Bloomberg Audio Studios, Podcasts, radio news.

Bloomberg Audio Studios, Podcasts, radio news.

This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. Now, James Lord joins it, global Head of fx EM Strategy at Morgan Stanley. James, you got to rewrite to get the June thirtieth. You're going to do a midyear review. Where is the big figure play in four in exchange? If it's a blurb, if it's complex, there's macro this, macro that. Where is a place where I can actually speculate and make money on a currency pair?

This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. Now, James Lord joins it, global Head of fx EM Strategy at Morgan Stanley. James, you got to rewrite to get the June thirtieth. You're going to do a midyear review. Where is the big figure play in four in exchange? If it's a blurb, if it's complex, there's macro this, macro that. Where is a place where I can actually speculate and make money on a currency pair?

Hey, Tom, thanks very much for having me back on the show. I mean, our currency forecasts generally see a bit of dollar strength coming through, but probably the biggest movers that you would that you that were forecasting are things like being short Euro versus long commodity currencies and long risk currencies. I mean, the overall dollar environment that we're expecting to see is one of modest strength, but you kind of get a really split dollar where the dollars kind of outperforming versus some of the low yielders, so things like Swiss frank and European the euro, but really underperforming against some some of the risk currencies like Aussie dollar, South African rand, Turkish lira. I mean, these these kind of currencies are more risky ones, high yelders is where we expect to see the bigger moves.

Hey, Tom, thanks very much for having me back on the show. I mean, our currency forecasts generally see a bit of dollar strength coming through, but probably the biggest movers that you would that you that were forecasting are things like being short Euro versus long commodity currencies and long risk currencies. I mean, the overall dollar environment that we're expecting to see is one of modest strength, but you kind of get a really split dollar where the dollars kind of outperforming versus some of the low yielders, so things like Swiss frank and European the euro, but really underperforming against some some of the risk currencies like Aussie dollar, South African rand, Turkish lira. I mean, these these kind of currencies are more risky ones, high yelders is where we expect to see the bigger moves.

I mean, Paul, I know you were like, you know, you look at the vector of euro Chilean pace. Sure what you can do on the bloombern now e r Colp. I mean, James Lord has got a two on his left arm and the answer is you've had a nice move strong Chillon pace.

I mean, Paul, I know you were like, you know, you look at the vector of euro Chilean pace. Sure what you can do on the bloombern now e r Colp. I mean, James Lord has got a two on his left arm and the answer is you've had a nice move strong Chillon pace.

So who didn't have that a beginning of the year. So let's James, let's just talk about the en that's been in the news.

So who didn't have that a beginning of the year. So let's James, let's just talk about the en that's been in the news.

Here.

Here.

We're pushing up close to one fifty six year one fifty five spots seventy three. What's going on with the end? How do you think this is going to play out? What's the Bank of Japan going to be doing here?

We're pushing up close to one fifty six year one fifty five spots seventy three. What's going on with the end? How do you think this is going to play out? What's the Bank of Japan going to be doing here?

Yeah, I mean we think dolly n's really driven by US rates. I mean clearly, clearly what happens with the BOJ is important. But if you if you look at it sort of statistically, like most of the majority of the move in dolly N is explained by by how by how the dollar rates behave And it's yeah, partly just simply because of the fact that they're clearly much more volatile at such a higher level of yield, and we're forecasting US rates to come down. I mean, Matt hornback net Dinger and team have you US tenure back down at four point one percent at the end of the year on the back of three rate cuts from FED, and that should support a lower dollar en. So I mean, it's difficult to buy it just because of the negative carry, But we see dollar en going back down to around one forty by the end of the year, which is it's a little bit, a little bit more than what the forwards are suggesting, but it's not it's not really a great trade considering that the carry you have to pay.

Yeah, I mean we think dolly n's really driven by US rates. I mean clearly, clearly what happens with the BOJ is important. But if you if you look at it sort of statistically, like most of the majority of the move in dolly N is explained by by how by how the dollar rates behave And it's yeah, partly just simply because of the fact that they're clearly much more volatile at such a higher level of yield, and we're forecasting US rates to come down. I mean, Matt hornback net Dinger and team have you US tenure back down at four point one percent at the end of the year on the back of three rate cuts from FED, and that should support a lower dollar en. So I mean, it's difficult to buy it just because of the negative carry, But we see dollar en going back down to around one forty by the end of the year, which is it's a little bit, a little bit more than what the forwards are suggesting, but it's not it's not really a great trade considering that the carry you have to pay.

So given your your interest rate outlook for the US Federal Reserve, I mean, I just can't think of a dollar bare case. I haven't been able to think of one for a long time exactly. So I mean, does a dollar maybe drift a little bit lower just on this rate environment?

So given your your interest rate outlook for the US Federal Reserve, I mean, I just can't think of a dollar bare case. I haven't been able to think of one for a long time exactly. So I mean, does a dollar maybe drift a little bit lower just on this rate environment?

