# Trump's Iran Ultimatum Roils Markets

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 23 Mar 2026, 18 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/89ae64fd-58d9-4afe-84f3-b41600151533/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Stocks fell and oil whipsawed in a volatile start to trading, as the war in Iran entered a fourth week with no sign of de-escalation. Treasuries extended their selloff. Martin Schulz, Head of International Equity Group at Federated Hermes spoke to Bloomberg's Haidi Stroud-Watts and Annabelle Droulers on the Asia Trade. Plus - The Milken Institute's Global Investors' Symposium is taking place this week in Hong Kong, bringing together some of the world's most influental investors and business leaders in the Asia Pacific. Bloomberg's Minmin Low spoke to Perry Wong, Senior Fellow and Managing Director at the Milken Institute. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
[0:11] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Charlie Pellea. Doug
[0:14] Speaker 2: Chrisner's got the week off. Tensions in the Middle East
[0:17] Speaker 2: show no signs of easing, with President Trump issuing a
[0:21] Speaker 2: forty eight hour ultimatum to Iran to reopen the Strait
[0:24] Speaker 2: of Hormuz or face strikes on its power plants. Financial
[0:29] Speaker 2: markets got off to a volatile start, with Asian stock stumbling,
[0:32] Speaker 2: US equity index futures and crude oil getting whipsawed as
[0:36] Speaker 2: the war in Iran enters a fourth week with no
[0:40] Speaker 2: sign of de escalation. And that is where we begin
[0:43] Speaker 2: the conversation with Martin Schultz, the head of International Equity
[0:47] Speaker 2: Group at Federated Hermes. Shall spoke to Bloomberg TV hosts
[0:51] Speaker 2: Heidi Stroud Watts and Annabelle Droolers.
[0:54] Speaker 1: What do you make of the trading dynamic at the moment,
[0:56] Speaker 1: clearly with steal seeing reacting to headlines, is it less
[1:00] Speaker 1: of a reaction than you might expect?
[1:02] Speaker 3: There?
[1:04] Speaker 4: Good morning, he thank you so much for having me. Yeah,
[1:07] Speaker 4: I think you know, I think the markets are definitely
[1:09] Speaker 4: getting more nervous about what's going on in the Middle
[1:12] Speaker 4: East right now. But our view is that it's a
[1:15] Speaker 4: time for caution, not panic, particularly it relates to, for example,
[1:19] Speaker 4: our prison committees at Federated Hermes. We're looking at obviously
[1:23] Speaker 4: a lot of other factors out there, private credit, AIA disruption,
[1:27] Speaker 4: renewed tariff uncertain the inflation, and this is obviously just
[1:30] Speaker 4: another break in the wall of warrior, so to speak.
[1:33] Speaker 4: So from that perspective, we do think the volatility matches
[1:37] Speaker 4: historical geopolitical events in the last thirty or forty years.
[1:41] Speaker 4: You know, time will tell. Obviously, duration is the main issue.
[1:45] Speaker 4: The longer this drags out, obviously worse it gets, And
[1:49] Speaker 4: it's all about the price of oil and the supply
[1:52] Speaker 4: chain and how that all plays out.
[1:54] Speaker 1: There's so little visibility, as you point out, and we've
[1:57] Speaker 1: now got this ultimatum by President Trump. We know what
[2:00] Speaker 1: the risk of reprisal is from Iran if this plays out,
[2:04] Speaker 1: you know, as a worst case scenario. So what do
[2:07] Speaker 1: you recommend investors do at this point?
[2:10] Speaker 4: Well, it's tough, right If you were long oil going
[2:13] Speaker 4: into this event, you're probably at some point in time'm
[2:16] Speaker 4: going to take some money off the table. If you've
[2:18] Speaker 4: been smart enough maybe on the margin to take some
[2:22] Speaker 4: risk off the table for economically sensitive sectors and that
[2:26] Speaker 4: sort of thing, and or you've gotten, you know, on
[2:29] Speaker 4: the margin out of Europe some of those regions that
[2:33] Speaker 4: are most affected. I'd say you should be at least
[2:36] Speaker 4: devising a long term, medium long term plan on which
[2:40] Speaker 4: stocks and regions you think will obviously because obviously, as
[2:44] Speaker 4: we see this volatility hit the markets, high quality companies
[2:47] Speaker 4: are being sold off, and we think it's an opportunity.
