# Markets Outlook Amid Continued US Strikes on Iran, China Eco Data

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 15 Jul 2026, 22 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/d15040f4-3346-4eb8-be03-b4880014f9b0/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Oil rose for a third day as President Donald Trump threatened further strikes on Iran, hours after the US resumed its blockade on the Islamic Republic’s shipping through the Strait of Hormuz. Global benchmark Brent advanced 1.8% to above $86 a barrel after surging 11% in the previous two sessions. The weak US inflation numbers and a strong start to the earnings season have revived the AI trade, boosting technology stocks after a recent bout of volatility. While the data gives the Fed more room to keep rates on hold, escalating tensions in the Middle East continue to cloud the inflation outlook by threatening higher energy prices. We spoke to Paisley Nardini, Portfolio Manager at Simplify Asset Management. For a preview of the incoming economic data out of China, Bloomberg TV Host Avril Hong talked to Peiqian Liu, Asia Economist at Fidelity International. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:10] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Prisner. Crude
[0:14] Speaker 2: oil prices are trading higher at this hour. This is
[0:16] Speaker 2: after the US military launched an additional round of strikes
[0:20] Speaker 2: against Iran, while at the same time resuming a naval
[0:23] Speaker 2: blockade of Iranian ports and coast elsewhere. Today, we had
[0:27] Speaker 2: FED share Kevin Warsh telling House lawmakers the FED has
[0:31] Speaker 2: no tolerance for high inflation, and he at the same
[0:34] Speaker 2: time downplayed that CPI report for the month of June,
[0:37] Speaker 2: saying the inflation mission is not yet accomplished. If you're
[0:41] Speaker 2: wondering about the inflation story overall, CPI cooled last month
[0:46] Speaker 2: for the first time in six years. This is the
[0:48] Speaker 2: headline reading up at an annual rate of three and
[0:50] Speaker 2: a half percent, But that's down from what we had
[0:52] Speaker 2: in May of four point two percent, and that is
[0:55] Speaker 2: obviously a reflection of lower fuel prices, especially gas. So
[1:00] Speaker 2: the CPI print helped relieve a bit of anxiety over
[1:04] Speaker 2: whether the FED would be inclined to raise rates in
[1:06] Speaker 2: the near term. Stocks moving higher, especially the chip makers.
[1:10] Speaker 2: We had the Philadelphia Semiconductor Index up today by two
[1:13] Speaker 2: and a half percent for a look at some of
[1:15] Speaker 2: this price section. I'm joined by Paisley Nardini of Simplify
[1:20] Speaker 2: Asset Management. Paisley, thank you so much. How do you
[1:23] Speaker 2: understand the risks right now in markets? And let's just
[1:28] Speaker 2: talk beyond equities, maybe we can move into the fixed
[1:32] Speaker 2: income space as well.
[1:34] Speaker 3: Yeah, well, today's inflation print.
[1:36] Speaker 1: I'm kind of surprised to hear some of the comments today,
[1:38] Speaker 1: as you mentioned Warsh making a comment that.
[1:43] Speaker 3: This doesn't mean we're out of the woods. I mean,
[1:44] Speaker 3: this is a huge.
[1:47] Speaker 1: Tailwind I think for his objective, which is this dual mandate,
[1:50] Speaker 1: and this really helps give him a more balanced approach
[1:54] Speaker 1: to what he needs to accomplish in the next couple months.
[1:57] Speaker 3: I think it removes a key.
[1:58] Speaker 1: Point of stress, and the markets have priced that in
[2:01] Speaker 1: as you mentioned, with just rate hike expectations, declining rates
[2:05] Speaker 1: rallying a bit as well. So as it relates to
[2:07] Speaker 1: fixed income, we've really seen of the last you know,
[2:12] Speaker 1: probably a couple of years at this point, but definitely
[2:14] Speaker 1: over the last year or so, with heightened inflation expectations,
[2:17] Speaker 1: especially earlier this year, with oil investors kind of throwing
[2:20] Speaker 1: in the towel around the fixed income, the traditional core
[2:23] Speaker 1: bond trade, and that's where.
