Deutsche Bank's Ozan Tarman and Aditya Singhal on Understanding the Macro Risks

It is hard to have a markets conversation that isn't out of date within a minute or two. But we think this one, with Ozan Tarman and Aditya Singhal of Deutsche Bank, is basically evergreen. This conversation, recorded at our live show at Wilton's Music Hall in London, is all about fundamentals: How Tarman, DB's vice chair of global macro, and Singhal, the firm’s head of EM trading across rates, FX and Credit, make sense of conflicting headlines, whether the rally in tech stocks is to be believed, the tug of war between fast money and central bankers, and how traders are evaluating the difference between the AI models coming out of the US and China. Read more:Global Inventory Race Intensifies in Shadow of the Iran WarEmerging Carry Trade Rebounds, Top Picks Include Real, Rand Only Bloomberg - Business News, Stock Markets, Finance, Breaking & World News subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots Subscribe to the Odd Lots NewsletterJoin the conversation: discord.gg/oddlotsSee omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Tracy Alloway?

  There are some market stories where you want every detail. Joe and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets fast. That's the Barclays Brief podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

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• 1:28Speaker 03

  Bloomberg Audio Studios. Podcasts, radio, news.

• 1:44Tracy Alloway?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

• 1:48Joe Weisenthal?

  And I'm Joe Weisenthal.

• 1:50Tracy Alloway?

  Joe, our live show in London, recorded May 7th at Wilton's Music Hall. A lot has happened since then in markets. It's hard to have a markets conversation that, you know, isn't out of date within like a minute or two.

• 2:03Joe Weisenthal?

  Yeah.

• 2:03Tracy Alloway?

  But, but I think this one, this one carries on. I think this one is still relevant.

• 2:08Joe Weisenthal?

  Well, you know, I have to say. I always feel a little anxious about recording markets episodes because of this very phenomenon. But this is true for our live and our recorded shows that by the time it comes out, who knows how much it'll have changed.

• 2:19Tracy Alloway?

  This is why you should go to the live show.

• 2:20Joe Weisenthal?

  That's exactly where I was gonna go. It's actually good to record markets episodes of the live show because that's like, alright, you create an inducement to get people to buy a ticket. But again, you know, with a lot of these things like how traders are digesting this particular moment in time. Sure, the headlines and the prices on the screen change, but there are certain like principles and frameworks for understanding what's going on that will be sort of useful regardless of what's happening in the meantime.

• 2:44Tracy Alloway?

  You mentioned frameworks and that is the perfect framing for this discussion. So we indeed had the perfect guest. We spoke to someone who's been on quite a few times before. One of our favorites for letting us know what the big money is actually thinking about and trading. We spoke with Ozan Tarman. He is of course Vice Chair of Global Macro over at Deutsche Bank. We also spoke to his colleague, someone who hasn't been on the show before, but who has quite a reputation, one of Deutsche Bank's star bond traders, Aditya Single. He is the head of EM trading across rates FX and credit at Deutsche Bank. So take a listen. Okay, let's start with the obvious question. Lines on the chart keep going up despite what would seem to be some challenges to the global economy,

• 3:29Tracy Alloway?

  to put it mildly. Why?

• 3:31Speaker 05

  First of all, even when I walked in, I was checking with you guys. It wasn't like that 15 minutes ago when.

• 3:37Joe Weisenthal?

  We're now recording this at 7:33.

• 3:39Speaker 05

  Exactly, 20 seconds. When one agency claimed that Operation Freedom was back on, that President Trump could try to open the Hormuz by force. S and P and oil, S and P didn't like that at all. Oil was surging higher than Al Jazeera denied, so we're all calmer again. But bottom line is why we keep going higher despite everything that Javier and Lorcan said is because buses are empty. When I say buses are empty, I don't only talk to my portfolio managers, but men on the streets, to my college classmates. One of them was like, what do you mean buses are empty? That means investors don't have it. The analogy is a bit like closer to April 2nd, April 9 of last year, when we had the big tariff shock, billboard up.

• 4:24Speaker 05

  We thought that it would be the end of the year, end of the markets. Then President Trump stepped back and the markets never looked back. A bit similar, coincidence or not, March 31st is the first time he claimed through Wall Street Journal that he would separate State of the Formos and the operation, that the two could go separately. None of that happened, but that was the first big breath market took. And on April 9, exactly on the same day, the big first postponement came.

• 4:53Joe Weisenthal?

  Right.

• 4:53Speaker 05

  He said, "I'm not going to do anything for two weeks." And since then, markets never looked back. A historic led by tech, Nasdaq and S and P rally. And you know, I talked to a lot of people, a lot of, you know, key ladies, guys. Honestly, maybe three, four, five people really believed in this rally since April 1st, April 9. That's one big part of it, but it can't be all positioning. Also fundamentals, right? Earnings.

• 5:22Joe Weisenthal?

  Yeah.

• 5:22Speaker 05

  Again, head of sales, one of my legendary researchers, Jim Reed, just today, he was on Bloomberg as well, talking about earnings in Q4 of last year, just 13% growth. Q1 record is biggest in five years, led by tech 24%. And that engine keeps us going.

