Asks about implications of higher Japanese yields.
Guy
Lourlene Renault
Move is very domestic due to election and potential fiscal easing; could trigger more aggressive BOJ rate-hiking cycle.
Asks if Yen weakness could force BOJ to act.
Guy
Lourlene Renault
Ministry of Finance could intervene on FX market; BOJ would wait for election result and then could be more aggressive with rate hikes if more fiscal easing.
Asks about higher yields in Japan and US due to Fed independence conversation.
Anna
Lourlene Renault
Fed story had impact on long end but came down after Congress pushback; Japan is unknown due to election outcome.
Asks reason for expecting two Fed rate cuts.
Anna
Lourlene Renault
Expectation linked to consumer, specifically low-end consumer suffering; watching retail sales and labor market.
Asks what CPI number would fade expectations of two cuts.
Tom
Lourlene Renault
0.3% month-on-month is key; as long as below or close, Fed has leeway to cut.
Asks when inflation gets to 2% target.
Tom
Lourlene Renault
Scenario has it for second half towards Q4; could happen quicker if oil slides to $50/barrel.
Asks where the most obvious mispricing is.
Guy
Lourlene Renault
Government bond market: nobody wants long end but absolute yield levels are attractive, especially JGBs hedged into dollar.
Asks if corporate bond market is mispriced.
Anna
Lourlene Renault
European high-yield spreads around 260 bps not compensating for default risk; have selective approach.