[2:25] Speaker 3: I think a bit of a risk lies.
[2:27] Speaker 1: We've seen a little bit repricing today, but not nearly
[2:29] Speaker 1: to levels that would warrant kind of piling in on
[2:32] Speaker 1: the interest rate risk or duration trade. But if we
[2:35] Speaker 1: start to see at least we get more validation that
[2:39] Speaker 1: you may was maybe peak for current inflation behind us
[2:44] Speaker 1: and any cracks within the employment data that are coming
[2:47] Speaker 1: out in the next couple of days, that could definitely
[2:50] Speaker 1: continue to pressure yields lower. And I think markets broadly
[2:54] Speaker 1: over the last couple of years have been trading more
[2:56] Speaker 1: on technicals than fundamentals. So if we start to see
[2:59] Speaker 1: a bit of a inertia or momentum and investors piling
[3:02] Speaker 1: back into duration, I think that could be a catalyst
[3:05] Speaker 1: as well.
[3:05] Speaker 3: So that's something I think a lot of investors.
[3:07] Speaker 1: Maybe aren't paying as much attention to, and core bonds
[3:10] Speaker 1: just where we are on the cycle, Like I said,
[3:12] Speaker 1: maybe aren't front and center just given all the exciting
[3:16] Speaker 1: semiconductor technology opportunities for portfolios.
[3:19] Speaker 3: But it's not time to completely throw in the towel
[3:22] Speaker 3: on bonds.
[3:22] Speaker 2: I would say in the month of June, gasoline prices
[3:25] Speaker 2: were down nearly ten percent, something greater than nine percent.
[3:29] Speaker 2: We have seen obviously a lot of turbulence in the
[3:31] Speaker 2: oil markets. It's not clear yet where this is going
[3:34] Speaker 2: to go, but if we can say maybe fairly that
[3:38] Speaker 2: we're not going to retest the highs that we had
[3:40] Speaker 2: at the near the onset of the war with Iran.
[3:43] Speaker 2: You mentioned the chip story in there, and I'm wondering
[3:46] Speaker 2: whether or not maybe what's been happening in the semiconductor space,
[3:49] Speaker 2: particularly as it relates to memory, will kind of replace
[3:55] Speaker 2: energy as being the driving factor behind this persistently. Maybe
[3:59] Speaker 2: not higher inflation, but certainly sticky inflation.
[4:03] Speaker 4: Yeah.
[4:03] Speaker 1: I think this also kind of ties back to some
[4:05] Speaker 1: of the comments with Warsh coming into.
[4:08] Speaker 3: The HELM is that his views or that inflation is or.
[4:12] Speaker 1: Sees me the technology and AI is deflationary over time.
[4:18] Speaker 3: I think many of us can agree with that.
[4:19] Speaker 1: Perhaps with that time horizon is where I think a
[4:22] Speaker 1: lot of people may deviate, myself included. I do think
[4:25] Speaker 1: inflation is absolutely ex sees me technology is inflationary in
[4:28] Speaker 1: the near term, and we are seeing the implications of
[4:32] Speaker 1: that on the markets today. We've seen that obviously trickle
[4:35] Speaker 1: through and just the input costs, which is why we've
[4:38] Speaker 1: seen this kind of shift from more of the hyperscalers
[4:41] Speaker 1: to more of the chip makers over the last couple months.
[4:45] Speaker 1: That volatility and that shifting of the guard I would
[4:48] Speaker 1: say of who's leading the race for AI from a
[4:51] Speaker 1: return perspective, especially within technology, is I think what's leaving
[4:55] Speaker 1: a lot of investors confused. How do you play the
[4:58] Speaker 1: technology trade? How do you take advance of this really
[5:01] Speaker 1: once in a lifetime generational type innovation and technology that's
[5:05] Speaker 1: driving productivity, that's allowing us to increase our bottom lines
[5:09] Speaker 1: for a lot of these companies at their profit margins,
[5:12] Speaker 1: how do you play that trade? And just given the
[5:14] Speaker 1: last couple months, the noise and the volatility across sectors
[5:18] Speaker 1: and individual names, is why I think looking at more
[5:22] Speaker 1: of a balanced or prudent approach to this and say,
[5:25] Speaker 1: like an equal weight approach of technology can be advantageous.