Yeah, I mean so if you if you take our US rate forecast just all else being equal, then and then it should suggest that the dollar comes down, comes down a bit. But the problem of that is that when we look at the yield differentials of the dollar versus on to say, on a d X y basis, that we're expecting to see bund yields fall by even more than what we're expecting to see treasure yields fall. So you know, if the US inflation comes down, it gives the Fed a bit more space to then you're going to see markets pricing even bigger easing cycles from from the rest of the world. And you know, we think the ECB is part of that. So actually yield differentials will move we think in the dollar's favor. We still have US growth outperforming the rest of the world. US stocks doing very well, there's a lot to like about the US dollar.

Yeah, I mean so if you if you take our US rate forecast just all else being equal, then and then it should suggest that the dollar comes down, comes down a bit. But the problem of that is that when we look at the yield differentials of the dollar versus on to say, on a d X y basis, that we're expecting to see bund yields fall by even more than what we're expecting to see treasure yields fall. So you know, if the US inflation comes down, it gives the Fed a bit more space to then you're going to see markets pricing even bigger easing cycles from from the rest of the world. And you know, we think the ECB is part of that. So actually yield differentials will move we think in the dollar's favor. We still have US growth outperforming the rest of the world. US stocks doing very well, there's a lot to like about the US dollar.

I mean, and your latest report. I mean, they've got enough people in this room now side it's like the sideline of the New York Giants. You know, it's like amazing. I mean, all of a sudden, you haven't talked to Amy Gower in like ten years. All of a sudden you're talking to one of your commodity strategies. What are people like Amy Gower telling you? How are they assisting you in speculation and investment forward at the commodity world? How do you bounce off that right now?

I mean, and your latest report. I mean, they've got enough people in this room now side it's like the sideline of the New York Giants. You know, it's like amazing. I mean, all of a sudden, you haven't talked to Amy Gower in like ten years. All of a sudden you're talking to one of your commodity strategies. What are people like Amy Gower telling you? How are they assisting you in speculation and investment forward at the commodity world? How do you bounce off that right now?

James Lord, Yeah, well, Amy's been very bullish on copper. She's she's had a great call on that, and you know it's clearly it's clearly helping. You know, your reference to your chilly that would have been a great trade. We think that is still a great trade.

James Lord, Yeah, well, Amy's been very bullish on copper. She's she's had a great call on that, and you know it's clearly it's clearly helping. You know, your reference to your chilly that would have been a great trade. We think that is still a great trade.

I mean it's not.

I mean it's not.

I would say prices are not feeding through completely into intercurrency markets these days, partly because this is a large part of this is a supply story. You've had my enclosure is a lot of difficulty getting copper out of the ground, and that's really boosted the price, but it doesn't have the same impact on metal on currencies that really depend on the revenue of that because the volumes are going down, and it's not necessarily an indicator of global growth if the price is going up because of supply reasons. So generally you see that across all commodities. Actually, if the price is if the price is changing of supply, it doesn't have the same impact on modity currencies as you would typically expect.

I would say prices are not feeding through completely into intercurrency markets these days, partly because this is a large part of this is a supply story. You've had my enclosure is a lot of difficulty getting copper out of the ground, and that's really boosted the price, but it doesn't have the same impact on metal on currencies that really depend on the revenue of that because the volumes are going down, and it's not necessarily an indicator of global growth if the price is going up because of supply reasons. So generally you see that across all commodities. Actually, if the price is if the price is changing of supply, it doesn't have the same impact on modity currencies as you would typically expect.

But the es this is important. The heritage of Morgan Stanley and commodities goes back to Rushier Charman. Now at Rockefeller is Morgan Stanley saying there's a legit commodity cycle now or is a set of one offs that put orange juice to the moon.

But the es this is important. The heritage of Morgan Stanley and commodities goes back to Rushier Charman. Now at Rockefeller is Morgan Stanley saying there's a legit commodity cycle now or is a set of one offs that put orange juice to the moon.

I mean we like metals. I mean copper and other industrial metals are part of it. Gold prices as well. I mean we do see some more upside in those names. Not a ton in in energy and oil, but I mean I think it's more interesting to look at it on the metal space, given given the energy transition and and and and and some some of the supply constraints that you're seeing there, and some of some of that feeds through into gold in terms of how how the fiscal is evolving in the US. It's always concerns about that. And if if the dollar goes down then tip then typically you would see some some gold price. If US rates come down, then typically you would see gold prices being supported. So I wouldn't say it's like across the board in commodities, but yeah, a little bit more selective and biased towards.

I mean we like metals. I mean copper and other industrial metals are part of it. Gold prices as well. I mean we do see some more upside in those names. Not a ton in in energy and oil, but I mean I think it's more interesting to look at it on the metal space, given given the energy transition and and and and and some some of the supply constraints that you're seeing there, and some of some of that feeds through into gold in terms of how how the fiscal is evolving in the US. It's always concerns about that. And if if the dollar goes down then tip then typically you would see some some gold price. If US rates come down, then typically you would see gold prices being supported. So I wouldn't say it's like across the board in commodities, but yeah, a little bit more selective and biased towards.

Metals, James.