[2:50] Speaker 4: And so from that perspective, we do like Latin America.
[2:54] Speaker 4: We like actually consumer plays potentially again depending how long
[2:58] Speaker 4: this drags out. And we also believe it not like
[3:02] Speaker 4: Japan and South Korea for the mid long term, because
[3:04] Speaker 4: they do have some structural factors that will lead to
[3:08] Speaker 4: higher market activity in those regions.
[3:12] Speaker 5: Just on that point of what we're seeing with Japan,
[3:15] Speaker 5: because they've got trading starting to be a little bit
[3:17] Speaker 5: more fully reflected as we see all stocks coming online
[3:19] Speaker 5: this morning for the nick K two two five, but
[3:22] Speaker 5: so far a drop of around three percent Martin on
[3:25] Speaker 5: that index. I do also want to get your views
[3:27] Speaker 5: on career in particular because we just had the twenty
[3:30] Speaker 5: day trade data coming out and still showing a lot
[3:32] Speaker 5: of strength at the start of March, even against this
[3:35] Speaker 5: backdrop of the Iran war, that tech story still seems
[3:40] Speaker 5: to be intact, even against the backdrop of this risk
[3:43] Speaker 5: of an increase in inflationary pressure. How long do you
[3:46] Speaker 5: think that stays the case.
[3:49] Speaker 4: Well, that's a great question. I think you're highlighting some
[3:53] Speaker 4: really important data. We were going into this to your
[3:57] Speaker 4: political event, if you will, fairly in a stronger situation, right,
[4:01] Speaker 4: you know, inflation has been coming down the last few years.
[4:04] Speaker 4: The labor market was already somewhat weak, but at the
[4:06] Speaker 4: end of the day, global economic activities actually starting to
[4:09] Speaker 4: ramp up. You've got the big beautiful bill in the US,
[4:12] Speaker 4: you have some pump priming fiscally in places like Japan
[4:16] Speaker 4: and in China that we're helping things. And so you know,
[4:20] Speaker 4: this AI story that particularly that Korea is a big
[4:24] Speaker 4: part of, we think is going to continue. But to
[4:27] Speaker 4: your point, you know, again, I think if you look
[4:30] Speaker 4: back at the Rock War early nineties all through the
[4:34] Speaker 4: more recent past, generally speaking, it's that four to six
[4:39] Speaker 4: week period when you're going to hit the heightened area
[4:42] Speaker 4: of uncertainty, and that's kind of what we're in and
[4:45] Speaker 4: entering right now. And so yeah to question, yeah, it's
[4:50] Speaker 4: right duration. You know, if this, if this is another
[4:53] Speaker 4: if this, if the oil price stays above ninety, that's
[4:56] Speaker 4: going to be deleterious economic activities, is going to be
[4:59] Speaker 4: demand to strug. We don't think we're there yet. As
[5:02] Speaker 4: you mentioned earlier, Goldman Saxis increased its oil price. Oil
[5:06] Speaker 4: was actually going into this a deflationary force into the
[5:09] Speaker 4: economic realm, and now it's going to potentially be a headwind.
[5:14] Speaker 4: And so yes, if we're still talking about this three
[5:17] Speaker 4: to four weeks from now and oil is above ninety
[5:20] Speaker 4: or even over one hundred, then I'd say we definitely would.
[5:23] Speaker 4: I think the markets will then have to readjust accordingly.
[5:28] Speaker 6: Yeah.
[5:28] Speaker 5: I found the point you were making around historical precedent
[5:31] Speaker 5: really interesting and saying that week four could be sort
[5:34] Speaker 5: of a peak period of uncertainty if you go back
[5:36] Speaker 5: to conflicts all the way back into the late nineties.
[5:39] Speaker 5: But do you take this then as a buying opportunity
[5:43] Speaker 5: if you're saying that.
[5:44] Speaker 6: This is actually.
[5:46] Speaker 5: The factors that were already in play ahead of the
[5:49] Speaker 5: IRUN conflict could actually be the same factors exiting out
[5:53] Speaker 5: of it as well.
[5:54] Speaker 4: Yeah, No, timing is always a difficult you know, as
[5:58] Speaker 4: they say, when there's blood in the streets, should be buying.