[5:29] Speaker 1: So yes, inflationary definitely in the short term. And then
[5:33] Speaker 1: also the demand story, right where are we overbuilding? Are
[5:37] Speaker 1: we over promising? And that really kind of bleeds into
[5:40] Speaker 1: the fundamentals. A lot of these earnings reports that are
[5:42] Speaker 1: coming out really priced for perfection at the stock level,
[5:47] Speaker 1: and so in order to maintain these loftier valuations. I'm
[5:52] Speaker 1: not saying these companies are overvalue. The fundamentals thus far
[5:55] Speaker 1: have been strong. But to maintain these type of price levels,
[6:00] Speaker 1: you really need to over deliver, and you can only
[6:03] Speaker 1: do that for so long. It's not sustainable quarter after
[6:05] Speaker 1: quarter to deliver these kind of record beating type reports
[6:09] Speaker 1: and leading guidance higher. So I think that's where the
[6:13] Speaker 1: markets are a bit on shaky ground and why really
[6:16] Speaker 1: here at Simplify, we are always focused on how do
[6:18] Speaker 1: you diversify some of those risks, So, whether it's an
[6:21] Speaker 1: equal weighted approach, whether it's introducing additional sources of risk
[6:25] Speaker 1: to the portfolio liquid alts, I mean, with the inflationary
[6:29] Speaker 1: concerns that still exist even with today's cooling print for inflation,
[6:34] Speaker 1: having hard assets and commodities in a portfolio can be
[6:38] Speaker 1: a really convenient trade.
[6:39] Speaker 3: I guess at the stage of the cycle.
[6:41] Speaker 2: What about being exposed to markets offshore right now, particularly
[6:44] Speaker 2: in Asia, is that something that you would be inclined
[6:48] Speaker 2: to maybe play around with or is there a risk
[6:51] Speaker 2: there that you just aren't willing to take on.
[6:54] Speaker 1: Yeah, the way I look at the kind of the
[6:56] Speaker 1: non US trade anyway, for US investors is kind of twofold.
[7:01] Speaker 3: The bigger lever driver of returns.
[7:04] Speaker 1: Is obviously currencies, and so with the strength that we've
[7:07] Speaker 1: seen over the last couple months in the US dollar,
[7:11] Speaker 1: that continues to place pressure on non US equity assets.
[7:15] Speaker 1: So until when we see reversal from that perspective, which
[7:19] Speaker 1: could happen if we start to see again inflation cooling,
[7:22] Speaker 1: further cracks and employment the Fed starts to even talk
[7:24] Speaker 1: about easing back on the table, that could pressure the
[7:27] Speaker 1: dollar lower, which could help put a bit on international assets.
[7:31] Speaker 1: I would say the more near term way to think
[7:33] Speaker 1: about opportunities abroad is just thinking about more of like
[7:37] Speaker 1: the sector play, right, So there's certain really innovative companies
[7:41] Speaker 1: that exist and we've seen obviously volatility and exceptional returns
[7:46] Speaker 1: this year, and more of like South Korean equities, which
[7:48] Speaker 1: is a really concentrated play on a specific part of
[7:52] Speaker 1: the market, which is those chip makers. So opportunities I
[7:55] Speaker 1: would say across sectors for diversification beyond US names, but
[8:00] Speaker 1: really as it relates to technology in the AI trade,
[8:03] Speaker 1: especially with companies like Skhinex coming to market in an
[8:07] Speaker 1: ADR format in the US market in the last week here.
[8:11] Speaker 1: These are all really interrelated at the at the margin.
[8:14] Speaker 1: So are you really getting diversification when these companies are
[8:18] Speaker 1: global in nature and all kind of tied or tethered
[8:21] Speaker 1: to the same AI type trade.