Metals, James.

In the emerging markets here. We just had Damian sasaar On from Bloomberg Intelligence giving us his thoughts here. Yeah, where do you see the opportunities here, James, We're I mean, there's just so much, so many cross currents here.

In the emerging markets here. We just had Damian sasaar On from Bloomberg Intelligence giving us his thoughts here. Yeah, where do you see the opportunities here, James, We're I mean, there's just so much, so many cross currents here.

Yeah, I mean we we we like we like Turkish lera, right, I mean in this time zone, we we think we think Turkeyshilerea is is a good story. I mean, it's it's difficult to having been through many cycles of the Turkish leyer over the past ten years, no cycles are typically being bearished. It's quite hard to sort of push along Turkish layer review with a lot of conviction. But we do see that, you know, we do believe that the changes that are ongoing in that country in terms of policy are going to be sustained for for some time, so we think Turkish leaber will outperform the forwards. You can pick up some carry. We think that's an improving story.

Yeah, I mean we we we like we like Turkish lera, right, I mean in this time zone, we we think we think Turkeyshilerea is is a good story. I mean, it's it's difficult to having been through many cycles of the Turkish leyer over the past ten years, no cycles are typically being bearished. It's quite hard to sort of push along Turkish layer review with a lot of conviction. But we do see that, you know, we do believe that the changes that are ongoing in that country in terms of policy are going to be sustained for for some time, so we think Turkish leaber will outperform the forwards. You can pick up some carry. We think that's an improving story.

We've got to leave it just because of the time. James Lord, thank you so much greatly. I appreciate it. With Morgan Stanley this morning driving all of their foreign exchange, I've really been anticipating this conversation. Joining us out from Wells Fargo with a really really bright William and Mary take on asset allocation strategies. Tracy McMillian, she could join us. Good morning, Winston Salem, North Carolina.

We've got to leave it just because of the time. James Lord, thank you so much greatly. I appreciate it. With Morgan Stanley this morning driving all of their foreign exchange, I've really been anticipating this conversation. Joining us out from Wells Fargo with a really really bright William and Mary take on asset allocation strategies. Tracy McMillian, she could join us. Good morning, Winston Salem, North Carolina.

Writing town.

Writing town.

Tracy. You know, I look at your research note and it's just completely dead on about almost the numbness I felt this weekend about this great bull market color the exuberance for a stock market that you see at Wells Fargo.

Tracy. You know, I look at your research note and it's just completely dead on about almost the numbness I felt this weekend about this great bull market color the exuberance for a stock market that you see at Wells Fargo.

Yes, thanks for having me on this morning, Tom. I agree. We've seen a lot of exuberance in the market since last October, and a lot of that has been fueled by better earnings. We saw an earnings recession turn to in earnings recovery, and so that's fueled some of that exuberants. But there's also just a lot of momentum in this market right now, and that also is fueling turn that we're seeing.

Yes, thanks for having me on this morning, Tom. I agree. We've seen a lot of exuberance in the market since last October, and a lot of that has been fueled by better earnings. We saw an earnings recession turn to in earnings recovery, and so that's fueled some of that exuberants. But there's also just a lot of momentum in this market right now, and that also is fueling turn that we're seeing.

I mean, what's really important to me is like the cab driver taken the tour, but they get off the plane and when you know, they get off the plane, Paul, they've got to go to Wake Forest. Yeah, you know, is the cab driver or the uber driver in your burg? Are they talking about the stock market?

I mean, what's really important to me is like the cab driver taken the tour, but they get off the plane and when you know, they get off the plane, Paul, they've got to go to Wake Forest. Yeah, you know, is the cab driver or the uber driver in your burg? Are they talking about the stock market?

Probably so, and that's very reminiscent of the late nineteen nineties, isn't it.

Probably so, and that's very reminiscent of the late nineteen nineties, isn't it.

So.

So.

The difference though, is that this time we are seeing these rises in the market supported by higher earnings and a lot of a lot of policy has contributed to these higher stock market prices this time. So there's some fundamental justification behind some of the rises that we've seen. However, there are pockets of the market that are probably getting a little overpriced. You know, communication services has done really well this year, information technology has done really well. Those are areas where we'd be trimming and putting that pat into short term fixed income and just waiting for a.

The difference though, is that this time we are seeing these rises in the market supported by higher earnings and a lot of a lot of policy has contributed to these higher stock market prices this time. So there's some fundamental justification behind some of the rises that we've seen. However, there are pockets of the market that are probably getting a little overpriced. You know, communication services has done really well this year, information technology has done really well. Those are areas where we'd be trimming and putting that pat into short term fixed income and just waiting for a.

Better operation, for that big correction to come in, Paul. Just to be clear, wells Fargo's got to publish twenty twenty five of SPX fifty seven hundred. These are not they're in the game. Wells Fargo is saying you got to participate.

Better operation, for that big correction to come in, Paul. Just to be clear, wells Fargo's got to publish twenty twenty five of SPX fifty seven hundred. These are not they're in the game. Wells Fargo is saying you got to participate.