[6:01] Speaker 4: I'd say we're closer to and then if you will
[6:04] Speaker 4: do this uncertainty, higher volatility and higher O prices, but
[6:07] Speaker 4: obviously events on the ground. You know, this is what
[6:10] Speaker 4: makes forecasting in this arena so difficult, because the news
[6:14] Speaker 4: cycle is so quick and obviously it effects market sentiments
[6:18] Speaker 4: so quickly as well. But we do think on the margin.
[6:21] Speaker 4: We started to dip our toe in on Friday here
[6:23] Speaker 4: and there because we do think you Friday was kind
[6:25] Speaker 4: of a unique because quadruple Witching Hour and a lot
[6:29] Speaker 4: of other factors in play. But we do think that
[6:32] Speaker 4: near term volatility will remain high. But in the next
[6:35] Speaker 4: week or so, if if you've got some high quality
[6:39] Speaker 4: stocks even following that you like, particular those in Latin
[6:42] Speaker 4: America in the consumption space and healthcare, there probably stocks
[6:45] Speaker 4: you should be at least dipping your toe and buying
[6:47] Speaker 4: at this point.
[6:48] Speaker 2: Martin Schulz, the head of International Equity Group at Federated Armies,
[6:52] Speaker 2: speaking to Bloomberg TV hosts Heidi stround Watts and Annabel Drulers,
[6:58] Speaker 2: Coming up next, we'll be going to Hong Kong where
[7:01] Speaker 2: the Milkan Institute's Global Investors Symposium is kicking off this week.
[7:14] Speaker 2: Welcome back to the Daybreak Asia podcast. I'm Charlie Pellett.
[7:18] Speaker 2: Doug Prisoner's got the week off. We go to Hong
[7:20] Speaker 2: Kong next and the Milkin Institute's Global Investors Symposium is
[7:25] Speaker 2: taking place this week, bringing together some of the world's
[7:28] Speaker 2: most influential investors and business leaders in the Asia Pacific.
[7:33] Speaker 2: And it was there that we had the chance to
[7:34] Speaker 2: catch up with Perry Wang, Senior Fellow and Managing Director
[7:38] Speaker 2: at the Milkin Institute. Wang spoke to Bloomberg's menmn.
[7:43] Speaker 7: Low Perry, great to have you here with us here. Yes, sir,
[7:47] Speaker 7: we have seen a lot of lack of volatility, no
[7:49] Speaker 7: signs of the escalation in the Iran War. There are
[7:52] Speaker 7: no fears of inflation and a global economics flowed out.
[7:55] Speaker 7: One of the implications on China's growth given it so reliabent.
[7:58] Speaker 3: Exports as well, say China as one of the larger economy,
[8:03] Speaker 3: not just China but all economies, but the larger one
[8:06] Speaker 3: depends on energy tremendously. So with the up and down
[8:11] Speaker 3: the market coupled with uncertainty. I think up and down
[8:15] Speaker 3: yourself is not a big issue, but the unanswered questions
[8:20] Speaker 3: on how this ends and when this will end, I
[8:23] Speaker 3: think would affect the market continuously. I think let's let's
[8:27] Speaker 3: just play it out as say, if we solve the
[8:30] Speaker 3: problem today, so we'll see more seas to exist and
[8:35] Speaker 3: people start to talk. Even if we enter that on
[8:39] Speaker 3: that stage, the market will still kind of watch. The
[8:43] Speaker 3: perceived risk sometimes is affect the economy even more, can
[8:49] Speaker 3: be more than the actual risk. I think because people
[8:53] Speaker 3: just don't know. Business operator cannot run on say you know,
[8:57] Speaker 3: unpredictable future because that where departmer capital. That becomes a
[9:02] Speaker 3: huge question.
[9:04] Speaker 7: So given the current scenario, where do you think realistically
[9:07] Speaker 7: China's growth will fall this year between the four and
[9:09] Speaker 7: a half to five percent.
[9:10] Speaker 3: Well, I say that the new target reflects on a
[9:14] Speaker 3: couple of realities. If you will, that either some Chinese
[9:20] Speaker 3: government can manage and control or contain, but others China cannot.