[8:23] Speaker 2: So we're just getting the earning season underway. There have
[8:27] Speaker 2: been some positive results so far from a few of
[8:29] Speaker 2: the big banks. I'm thinking of JP, Morgan, Chase, goldmunt
[8:33] Speaker 2: Sacks today in particular, with a nine percent moved to
[8:36] Speaker 2: the upside. How do you think we're going too fair
[8:39] Speaker 2: in Q two in terms of overall performance?
[8:42] Speaker 1: Well, I think one of the key tailwinds to some
[8:45] Speaker 1: of these bank and trading related financials is the volatility
[8:50] Speaker 1: that we're talking about that we've seen in markets. This
[8:52] Speaker 1: volatility is exactly what drives trading revenues for these banks,
[8:56] Speaker 1: and so Goldman, as you mentioned, up nine percent today
[8:59] Speaker 1: on earnings. Provided we continue to see opportunities to trade
[9:04] Speaker 1: and make money within this more volatile market, I think
[9:08] Speaker 1: these companies will continue to see a bid. The other
[9:12] Speaker 1: theme that or I would say tailwind in the financial
[9:14] Speaker 1: sector broadly related to banks, is just thinking about the
[9:18] Speaker 1: slope of the curve. Typically banks do better when there's
[9:22] Speaker 1: a steeper yield curve. The money they make on lending
[9:27] Speaker 1: becomes more attractive versus what they're paying on their reserves
[9:30] Speaker 1: at the bank level. And so if we do start
[9:33] Speaker 1: to see the front end, as we did a little
[9:35] Speaker 1: bit today, start to reprice lower from a yield perspective,
[9:39] Speaker 1: that really steepens the curve, and so that provides a
[9:42] Speaker 1: more kind fortuitous backdrop for some of these financial and
[9:45] Speaker 1: bank related companies to continue beyond just the strength that
[9:49] Speaker 1: we've seen from a profitability perspective from trading revenue over
[9:52] Speaker 1: the last quarter or two. So I do think that
[9:54] Speaker 1: that's a sector that could continue to perform quite well.
[9:59] Speaker 1: And another way to think about, how do you diversify
[10:01] Speaker 1: given what we've seen from a macro risk perspective, by
[10:04] Speaker 1: trying to kind of remove yourself directly from the AI trade.
[10:09] Speaker 2: So you mentioned the rally that we had in the
[10:11] Speaker 2: short end of the treasury curve, yields coming down quite
[10:14] Speaker 2: a bit. I think the two year came in around
[10:17] Speaker 2: eight or nine basis points. And I'm curious how you're
[10:20] Speaker 2: feeling about FED policy right now between let's say now
[10:23] Speaker 2: in the end of the year, do we avoid a
[10:26] Speaker 2: quarter point right hike. Do you think is it going
[10:28] Speaker 2: to be kind of steady as she goes for a
[10:31] Speaker 2: while longer?
[10:33] Speaker 1: The markets have had a fun year, I would say
[10:36] Speaker 1: repricing rate expectations. It's been up, it's been down, it's
[10:39] Speaker 1: been up, and it's been back down again. What we
[10:43] Speaker 1: really try to focus on is kind of looking through
[10:45] Speaker 1: the noise. We all know that, you know, a rise
[10:48] Speaker 1: in oil prices will be you know, transitory from an
[10:51] Speaker 1: inflationary perspective. So I think the question of the last
[10:54] Speaker 1: quarter has been is it more than just oil? And
[10:57] Speaker 1: obviously oil was the key reason why we saw inflation
[11:02] Speaker 1: start to decline. With today's print, there are some small
[11:04] Speaker 1: pockets within inflation readings broadly that still show signs of
[11:09] Speaker 1: pressure to the upside. But I think for the most part,
[11:13] Speaker 1: we came into really the second quarter with inflation moving
[11:17] Speaker 1: in the right direction, and now it's kind of regaining
[11:19] Speaker 1: on that that path lower. So I do think that
[11:23] Speaker 1: as it relates to the it's still the hikes that
[11:28] Speaker 1: are still priced in for this year.
[11:30] Speaker 3: I have a feeling those will be taken off the table.
