahead of Greater China FX and rate strategy at BNP Parabad. Joining us here on the Bloomberg Daybreak Asia podcast. Welcome back to the Daybreak Asia podcast. I'm Doug Chrisner. The US equity market rose to near record highs today on the back of a rally in big cap tech. We had the S and P closing up about six tens of one percent to six thousand and eighty six. That's four point shive an all time high, but most stocks in the benchmark actually fell. Of the eleven industry groups within the S and P, only two were positive, information tech and Communications service. For a closer look, I'm joined now by Larry Tantarelli. He is the chief technical strategist at blue Chip Daily Trend Report. Larry, thanks for making time to chat with us. I think it's fair to say that poor breadth in the market has been a concern for a while now, especially among those who have been a bit nervous about elevated levels of valuation. Does that concern you right now?

It doesn't right now.

It doesn't right now.

We actually just came off of a major breadth thrust where for six days in a row, over sixty eight percent of the stocks and the S and P five hundred were higher. That's the longest on record. So the market's got to be overbought as far as the internals go. So I think today's pullback under the surface is constructive. The index was higher, but as you said, only thirty four percent of the SMP stocks were higher today.

We actually just came off of a major breadth thrust where for six days in a row, over sixty eight percent of the stocks and the S and P five hundred were higher. That's the longest on record. So the market's got to be overbought as far as the internals go. So I think today's pullback under the surface is constructive. The index was higher, but as you said, only thirty four percent of the SMP stocks were higher today.

What about the froth if I can use that term, that's been assigned to a lot of the these stocks that are related to artificial intelligence. Today we heard from the head of JP Morgan Chase Jamie Dimond. He was saying, there are signs that the market may be overheated, and I'm just imagining that he's kind of looking at the AI trade as an example.

What about the froth if I can use that term, that's been assigned to a lot of the these stocks that are related to artificial intelligence. Today we heard from the head of JP Morgan Chase Jamie Dimond. He was saying, there are signs that the market may be overheated, and I'm just imagining that he's kind of looking at the AI trade as an example.

I don't see it.

I don't see it.

If we look at valuations and the companies today versus let's say two thousand in the dot com bubble, and I was actively in the markets back then. The companies that are leading today are very cash rich, so Apple, Amazon, Google, Their valuations aren't very high if you look at their historical valuations, and I think that the earnings growth is there to support the valuations overall.

If we look at valuations and the companies today versus let's say two thousand in the dot com bubble, and I was actively in the markets back then. The companies that are leading today are very cash rich, so Apple, Amazon, Google, Their valuations aren't very high if you look at their historical valuations, and I think that the earnings growth is there to support the valuations overall.

One of the things that the bond market has been debating, and I think you're well aware of this fact, is whether President Trump's plans on tariffs have the potential to kind of push inflation up a bit. Today we had a bit of a move higher across the treasury curve in yields. Are you concerned that maybe some of the economic policies that we're getting from the new administration could contribute to maybe a little bit of upward pressure on inflation.

One of the things that the bond market has been debating, and I think you're well aware of this fact, is whether President Trump's plans on tariffs have the potential to kind of push inflation up a bit. Today we had a bit of a move higher across the treasury curve in yields. Are you concerned that maybe some of the economic policies that we're getting from the new administration could contribute to maybe a little bit of upward pressure on inflation.

Yes, that is a concern. So bond yields.

Yes, that is a concern. So bond yields.

The ten year treasury yield recently broke out to about four point eight zero, and we got lucky last week. The CPI from November actually came in a lower four December, so month over month CPI came in a lower. After that, the ten year treasury yields pulled back twenty three basis points. They trade at about four sixty right now. But yes, that is one of my concerns is if we get a breakout in bond yields, then I think that that would create some negative headwinds for stalks.

The ten year treasury yield recently broke out to about four point eight zero, and we got lucky last week. The CPI from November actually came in a lower four December, so month over month CPI came in a lower. After that, the ten year treasury yields pulled back twenty three basis points. They trade at about four sixty right now. But yes, that is one of my concerns is if we get a breakout in bond yields, then I think that that would create some negative headwinds for stalks.

Is there a level in yield on the tenure that would be particularly alarming to you? Would that be five percent?

Is there a level in yield on the tenure that would be particularly alarming to you? Would that be five percent?

It would be five percent, so five percent held when it was tested before over the past year or so, five percent is held. That is a major technical resistance level. And if for some reason we broke out over five percent, I think that the equity markets would have to adjust lower.

It would be five percent, so five percent held when it was tested before over the past year or so, five percent is held. That is a major technical resistance level. And if for some reason we broke out over five percent, I think that the equity markets would have to adjust lower.

So I know that you're a technical strategist, you focus a lot on the charts, But can I ask you about how Fed policy enters You're thinking sure.

So I know that you're a technical strategist, you focus a lot on the charts, But can I ask you about how Fed policy enters You're thinking sure.

So I absolutely pay attention to Fed policy because the FED really drives everything. And what we saw after their last meeting in December is when Jerome Powell came in a little bit more hawkish, and when the dot plot was adjusted lower, we saw the equity markets pulled back and we saw bond yields break out. So I absolutely pay attention to what the FED has to say. I think the FED is in a a very good spot right now. The economy is strong, the labor market is strong, Inflation is still sticky, but it has been moderating, and I think the FED is in a position where they can really sit.