[9:26] Speaker 3: Just like business flow, no one country can say I
[9:30] Speaker 3: dictate the growth ware or dictate the flower capital. So
[9:33] Speaker 3: in that the Chinese government and a common day for
[9:36] Speaker 3: the external risks and also look at some of the
[9:40] Speaker 3: structural reform that the Chinese government, I think the fifteen
[9:46] Speaker 3: five years Plan, they laid it out, so they go accordingly,
[9:50] Speaker 3: so internally, externally they try to take a balance. And
[9:54] Speaker 3: if you look back in the Chinese government's planning, this
[9:59] Speaker 3: is one.
[10:00] Speaker 6: Of the five year plan that could be more balanced
[10:06] Speaker 6: with some focus, but anticipating risks.
[10:10] Speaker 3: That beyond their control. So it's a fun plan to read.
[10:16] Speaker 3: So they put a zone at four point five to five.
[10:21] Speaker 3: With the four point five it says, right, even if
[10:25] Speaker 3: the economy grow at five four point five percent by
[10:29] Speaker 3: say twenty thirty twenty thirty five, you know, some would
[10:33] Speaker 3: take the extra five years that the growth target would
[10:38] Speaker 3: pretty much go with their own planning and their targets.
[10:41] Speaker 6: So they could give this.
[10:43] Speaker 3: This lower band and higher band to just reflect upon
[10:47] Speaker 3: uncertain pots.
[10:48] Speaker 7: So some economists believe that China's PPI, which has been
[10:51] Speaker 7: in inflation for three and a half years now, I
[10:53] Speaker 7: believe something can flip too positive even as soon as
[10:57] Speaker 7: this month, given the energy shocks. If you think that that's.
[11:00] Speaker 3: Possible, that's possible. I think the question is it's a possibility.
[11:08] Speaker 3: But if you look at China's growth planning. They would
[11:14] Speaker 3: rather go for quality growth than quantity growth, and that
[11:20] Speaker 3: is not a slogan because they do have to address
[11:24] Speaker 3: on several of the fundamental issues that have been if
[11:28] Speaker 3: you will dragging the growth behind or below expectation, not
[11:34] Speaker 3: just the nations leader's expectation, but the business person and
[11:40] Speaker 3: you know, broadly speaking people, so they would expect the
[11:44] Speaker 3: economy would do better and hope that the economy will
[11:47] Speaker 3: do better with that. In rime, we cannot expect if
[11:51] Speaker 3: the economy growth substantially beyond I say, all of a sudden,
[11:56] Speaker 3: the contraction will turn hugely positive. I think if run
[12:00] Speaker 3: of balance, say their pocket is two percent underpricing increase,
[12:05] Speaker 3: which would be more in lind On most of the
[12:09] Speaker 3: major economies around the world. So everyone talking at two percent,
[12:14] Speaker 3: but it's sometimes it's not that easy.
[12:16] Speaker 7: How much concern is there that the energy inflation is
[12:19] Speaker 7: going to lead to a negative feedback loop on consumption
[12:22] Speaker 7: because it's it's not necessarily demand driven, it's cost driven, right,
[12:25] Speaker 7: and it could squeeze on corporate profits.
[12:27] Speaker 3: Agatting can actually it can get out of control. And
[12:31] Speaker 3: I think so far if you look at this is
[12:34] Speaker 3: a funny thing. If you look at the Chinese government,
[12:36] Speaker 3: they have been trying to build up their oil reserve.
[12:39] Speaker 3: I think in anphicipation of say, you know, not necessary war,
[12:44] Speaker 3: but just say trade friction to some economies in some countries,
[12:49] Speaker 3: so they would try to protect their supply. It's the
[12:53] Speaker 3: energy and put stuff that the Chinese government have take
[12:57] Speaker 3: a three to five years planning looking back. So now
[13:01] Speaker 3: the reserve is pretty high. So I think if you
[13:06] Speaker 3: go by some energy specialistic forecast, it's about the Chinese
[13:12] Speaker 3: economy can take perhaps sixteen months or so, maybe even longer,
[13:17] Speaker 3: you know, given the energy crisis you know coming, they
[13:21] Speaker 3: can actually sustain their domestic productions.
[13:24] Speaker 6: How big are a hit?
[13:25] Speaker 7: Do you think China's exports will be effective?