[11:33] Speaker 1: I think we might be closer to where we started
[11:35] Speaker 1: the year when we end this year, which is having
[11:38] Speaker 1: cuts back on the table. With that being said, because
[11:41] Speaker 1: we are kind of a global economy at this point,
[11:45] Speaker 1: with central bank hikes and other parts of the world
[11:48] Speaker 1: developed nations Japan, Europe, et cetera, that does place some
[11:52] Speaker 1: pressure on more you know, not to say the FED
[11:54] Speaker 1: is trying to be coordinated, but we we tend to
[11:58] Speaker 1: see these.
[11:58] Speaker 3: Themes in these trends persist cross border.
[12:01] Speaker 1: So I do wonder if when we get through the
[12:05] Speaker 1: summer of the ECB and the Bank of Japan, we'll
[12:08] Speaker 1: start to move back in line. But if I had
[12:11] Speaker 1: to flip a coin, I think the next six months
[12:16] Speaker 1: we'll see rates expectations moving lower than higher.
[12:19] Speaker 2: Okay, Paisley, thank you so very much. We'll leave it there,
[12:22] Speaker 2: Paisley Nardini of Simplify Asset Management joining us here on
[12:26] Speaker 2: the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.
[12:37] Speaker 2: I'm Doug Krisner. China's monthly activity data is expected to
[12:41] Speaker 2: show weakness as of midyear. We got some insight from
[12:45] Speaker 2: Pichian Lu, Asia economist from Fidelity International. Here. She is
[12:50] Speaker 2: speaking with Bloomberg's April Home.
[12:52] Speaker 5: So Peton we're expecting a bit of a slowing What
[12:54] Speaker 5: does that mean for the back half of the year.
[12:57] Speaker 4: Thanks for having me today, Avery, Yes, we're going to
[12:59] Speaker 4: se see China's qq GDP alongside the reactivity data today
[13:05] Speaker 4: and we do expect a slow down as we have
[13:07] Speaker 4: observed in data from April and May. Part of that
[13:11] Speaker 4: was hit by the Iran conflict and its subsequent shortages
[13:15] Speaker 4: of various input but as well, the domestic demand seems
[13:19] Speaker 4: to be softened a little bit on the back of
[13:22] Speaker 4: somewhat conservative fiscal stunts in the second quarter. So all
[13:26] Speaker 4: in all, I think we're probably going to expect some
[13:28] Speaker 4: softness in data. And the key really is where does
[13:32] Speaker 4: that trigger the reaction function from the policymakers.
[13:35] Speaker 5: Do you think there will be a reaction function. I
[13:37] Speaker 5: think a lot of economists or China observers have said,
[13:41] Speaker 5: you know, keep your expectations on stimulus low.
[13:44] Speaker 4: Yeah, I think there's a view on that, and you
[13:46] Speaker 4: do lean into that view of broad based stimulus because overall,
[13:50] Speaker 4: if you look at China's growth, even though we're expecting
[13:53] Speaker 4: slow down to somewhat a four point five percent anchor,
[13:56] Speaker 4: but remember we have lowered the GDP and growth expectations
[14:00] Speaker 4: for this year.
[14:01] Speaker 6: To pave way for a higher quality growth.
[14:04] Speaker 4: And looking at the shape of Chinese growth, it's currently
[14:07] Speaker 4: running under two speed. We know K shape growth is everywhere,
[14:11] Speaker 4: but K in China looks slightly different. It is a
[14:14] Speaker 4: representation of the characteristics of China's transition. We do see
[14:19] Speaker 4: the high speed growth in xpot sector yesterday, as well
[14:23] Speaker 4: as the tech manufacturing sector that's been running on a
[14:26] Speaker 4: higher speed, and that perhaps stops or kind of makes
[14:30] Speaker 4: the policymaker hesitant to roll out any form of broad stimulus.
[14:35] Speaker 4: But that doesn't mean China doesn't need help, because we
[14:38] Speaker 4: do have another side of the k or the lower
[14:40] Speaker 4: gear of the economy, which is under transition. And we
[14:43] Speaker 4: did see some slowdown, especially within the retail sales, which
[14:47] Speaker 4: we are expecting some weak number today again, which is
[14:50] Speaker 4: mainly driven by the slowdown of goods consumption as stimulus
[14:56] Speaker 4: has been subsided earlier this year. So with that in
[14:59] Speaker 4: mind and if there are slow down resurface again in
[15:02] Speaker 4: the retail sector, we do see more efforts coming in
[15:06] Speaker 4: to inject some sort of targeted stimulus to support the
[15:10] Speaker 4: weaker side of the economy.
