Welcome to our exchange, the Goldman Sachs markets of deep from Friday may, twenty nine between Checking with a meter across the fight to get there could take on what will watch in markets objects. Would go competition to affirm and today's return, Gasters Michael himself on global markets. Division me, Michael back on and February, things are certainly changed since then. Walked back to the problematic thanks, I've me Jack, Oh what's he touched her and markets you're watching this week, the escalation in? U S drawn attention, the frightened centre for our clients and our trading does owing to through the headlines here, but this Clive intentions in it His pension allocations in recent weeks has been in exchange. The listing fee is there's been concerns over China filling this phase one trade deal- and this is obviously escalate to a point where today, at last couple days, the? U S, data up and a longer considers Hong Kong have enough I'll talk to me and the chinese rule, and that's just as China passes the National security Wall, which is going to have some clear implication for Hong Kong, so

tying it that in the markets this in pockets awakens around, but we ve seen outlines generally compartmentalize there, the? U S, China, traitorous. All you are stronger, is so far, there's still a glass half full approach to generic wrist asset pricing. Five, I would say that this week we seen a step change in focus from clients on the. U S, China issue a lot of concern that this issue could unravel their performance you today we have a lot of clients looking across asset hedges, either. act themselves or to an alpha. In terms of markets is a modest amount or risk premium pressed into China. But I think it's not enough, not only to word what was saying this week in general the past couple weeks, but I think the path of least resistance from here is clearly further escalation. So we think more risk premium to me. Those the chinese assets. For example, the chinese one is forward. Markets are only pricing about one percent of weakness over the next six months. We think that's quite a low bar for

was entirely sober. Currency outright was sink. Clients put on cheap limited, was structures which allows them to benefit from a controlled you'll, see an age weakness, and in this blockade as protector but it didn't want about viewed the pvc or people. Think of China will not allow rapid devaluation just a strategic grace on the Taiwan front was seen plenty of shots in the Taiwan dollar. These are popular for just domestic reasons. Annual China reasons, the market that surprising for Poland lengthen over the next six months, despite the current sheets and it had a sensitivity to China's to lot in the past and finally, we are seeing a lot of interest in other proxies legacy dollar, for example, one shorting battle selling the US dollar just to just to protect themselves against these issues so go beyond? U S: China, where his mother factors the clouds and focused on right now sure outside the Eu S. Your care has been a major theme for the past month, like not only has the? U S, yokels flooded with me. negative rights in the front end, but we saying pressuring pile longer and yields

breaking down in the front end. We're having discussions of clients on how this cycle is gonna, be different to other cycles. Are the feds can be more confident this awkward, keeping the front end the rights care pin through various types of would gardens in general, is not lifting off into inflation employment, a close their targets, especially vessel in previous years, Thirdly, the shipowner publicly discussing you can control as well, which could further pin yields in the front in an district Generally speaking, we think a system be tough for them to take negative yards off the table. I think we ought to bear in mind that took the feds seven years, the heart after their last thought, in two thousand and eight. So if we have some confidence at high probabilities are very low over the next two three four years. It's not a word stretched to see negative rights price even materialise near the next year or two. We run into issues and then just moving out the yoke of a little bit that the lower for longer front end actually feeds into a steep a yoke of further out, so that the FED cheat short that it yields were alone. They usually would improve cycles. This helps journal

inflation and eventually have to normalize rights at a faster pace down the track. Did you combine Miss set up today, I'm a massive step up a net supply of Treasury bonds, but very compressed inflation expectations fell throughout the curve, and you ve gotten this means that a right, the long and yields to rise more than shortened yields over the medium term point within this. That break even on market imply that inflation is actually extremely low. At moments were helping clients navigate that opportunity there. So for decades, people observing the markets in the wake of the financial crisis, talked about how everything is correlated absent, correlations broken down in the wake of covert yeah deadlines one of the big ones and in February and March, for the breakdown in correlations with gold then come dollar yen, which is extremely painful for some back client base. What about clients use, for example, fixed income is hedges and fixed income or Bonn price is actually sold off on some of the biggest risk of days and that obviously had many of our clients. City it down and correlations are important. They contain

to change. After that, initial shock is well, so it is helping them. You're, navigate his new gonna regime emission correlations of mine, so you know I'm him home for a little while now what what's one thing you learned working from home or whether we said it had to fill up some extra time so we're taking care of a lovely nine year old neighbour avows through covert in in a varies socially. distance manner, we also set off the getting enhance that, for the time being, instead of a dog, that's good hedge, on unreturned office. Well, thanks for joyously, Michael thanks to her, for she had it. That's all for this week's market update on exchanges, Goldman Sachs in case she missed it check So this week, with heat, Terry from Goldman Sachs researcher, dives deep into clean energy and politically advances in nuclear power Technology is part of our venture. Capital rise ensures thanks. Listening Oberlin saves have great began. This part gas was recorded on Thursday, twenty eight two thousand,

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