So, Tracy, if we do want to go into some fixed income lock and some yield here, do I stick with the treasury market and I get a four point eight percent for a two year treasury? Or do I maybe take some credit risk? How are you guys thinking about that?

So, Tracy, if we do want to go into some fixed income lock and some yield here, do I stick with the treasury market and I get a four point eight percent for a two year treasury? Or do I maybe take some credit risk? How are you guys thinking about that?

Yeah, so we're saying that in the shorter term or that or that cash, we would be holding short term fixed income, and the treasury market's a good place to do that with very little interest rate or very low credit risk, very little interest rate risk as well.

Yeah, so we're saying that in the shorter term or that or that cash, we would be holding short term fixed income, and the treasury market's a good place to do that with very little interest rate or very low credit risk, very little interest rate risk as well.

And then we.

And then we.

Would supplement that with high grade corporate credit, and we would be more concerned about investing in high yield fixed income at this point, especially since spreads have come in so much. We just don't see the risk reward value there that we do in corporate credits that are our higher quality.

Would supplement that with high grade corporate credit, and we would be more concerned about investing in high yield fixed income at this point, especially since spreads have come in so much. We just don't see the risk reward value there that we do in corporate credits that are our higher quality.

So, Tracy, back to the equity side here, I see a lot of spending coming out of Washington, DC, for better or worse in the Investment Reduction Act and so on and so forth. The CHIPS Act does that does that translate into maybe how I should invest it. I look at some of the industries that might do well there, and so how are you guys thinking about it?

So, Tracy, back to the equity side here, I see a lot of spending coming out of Washington, DC, for better or worse in the Investment Reduction Act and so on and so forth. The CHIPS Act does that does that translate into maybe how I should invest it. I look at some of the industries that might do well there, and so how are you guys thinking about it?

Sure?

Sure?

Yes, absolutely, we're looking at corporation, our corporations sectors that would benefit from both the Chips Act and from the Infrastructure Act. So we like companies that are in the material space, the industrial space, energy space, and we also like healthcare. Not as much of a beneficiary of those apps as the others, but also an area of the market where we see some value.

Yes, absolutely, we're looking at corporation, our corporations sectors that would benefit from both the Chips Act and from the Infrastructure Act. So we like companies that are in the material space, the industrial space, energy space, and we also like healthcare. Not as much of a beneficiary of those apps as the others, but also an area of the market where we see some value.

What does Jay Brison say then about international I mean, bring it over to asset allocation. I've known wells far going to be hugely US centric. Has that changed?

What does Jay Brison say then about international I mean, bring it over to asset allocation. I've known wells far going to be hugely US centric. Has that changed?

That really has not changed. We still have a longer term overweight to US relative to the global market capitalization, and right now we also have a shorter term were tactical positioning where we're overweight US as well. And again that's that quality theme upon quality US large caps over small caps and develop markets over emerging markets.

That really has not changed. We still have a longer term overweight to US relative to the global market capitalization, and right now we also have a shorter term were tactical positioning where we're overweight US as well. And again that's that quality theme upon quality US large caps over small caps and develop markets over emerging markets.

One final question, I mean, if we go out one year, you're going to stagger into May June of twenty twenty five. I can't believe I'm saying that does sixty forty work Tracy mcmillion, Yes.

One final question, I mean, if we go out one year, you're going to stagger into May June of twenty twenty five. I can't believe I'm saying that does sixty forty work Tracy mcmillion, Yes.

Sixty forty works out a year. In fact, we do see higher equity markets, as you pointed out in twenty twenty five, and we also think that if these higher rates, bonds are offering very attractive opportunities for investors. So we do see sixty forty working for relations starting to be less positive than they've been over the past couple of years, and that will have a diversification impact as well.

Sixty forty works out a year. In fact, we do see higher equity markets, as you pointed out in twenty twenty five, and we also think that if these higher rates, bonds are offering very attractive opportunities for investors. So we do see sixty forty working for relations starting to be less positive than they've been over the past couple of years, and that will have a diversification impact as well.

Tracy McMillian, thank you so much. With well spargo George Saravellas, he's Deutsche Bank writing brilliant, brilliant notes. I just can't say enough about what he writes on foreign exchange as well, and we're going to bring in George Sarah Wilson. We'll we'll do the Bloomberg Business Flash after that. George, I look at the theme into the Summer and to me, it's a jumble. What is your coherent theme into the summer?

Tracy McMillian, thank you so much. With well spargo George Saravellas, he's Deutsche Bank writing brilliant, brilliant notes. I just can't say enough about what he writes on foreign exchange as well, and we're going to bring in George Sarah Wilson. We'll we'll do the Bloomberg Business Flash after that. George, I look at the theme into the Summer and to me, it's a jumble. What is your coherent theme into the summer?

Good to hear your voice, Tom, good morning. So our theme is low vall. Persisting in an environment of low volatility carry tends to do quite well, so in effects you should see more of the same. But I think a crucial point is the dollar is a high yielding currency, and if you think about the start of the year, so many people made the argument that if equities go up, the dollar should weaken, and the dollar strong despite equities at record highs, and that's because it's part of the carry trade. So we're positive on the dollar and we're positive on carry as well.