[13:30] Speaker 3: It will be a big hit, but how much it's
[13:32] Speaker 3: hard to tell because if you look at China's export,
[13:36] Speaker 3: a huge product what I would call stable products, meaning
[13:41] Speaker 3: people have to replace non durable consumption items. They are
[13:46] Speaker 3: not say two dollars items, perhaps they are five dollars items,
[13:52] Speaker 3: ten dollar items, and those I don't think would be
[13:55] Speaker 3: affected so much. Now the production costs is high, but
[14:00] Speaker 3: then the problem market is really so thin and they
[14:03] Speaker 3: have the supply chains. Some of them moved to other
[14:07] Speaker 3: countries in Asia and some of them in Africa. Even so,
[14:11] Speaker 3: the cost is not necessarily burden totally on the Chinese economy.
[14:17] Speaker 3: So if you take the other side of it, say
[14:20] Speaker 3: the higher end products such as eed and that takes
[14:24] Speaker 3: a lot to produce, but then the market is opening
[14:27] Speaker 3: up to the Chinese producers, say Australia, Canada. Even so
[14:33] Speaker 3: you have new markets and Europe now that I think
[14:37] Speaker 3: would help the Chinese export Still, so if you look
[14:41] Speaker 3: at the up and downside and upside, I would say
[14:45] Speaker 3: the risk is there, it would hurt the production and export,
[14:49] Speaker 3: but then at least it's not going to be so detrimental.
[14:53] Speaker 7: Not only and last week was a big central bank
[14:55] Speaker 7: week week we have most central banks holding rates. Does
[14:59] Speaker 7: it change your forecasts of the scale and pace of
[15:02] Speaker 7: recouds from the PBOC?
[15:04] Speaker 3: Not necessary, because I think there are factors in the
[15:08] Speaker 3: Chinese government have to pay attention to. It's not just external,
[15:13] Speaker 3: they internal. They want to engage in some reform, which
[15:17] Speaker 3: is a big promise because they know that they have
[15:21] Speaker 3: to dig deep, okay into some of the root course
[15:26] Speaker 3: of some of the problems that put the Chinese economy
[15:30] Speaker 3: such as property sector and also such as what they
[15:33] Speaker 3: call nature. Okay, so the ultra competitive operation in China,
[15:38] Speaker 3: no one makes up of it. They want to clem
[15:40] Speaker 3: down on that. So all those that can go back
[15:43] Speaker 3: to you, okay, how do you look at your INTERESTIP,
[15:45] Speaker 3: what's your placing targets? And those I think the Chinese
[15:49] Speaker 3: try to lay them into what they call the social
[15:53] Speaker 3: capital for formation, not just investment funds. Right, and also
[15:58] Speaker 3: look at the act we see from different regions. You
[16:03] Speaker 3: have regions such as Guangkong, Xangsu, those are two leading
[16:07] Speaker 3: one or says you only add one more. They actually
[16:12] Speaker 3: the economy those regional economies are doing well, but if
[16:16] Speaker 3: you go to others now they may not. So they
[16:19] Speaker 3: have to take a pretty much a strike the balance.
[16:22] Speaker 3: So that's not easy to do, but they at least
[16:25] Speaker 3: have that in mind to try to make the market
[16:30] Speaker 3: really more responsive to the fiscal condition of the country.
[16:34] Speaker 3: Tax we see taxing mechanism reform. Those actually would bore
[16:40] Speaker 3: into a one basket. So it's not as simple.
[16:44] Speaker 2: Perry Wong, Senior Fellow and Managing Director at the Milkin Institute,
[16:48] Speaker 2: speaking of Bloomberg's midmen Low at the Milkin Institute's Global
[16:52] Speaker 2: Investors Symposium in Hong Kong, and we are bringing the
[16:56] Speaker 2: conversation to you here on the Daybreak Asia. Thanks for
[17:03] Speaker 2: listening to today's episode of the Bloomberg Daybreak Asia Edition podcast.
[17:08] Speaker 2: Each weekday, we look at the story shaping markets, finance,
[17:12] Speaker 2: and geopolitics in the Asia Pacific. You can find us
[17:15] Speaker 2: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere
[17:19] Speaker 2: else you listen. Join us again tomorrow for insight on
[17:22] Speaker 2: the market moves from Hong Kong to Singapore and Australia.
[17:27] Speaker 2: I'm Doug Prisner, and this is Bloomberg

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