[15:11] Speaker 5: There also seems to be some rumblings about the Consumption
[15:14] Speaker 5: Support Plan.
[15:15] Speaker 4: How much weight are you putting on something like that, Yeah, exactly.
[15:18] Speaker 4: We did hear some follow ups from five year plan.
[15:20] Speaker 4: In terms of implementation, the key headline number suggests that
[15:24] Speaker 4: we're probably going to see about three point seven percent
[15:27] Speaker 4: of nomenal retail sales growth planned in for the next
[15:31] Speaker 4: few years, and that's not ambitious in my view. I
[15:33] Speaker 4: think he's still along the side of accepting a slower
[15:36] Speaker 4: growth trajectory while making the structure of the economy in
[15:40] Speaker 4: a better shape. So in terms of consumption more particularly
[15:43] Speaker 4: in that policy statement, I think we should pay more
[15:45] Speaker 4: attention to the skilled towards the services consumption altogether. So
[15:52] Speaker 4: it used to be the case where goods consumption are
[15:55] Speaker 4: taking the heavy weight, and it appears to be more
[15:58] Speaker 4: cyclical coming in and out with policy stimulus. But now
[16:02] Speaker 4: we are probably seeing that transition more towards an institutionalized
[16:07] Speaker 4: framework to allow consumption and domestic consumption at large to
[16:11] Speaker 4: be the backbone of the economy to support the products
[16:15] Speaker 4: or the yield dividends from tech and innovation driven growth.
[16:21] Speaker 5: We've been talking a lot about what some people are
[16:24] Speaker 5: calling the bottom half of the key what about the
[16:26] Speaker 5: AI driven part. I mean, we had the trade numbers yesterday,
[16:30] Speaker 5: do you get a sense that even that could be
[16:32] Speaker 5: vulnerable to the global capex cycle and to what AI
[16:37] Speaker 5: related investments look like in the next.
[16:41] Speaker 6: Couple of years.
[16:42] Speaker 4: There are definitely some cyclical elements of that, But I
[16:45] Speaker 4: would like to dissect yesterday's trade data into three broader
[16:49] Speaker 4: perspective to look at China's external outperformance in a broader view.
[16:55] Speaker 6: Firstly, the AI part.
[16:56] Speaker 4: We did see exponential growth in AIS, both in pots
[17:00] Speaker 4: and expots, and that just reflects how deeply entrenched that
[17:04] Speaker 4: AI phenomenon has been affecting China, and China is also
[17:09] Speaker 4: deeply integrated in that supply chain. Given as cyclical elements
[17:13] Speaker 4: of that, you know, coming to next quarters, if there's
[17:16] Speaker 4: any risks so that, I'm sure China will be affected
[17:18] Speaker 4: as well, but that is not the big picture. We
[17:21] Speaker 4: also saw another aspects of China's outperformance, which mainly comes
[17:26] Speaker 4: from I would say the competitiveness of its supply chain
[17:29] Speaker 4: with regard to green tech and transportation. So if we
[17:33] Speaker 4: saw evxpots, which is also continuously outperforming, and that to
[17:37] Speaker 4: me reflects more of the upgrading of China's manufacturing supply chain,
[17:42] Speaker 4: and that demand for energy resilience energy security is also
[17:46] Speaker 4: a decent support from a structural perspective to China screen
[17:50] Speaker 4: tech expots.
[17:52] Speaker 5: Some of these Sorry you had another point was that
[17:54] Speaker 5: Kara just go.
[17:55] Speaker 4: The third point really is the easing of the US
[17:58] Speaker 4: China trade tensions that people have always overlooked because if
[18:01] Speaker 4: we look at China's exports by country, lowe end product
[18:05] Speaker 4: consumer goods to US has been recovered somewhat after the
[18:09] Speaker 4: piece still with the trade truths with US, some of.