Good to hear your voice, Tom, good morning. So our theme is low vall. Persisting in an environment of low volatility carry tends to do quite well, so in effects you should see more of the same. But I think a crucial point is the dollar is a high yielding currency, and if you think about the start of the year, so many people made the argument that if equities go up, the dollar should weaken, and the dollar strong despite equities at record highs, and that's because it's part of the carry trade. So we're positive on the dollar and we're positive on carry as well.

Are the correlations in place across equities, bounds, currencies and commodities in the moon shot and commodities so much? Are those correlations normal right now into the summer? George saravellis.

Are the correlations in place across equities, bounds, currencies and commodities in the moon shot and commodities so much? Are those correlations normal right now into the summer? George saravellis.

Well, I would say that' very different from last year.

Well, I would say that' very different from last year.

And this is something we've been writing about for a while because if you look at the last few years, the world was dominated by this negative supply shop, so you had low growth, high inflation. That was bad for equities and it was bad for bonds as well. But now we're in a more normal world, so to speak, and it's all about demand. Do you have demand holding in and therefore you can have yields still high, which you do, but equity strong as well because the demand side of the economy is proving very resilient to these high levels of central bank rates. So I would say the correlation has gone back to being a bit more normal after being a lot more abnormal over the last few years.

And this is something we've been writing about for a while because if you look at the last few years, the world was dominated by this negative supply shop, so you had low growth, high inflation. That was bad for equities and it was bad for bonds as well. But now we're in a more normal world, so to speak, and it's all about demand. Do you have demand holding in and therefore you can have yields still high, which you do, but equity strong as well because the demand side of the economy is proving very resilient to these high levels of central bank rates. So I would say the correlation has gone back to being a bit more normal after being a lot more abnormal over the last few years.

So George, give us your thoughts, your perspective here with a little bit of hindsight, what's happening with the Japanese end, what has happened over the last several weeks, and kind of what's your view here.

So George, give us your thoughts, your perspective here with a little bit of hindsight, what's happening with the Japanese end, what has happened over the last several weeks, and kind of what's your view here.

It's probably the most interesting currency in develop markets at the moment. I think what's happening is simple that the Bank of Japan is just too slow. It's very duvish, which means if you look at real rates in Japan their minus two percent. So everyone else, even the Swiss, have positive rates with a one handle or above, and Japan still stands out. So even though policy is normalizing, it's normalizing from such a low base that it doesn't do anything to materially erode that carry disadvantage which the yen has.

It's probably the most interesting currency in develop markets at the moment. I think what's happening is simple that the Bank of Japan is just too slow. It's very duvish, which means if you look at real rates in Japan their minus two percent. So everyone else, even the Swiss, have positive rates with a one handle or above, and Japan still stands out. So even though policy is normalizing, it's normalizing from such a low base that it doesn't do anything to materially erode that carry disadvantage which the yen has.

So we think as long as the Bank of Japan goes very slow, which they are, the yen will stay weak.

So we think as long as the Bank of Japan goes very slow, which they are, the yen will stay weak.

And they're going slow because they still don't believe inflation is at two.

And they're going slow because they still don't believe inflation is at two.

Percent, right exactly. So if we think about the US dollar, then in that context, I mean, is there any reason to think this dollar will not remain strong here versus pretty much everything else else out there.

Percent, right exactly. So if we think about the US dollar, then in that context, I mean, is there any reason to think this dollar will not remain strong here versus pretty much everything else else out there.

Well, I think there are two ways you can get a week dollar. The one is if you believe in a US recession and therefore a sharp fed cutting cycle, which many people did six months ago. But we have believed in that scenario for a while. So from my perspective, even if you get effect cutting cycle, it's not going to be steeped.

Well, I think there are two ways you can get a week dollar. The one is if you believe in a US recession and therefore a sharp fed cutting cycle, which many people did six months ago. But we have believed in that scenario for a while. So from my perspective, even if you get effect cutting cycle, it's not going to be steeped.

The dollar is still going to be a high yielder.

The dollar is still going to be a high yielder.

So that's one scenario to get a week dollar. The other one is if you get a week dollar policy after the US election.

So that's one scenario to get a week dollar. The other one is if you get a week dollar policy after the US election.

And what I mean by that is not.

And what I mean by that is not.

Just statements on the dollar, but outright policy to restrict capital.

Just statements on the dollar, but outright policy to restrict capital.

Inflows for example foreigners.

Inflows for example foreigners.

We don't think that's going to happen either, instead of think we're going to get restrictive trade policy.

We don't think that's going to happen either, instead of think we're going to get restrictive trade policy.

So we're in the dollar stronger for longer.

So we're in the dollar stronger for longer.

Camp George, fold your expertise on foreign exchange into gold to the moon, and I'm going to state it is a basic idea at the margins central banks are buying gold. If they're buying gold, are they owning less dollars? Give us a paragraph on that.