So I absolutely pay attention to Fed policy because the FED really drives everything. And what we saw after their last meeting in December is when Jerome Powell came in a little bit more hawkish, and when the dot plot was adjusted lower, we saw the equity markets pulled back and we saw bond yields break out. So I absolutely pay attention to what the FED has to say. I think the FED is in a a very good spot right now. The economy is strong, the labor market is strong, Inflation is still sticky, but it has been moderating, and I think the FED is in a position where they can really sit.

They don't have to cut right now.

They don't have to cut right now.

Luckily, they don't have to raise, and I think that they can just sit wait to see how the economic data comes in. But what the markets know is if the labor market does get into trouble or if the economy starts to slow down, there is a FED put that's out there, but I don't think that they'll need to use it.

Luckily, they don't have to raise, and I think that they can just sit wait to see how the economic data comes in. But what the markets know is if the labor market does get into trouble or if the economy starts to slow down, there is a FED put that's out there, but I don't think that they'll need to use it.

I'm wondering how you're viewing markets offshore right now. Are there opportunities overseas that are particularly interesting.

I'm wondering how you're viewing markets offshore right now. Are there opportunities overseas that are particularly interesting.

Europe is starting to show a lot of strength. The DAX has been breaking out to new highs. There's a lot of European banks that are breaking out. HSBC has been very strong in Asia. I see stocks like Taiwan semi breaking out to new all time highs see Limited in Singapore is near three year highs. But overall, where I'm seeing a lot of strength as a region is in Europe.

Europe is starting to show a lot of strength. The DAX has been breaking out to new highs. There's a lot of European banks that are breaking out. HSBC has been very strong in Asia. I see stocks like Taiwan semi breaking out to new all time highs see Limited in Singapore is near three year highs. But overall, where I'm seeing a lot of strength as a region is in Europe.

When you look at some of the economic policies of the Trump administration, we were talking a moment ago about tariffs. I'm just wondering whether you're looking at maybe the reconfiguration of trade flows right now and whether that's entering your thinking at all.

When you look at some of the economic policies of the Trump administration, we were talking a moment ago about tariffs. I'm just wondering whether you're looking at maybe the reconfiguration of trade flows right now and whether that's entering your thinking at all.

I think that the tariffs might be more of a bargaining chip than anything else. And the reason that I say that is these economies are so interconnected. China is our biggest trading partner and vice versa. And I don't think that either country or Canada. I really don't think that anyone.

I think that the tariffs might be more of a bargaining chip than anything else. And the reason that I say that is these economies are so interconnected. China is our biggest trading partner and vice versa. And I don't think that either country or Canada. I really don't think that anyone.

Wants to upset the apple carts.

Wants to upset the apple carts.

So I know that tariffs are out there as a potential bargaining chip, and if they start to get enacted, then it could put some pressure on profits. That could put some pressure on certain currencies. But I don't know if the bite is going to be as strong as the bark.

So I know that tariffs are out there as a potential bargaining chip, and if they start to get enacted, then it could put some pressure on profits. That could put some pressure on certain currencies. But I don't know if the bite is going to be as strong as the bark.

What is the one theme, the investment theme that you're looking at this here that you expect will deliver the best return.

What is the one theme, the investment theme that you're looking at this here that you expect will deliver the best return.

I think right now it still has to be technology and AI, but not just the tech part of AI, but the industrial and the infrastructure build out. And obviously, yesterday the Stargate project was announced, and I think that's a major theme, at least for this year, but probably for the next few years because they've committed to five hundred billion dollars in AI data center spending and this was rolled out by the White House. They've got some very deep pocket investors, including the Abu Dhabi Sovereign Wealth Fund, So I think it's a very big commitment. And what we've seen over the past few days is not only has tech performed well, but a lot of industrial sector stocks have performed very well, power generation like nuclear. This data center infrastructure theme really permeates over quite a few sectors, and it's a long term secular theme. This is not going to be a six month or a one year window.

I think right now it still has to be technology and AI, but not just the tech part of AI, but the industrial and the infrastructure build out. And obviously, yesterday the Stargate project was announced, and I think that's a major theme, at least for this year, but probably for the next few years because they've committed to five hundred billion dollars in AI data center spending and this was rolled out by the White House. They've got some very deep pocket investors, including the Abu Dhabi Sovereign Wealth Fund, So I think it's a very big commitment. And what we've seen over the past few days is not only has tech performed well, but a lot of industrial sector stocks have performed very well, power generation like nuclear. This data center infrastructure theme really permeates over quite a few sectors, and it's a long term secular theme. This is not going to be a six month or a one year window.

Larry will leave it. There are interesting insights from Larry Tenterelli. He is the chief technical strategist at blue Chip Daily Trend Report. Joining us here on the Daybreak Asia podcast. Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the story shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotifyoomberg Podcast YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Prisoner and this is Bloomberg

Larry will leave it. There are interesting insights from Larry Tenterelli. He is the chief technical strategist at blue Chip Daily Trend Report. Joining us here on the Daybreak Asia podcast. Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the story shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotifyoomberg Podcast YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Prisoner and this is Bloomberg