[18:15] Speaker 5: The sectors that you talked about that are underpinning the
[18:18] Speaker 5: trade numbers, they're also facing over supply. The over capacity
[18:23] Speaker 5: is that a headwind or has that already been sort
[18:26] Speaker 5: of accounted for?
[18:27] Speaker 4: That's always going to be a head wings as we
[18:30] Speaker 4: think that with a lot more trade frictions with the
[18:34] Speaker 4: DM economies because of the rising export similarity the rising
[18:39] Speaker 4: competitiveness of China. So we're not really optimistic per se
[18:43] Speaker 4: about upcoming relationship between China and Europe, China, Japan, or
[18:48] Speaker 4: just broadly with the competitive industrial pack. But I think
[18:53] Speaker 4: that having been said, China's exports of EV is probably
[18:57] Speaker 4: going to continue to push through to a wider amount
[19:00] Speaker 4: markets and I think the demand is there, of course
[19:03] Speaker 4: with some frictions from the DM, but the third market competition,
[19:07] Speaker 4: China is probably going to still.
[19:09] Speaker 6: Sail through with some resilience going forward.
[19:12] Speaker 5: Talking about sailing the latest flare up in the street,
[19:16] Speaker 5: how bad does it look for China, because it was
[19:18] Speaker 5: also interesting how resilient it was even during the worst
[19:22] Speaker 5: of times in the conflict.
[19:24] Speaker 4: Yeah, here comes the massy part of the resolution. In
[19:27] Speaker 4: our base case, we always think that the streets of
[19:29] Speaker 4: hormone situation is going to be a massy resolution. It's
[19:32] Speaker 4: never a straight line. And now we see some flare
[19:35] Speaker 4: ups and we are worried about that as well. Earlier
[19:38] Speaker 4: this year we did see China showing some resilience, which
[19:42] Speaker 4: is basically a combination of some demand destruction, softer demand,
[19:48] Speaker 4: especially in a refinery sector as well as it's buffers
[19:52] Speaker 4: and the inventory that has built up. But inventory is
[19:55] Speaker 4: not infinite. We do think that the risk is accumulating
[20:00] Speaker 4: as we move forward with more closures and more disruptions.
[20:03] Speaker 4: So all we can see is that China is now
[20:06] Speaker 4: running on about first. But the clock is taken for
[20:09] Speaker 4: China as well. So if the disruption is going to
[20:12] Speaker 4: last longer. We do think that China will continue to
[20:16] Speaker 4: draw down reserves at the point of time while remain
[20:19] Speaker 4: a sensitive margin buyer of crude oil and enter the
[20:22] Speaker 4: market wherever price seems to be appropriate for them.
[20:26] Speaker 6: It's not just a crude storry.
[20:27] Speaker 4: I would also like to fleg that there are also
[20:30] Speaker 4: LNG aspects of that and other key strategic inputs such
[20:33] Speaker 4: as helium or keep products for manufacturing sectors. So we
[20:38] Speaker 4: do think that China will start to remain a little
[20:40] Speaker 4: bit cautious as well as the disruption happens, But it's
[20:44] Speaker 4: overall managing on kind of sitting through and managing with
[20:50] Speaker 4: precautions is our base case.
[20:52] Speaker 2: That's pitch On Lou Asia, economist at Fidelity International, speaking
[20:56] Speaker 2: with Bloomberg TV host April Hong, bringing you their conversation
[21:00] Speaker 2: here on the Daybreak Asia Podcast. Thanks for listening to
[21:04] Speaker 2: today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday,
[21:09] Speaker 2: we look at the story shaping markets, finance, and geopolitics
[21:12] Speaker 2: in the Asia Pacific. You can find us on Apple, Spotify,
[21:16] Speaker 2: the Bloomberg Podcast YouTube channel, or anywhere else you listen.
[21:20] Speaker 2: Join us again tomorrow for insight on the market moves
[21:23] Speaker 2: from Hong Kong to Singapore and Australia. I'm Doug Chrisner,
[21:27] Speaker 2: and this is Bloomberg

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