Camp George, fold your expertise on foreign exchange into gold to the moon, and I'm going to state it is a basic idea at the margins central banks are buying gold. If they're buying gold, are they owning less dollars? Give us a paragraph on that.

So many people, I think, look at the relationship between gold and the dollar and say, well, gold is going up because there's flight from the dollar. People are worried about US fiscal sustainability, and therefore we should more generally.

So many people, I think, look at the relationship between gold and the dollar and say, well, gold is going up because there's flight from the dollar. People are worried about US fiscal sustainability, and therefore we should more generally.

Be worried about the dollar. I don't think that's the case at all. If you look at what's going on this.

Be worried about the dollar. I don't think that's the case at all. If you look at what's going on this.

Year, there's two things that are doing very well, gold and the dollar at the same time. So there's someone in the market there that likes both the dollar and gold, and I would argue this is the outcome of essentially decoupling in deglobalization, where if you look at China, for example, this is very public data. You have accumulation of gold reserves on the official sector side, but on the private sector side, the private sector wants to go into dollars, so you have capital flight from China away from the local currency, which is why the UN is so weak, and it's going both dollars and gold at the same time.

Year, there's two things that are doing very well, gold and the dollar at the same time. So there's someone in the market there that likes both the dollar and gold, and I would argue this is the outcome of essentially decoupling in deglobalization, where if you look at China, for example, this is very public data. You have accumulation of gold reserves on the official sector side, but on the private sector side, the private sector wants to go into dollars, so you have capital flight from China away from the local currency, which is why the UN is so weak, and it's going both dollars and gold at the same time.

What's your euro call, please? I mean, we've got some people talking you're a weakness to parody. Where are you on that?

What's your euro call, please? I mean, we've got some people talking you're a weakness to parody. Where are you on that?

So we have the URO effectively doing a range that's quite similar to last year.

So we have the URO effectively doing a range that's quite similar to last year.

So if you think about.

So if you think about.

Last year it was around one of five to one thirteen. I'd say the risks to that range the biased lower, but basically one to one ten for me is a range that's quite realistic for this year.

Last year it was around one of five to one thirteen. I'd say the risks to that range the biased lower, but basically one to one ten for me is a range that's quite realistic for this year.

All right, Tom and I are thinking about coming over to London. We've got the suite book at the NED here. How concerned should we be about this? The British pound here? What's you call there?

All right, Tom and I are thinking about coming over to London. We've got the suite book at the NED here. How concerned should we be about this? The British pound here? What's you call there?

I wouldn't be that concerned.

I wouldn't be that concerned.

The pound tends to follow the dollar in general, so if the dollars from against the euro, it's very likely it stays cheap against it stays expensive against the.

The pound tends to follow the dollar in general, so if the dollars from against the euro, it's very likely it stays cheap against it stays expensive against the.

Pound as well.

Pound as well.

You have to, though, think about one thing, which is the UK election coming up. It shouldn't lead to any major change in policy unless you get a tail supprise outcome, and I stress this is a tail outcome of potentially the second party, because everyone expects Labor to be the first. If the second party that wins is the Liberal Democrats as opposed to the concern relatives again distant but not a non zero probability, then you could have the market thinking of a much more pro European stance that could help the pound. So it's a tail scenario, but it's the first time where it's imported to tail rather than a negative one.

You have to, though, think about one thing, which is the UK election coming up. It shouldn't lead to any major change in policy unless you get a tail supprise outcome, and I stress this is a tail outcome of potentially the second party, because everyone expects Labor to be the first. If the second party that wins is the Liberal Democrats as opposed to the concern relatives again distant but not a non zero probability, then you could have the market thinking of a much more pro European stance that could help the pound. So it's a tail scenario, but it's the first time where it's imported to tail rather than a negative one.

Georg Serave Ellos, thank you so much. With Deuigia bank here you j look at the front pages. She was looking at him through halftime at the NIXT yesterday. Lisa matayl what do you have?

Georg Serave Ellos, thank you so much. With Deuigia bank here you j look at the front pages. She was looking at him through halftime at the NIXT yesterday. Lisa matayl what do you have?

All right, we're starting with the sports kind of center thing since we were talking about the next one. Not okay, Axios is actually reporting Amazon nearing a deal that would make its streaming service Prime one of the partners of the NBA, one of three partners of the NBA. So it's going to add a misk of regular season playoff games, Suprime. I mean Amazon has been pushing though this streaming. You know, the NFL's Thursday Night Football. They extended a deal with the WNBA for two more seasons. NASCAR is coming.

All right, we're starting with the sports kind of center thing since we were talking about the next one. Not okay, Axios is actually reporting Amazon nearing a deal that would make its streaming service Prime one of the partners of the NBA, one of three partners of the NBA. So it's going to add a misk of regular season playoff games, Suprime. I mean Amazon has been pushing though this streaming. You know, the NFL's Thursday Night Football. They extended a deal with the WNBA for two more seasons. NASCAR is coming.

To I'm so glad you brought this up because Paul I thought of you this weekend. It's not going to be like a gradual thing. The streamers are just going.

To I'm so glad you brought this up because Paul I thought of you this weekend. It's not going to be like a gradual thing. The streamers are just going.

To say now when when these deals come up for renewal, Tom, I think the expectation is on all sides that these big tech companies to streamers will be there Thursday night. Yankee games for the past couple of seasons have been on there, and you know the old Yankee fans up in the Bronx, they're calling up sports talk radio saying, how do I get the game tonight?

To say now when when these deals come up for renewal, Tom, I think the expectation is on all sides that these big tech companies to streamers will be there Thursday night. Yankee games for the past couple of seasons have been on there, and you know the old Yankee fans up in the Bronx, they're calling up sports talk radio saying, how do I get the game tonight?

Yes?

Yes?

I mean, and also I believe I may have this wrong, but Netflix Christmas Day football seventy five million I think per game.

I mean, and also I believe I may have this wrong, but Netflix Christmas Day football seventy five million I think per game.

I think.

I think.

So that's almost more than Taylor Swift Banks exactly.

So that's almost more than Taylor Swift Banks exactly.

Yeah, that's because that's where that's where the viewership is going. The court cutting and all that. You don't get the bang for your buck with your broadcasting cable networks.

Yeah, that's because that's where that's where the viewership is going. The court cutting and all that. You don't get the bang for your buck with your broadcasting cable networks.

Next crazy, So Jeff bass is Blue Argent flight over the weekend flew. But you know you always get those like side stories out from each flight. So this one I thought was interesting off of it went off Sunday Ed Dwight. He was America's first bla black astronaut candidate. On Sunday he finally rocketed into space. Sixty years later, the age of ninety. He was on that flight. So the backstory is he was an Air Force pilot when President John F. Kennedy kind of pushed him to be a candidate for NASA's early Astronaut Corps, but he wasn't picked for that nineteen sixty three class. NASA actually didn't select black astronauts until nineteen seventy eight. So he went on this flight. He called it a life changing experience. Now he is actually a record holder the oldest person in space by two months from William Chattner, Wieve Shatner, Captain Kirky. He is two months older than William Shatner when he went back in twenty twenty one. So I love those like side stories from the launches that he that, Yeah, very very interesting.

Next crazy, So Jeff bass is Blue Argent flight over the weekend flew. But you know you always get those like side stories out from each flight. So this one I thought was interesting off of it went off Sunday Ed Dwight. He was America's first bla black astronaut candidate. On Sunday he finally rocketed into space. Sixty years later, the age of ninety. He was on that flight. So the backstory is he was an Air Force pilot when President John F. Kennedy kind of pushed him to be a candidate for NASA's early Astronaut Corps, but he wasn't picked for that nineteen sixty three class. NASA actually didn't select black astronauts until nineteen seventy eight. So he went on this flight. He called it a life changing experience. Now he is actually a record holder the oldest person in space by two months from William Chattner, Wieve Shatner, Captain Kirky. He is two months older than William Shatner when he went back in twenty twenty one. So I love those like side stories from the launches that he that, Yeah, very very interesting.

I like that one.

I like that one.

Sure, people working from home, so they're starting to take advantage of shopping online. You know, the boss isn't looking over your shoulder. You can kind of get a couple things done. So the research says the pandemic, you know, sparked the rise in online shopping, but it's continued. Last year, we spent three hundred and seventy five billion dollars more than we would have otherwise. So how do they know it's coming from hybrid workers, Well, they said areas where work from home jobs are more popular. That's where the shopping went up, and then areas where people are kind of back going to the office. That's where the levels were down.

Sure, people working from home, so they're starting to take advantage of shopping online. You know, the boss isn't looking over your shoulder. You can kind of get a couple things done. So the research says the pandemic, you know, sparked the rise in online shopping, but it's continued. Last year, we spent three hundred and seventy five billion dollars more than we would have otherwise. So how do they know it's coming from hybrid workers, Well, they said areas where work from home jobs are more popular. That's where the shopping went up, and then areas where people are kind of back going to the office. That's where the levels were down.

People going back to the office. Where are these errands?

People going back to the office. Where are these errands?

Nick Bloom? Somebody had Oh, Diane Swank had this one this weekend. She does great work. Diane Swank follow her on LinkedIn and Twitter had Nick Bloom of Stanford, which says traditional firms they're coming back in the newer formation. Firms are embedded with work from home. Okay, that was the basic thrust to what Diane Swank. Yep, it was alluding to. I have careful, I have to be careful. What we are is I have the surveillance cork in my mouth because I'm very opinionated on this and nobody wants to hear it. But so we're working from home ordering on Amazon.

Nick Bloom? Somebody had Oh, Diane Swank had this one this weekend. She does great work. Diane Swank follow her on LinkedIn and Twitter had Nick Bloom of Stanford, which says traditional firms they're coming back in the newer formation. Firms are embedded with work from home. Okay, that was the basic thrust to what Diane Swank. Yep, it was alluding to. I have careful, I have to be careful. What we are is I have the surveillance cork in my mouth because I'm very opinionated on this and nobody wants to hear it. But so we're working from home ordering on Amazon.

Yes, that's the thing.

Yes, that's the thing.

And that's the thing. There's the people who work from home. They spoke to the Wall Street Journal. They're saying that they do it because they're not in the people in the office get the coffee break, they get to chitty chat with other people. They don't have that, so this is their relief.

And that's the thing. There's the people who work from home. They spoke to the Wall Street Journal. They're saying that they do it because they're not in the people in the office get the coffee break, they get to chitty chat with other people. They don't have that, so this is their relief.

On the chat. This is critical. The chitty chat is part of the fabric culture of corporate interplay. I would say, can you get to the marginal, great idea or even good idea without the chitty chat? I don't think you can. Let's do zoom with our institutional salesforce. No get Jamie Diamond said this in the annual letter Get on the plane and go yep.

On the chat. This is critical. The chitty chat is part of the fabric culture of corporate interplay. I would say, can you get to the marginal, great idea or even good idea without the chitty chat? I don't think you can. Let's do zoom with our institutional salesforce. No get Jamie Diamond said this in the annual letter Get on the plane and go yep.

I don't you know I've thrown into towel. You know, Well, so let the new generation do their things on.

I don't you know I've thrown into towel. You know, Well, so let the new generation do their things on.

Live chat on this, get out on YouTube and tell us what you think from work from home. The middle child has told me it's a complete scam. She's lined up and you know the people are working from nine to eleven forty two, and that they do. They do like six hours of work in an hour and a half. No one's policing them, right, I mean, that's just what the middle child says. You're gonna save us here. You got something next before I get the hook?

Live chat on this, get out on YouTube and tell us what you think from work from home. The middle child has told me it's a complete scam. She's lined up and you know the people are working from nine to eleven forty two, and that they do. They do like six hours of work in an hour and a half. No one's policing them, right, I mean, that's just what the middle child says. You're gonna save us here. You got something next before I get the hook?

Last one, No, last one?

Last one, No, last one?

Okay.

Okay.

So you've seen them, like the different flavor combinations like Peeps flavored Pepsi and pink lemonade flavored kit Cats, like all these wild off the wall things. Well, yes, their social media sense, but experts are saying there is a little more thinking behind it. So the Wall Street Journal spoke with food companies marketers. They said that the taste palette of the consumer is changing. You know, they want more, They want a little bit of sour and sweet. Our patch kids, Oreos, patch Kids, Oreos. I'm telling you, they want the best of both in one. Gen Z is also fueling that because they're a little bit more adventurous. They're on social media looking at these new flavor trends. But they're saying it helps the brands, right, So it helps bring in new customers and helps Joe that they're fun and edgy. But it also helps nudge buyers to buy the original and the new flavor so they can test out which both. So now the customer is buying more. They're buying the original and the fancy new flavor.

So you've seen them, like the different flavor combinations like Peeps flavored Pepsi and pink lemonade flavored kit Cats, like all these wild off the wall things. Well, yes, their social media sense, but experts are saying there is a little more thinking behind it. So the Wall Street Journal spoke with food companies marketers. They said that the taste palette of the consumer is changing. You know, they want more, They want a little bit of sour and sweet. Our patch kids, Oreos, patch Kids, Oreos. I'm telling you, they want the best of both in one. Gen Z is also fueling that because they're a little bit more adventurous. They're on social media looking at these new flavor trends. But they're saying it helps the brands, right, So it helps bring in new customers and helps Joe that they're fun and edgy. But it also helps nudge buyers to buy the original and the new flavor so they can test out which both. So now the customer is buying more. They're buying the original and the fancy new flavor.

Oddball parents aren't entirely new in the food and beverage industry. Hubba Bubba released a bubble gum flavored soda in the late nineteen eighties.

Oddball parents aren't entirely new in the food and beverage industry. Hubba Bubba released a bubble gum flavored soda in the late nineteen eighties.

For example, I just.

For example, I just.

Just why I talked to Mandolies this week and they called me up. They said, thanks for the efforts on Tang zero. There's Tang and there's tang zero. There's no hubba bubba hubble bubba tangs.

Just why I talked to Mandolies this week and they called me up. They said, thanks for the efforts on Tang zero. There's Tang and there's tang zero. There's no hubba bubba hubble bubba tangs.

This is just on the margin at the end of the consumer staples grow with you know, GDP. I don't care how you package it.

This is just on the margin at the end of the consumer staples grow with you know, GDP. I don't care how you package it.

How you doing. There's solid double digital.

How you doing. There's solid double digital.

But I do like that.

But I do like that.

I do like the smaller serving sodas like that. Yeah, because I can't. I'm not into the twelve hours anymore. So that thing works out perfectly for me. So whoever was thinking of that, good job, Lisa Mateo.

I do like the smaller serving sodas like that. Yeah, because I can't. I'm not into the twelve hours anymore. So that thing works out perfectly for me. So whoever was thinking of that, good job, Lisa Mateo.

Thank you so much the newspapers. This is the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.

Thank you so much the newspapers. This is the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.