• 5:42Joe Weisenthal?

  Yeah, the earnings are what they are. So here's something I'm curious. So Ozan came in and he gave us the latest headlines. Thank you, because I haven't, I hadn't been looking.

• 5:50Speaker 05

  Part of my job.

• 5:51Joe Weisenthal?

  Yeah, exactly.

• 5:51Joe Weisenthal?

  He didn't look at his phone for 15 minutes, which might be a record. It's a record. How do traders deal with the market in which there are just the sheer number of headlines? How would you, and how do they know what to take seriously? And like, you know, what's real, what's not real? Like, how are they ingesting news?

• 6:09Speaker 06

  So from a trading perspective, right? Mostly, almost everybody, fundamentally five asset classes, right? So you have a thematic view and you have rates, FX, credit, equities and commodities. And a lot of people are fixated or are mandated for asset class, per se, right? So they have no choice but to stick within that kind of region. And then of course, if you're a real money investor or a hedge fund, or if you are a sell-side trader, just depending on how you are positioned, right? It's not really, it's difficult to get in and out, right? So thematically, you Have to take a structural long term view, see what every asset class is pricing on that particular view. And define an upside downside kind of scenario.

• 6:50Speaker 06

  And based on the liability profile you have and that how you define that is the function of the money you have. Or what kind of drawdowns are acceptable. You take a particular position and you let it play out. So in this kind of environment is difficult. So what is the upcoming kind of positive news that you can you can rely on to the market right today? If you were to sit here today, you say, okay, so the fact that not much action has happened in the last three to four weeks. Within the straight means that at some point or the other, the resolution will come. Pakistan is is mediating, as we can see, there's been enough talks happening. So you you assume that a resolution should come, that's what the market is pricing theoretically. You also have a situation with Russia, which is developing, right? Russia Ukraine war, which could be positive also.

• 7:34Speaker 06

  And then you have the visit, the US visit to China, which also is the item positive. Now, of course, there's a lot of it isn't the price per se, but fundamentally speaking, as a trader, you position yourself. And and then you just choose, you know, at some point to close it to the time, get out.

• 7:52Joe Weisenthal?

  But just like, just I and I, that all makes sense to me, but like, are traders sitting there with a truth? Social window open, like the literal like ingestion of news, how do you do it?

• 8:04Speaker 06

  Just getting the messages from me.

• 8:06Joe Weisenthal?

  Yeah, right, just kidding.

• 8:07Tracy Alloway?

  Well, someone needs to make like a motivational poster that says, Lord, give me the confidence of an equity investor. Trading on an Axios headline.

• 8:16Joe Weisenthal?

  Yeah.

• 8:16Tracy Alloway?

  Like, I feel like that would that would sell out, right?

• 8:18Speaker 06

  We have one open.

• 8:19Joe Weisenthal?

  Yeah. But seriously, yeah.

• 8:22Speaker 06

  Generally, we we we have no choice. But fundamentally, it's like this, right? So you make a you you you see what's so so we had a if you were to look at the rates market, for example, just as an example, right? There was a six sigma event that happened within it. At some point, the pricing gets to a level where it doesn't make any rational sense.

• 8:42Joe Weisenthal?

  Okay.

• 8:43Speaker 06

  So you start to look at that on a on a more structural basis and you start to ignore the noise in the middle. And whether we like it or not, we have to operate. With that kind of philosophy, so you take one side or the other. It's very difficult to trade the headline because it's impossible because as of now you had two conflicting headlines. And you can get caught out. So most people have come to that understanding. So you've taken a perspective or a view that either this is going to get resolved. Or if you believe it's not going to get resolved, there's a way of expressing it within the five asset classes. Where you might get the most convexity. Similarly, if it gets resolved, there are certain things that actually might work, which haven't yet worked. So you take those sides and you just sit and wait.

• 9:25Tracy Alloway?

  You know, you mentioned irrationality just then, which means we should talk about AI, right? Because all of the stock market rally at this point essentially seems to be a bet on AI. What are you hearing from your clients, Ozan, on how comfortable they feel with this?

• 9:42Speaker 05

  Well, eh, just two days before the Iran war began, we were in West Palm Beach and Miami with Adiche as well. Eh, visiting clients. And then the whole talk of at least that town, but US in general was eh, that famous Trinity piece, the other fifty million stamp piece, something big is about to happen. How eh, in twelve to eighteen months, fifty percent of white collar jobs could be wiped out. What that could mean for rates, that in itself is very, very telling, right? Eh, and because of that, and one stock stock claims number. If you remember US ten year, that Friday before the bombs came in, closed at three ninety-three.

• 10:22Speaker 05

  And one of my more famous friends, clients sends me a message on that Friday night, bond is the new gold, three ninety-three, top tick close. Then Iran war happens, not that surprising, but of course the how it played out is very, very surprising. Warflation hikes getting priced in eh, so people completely pushed aside. The slowdown, job growth, labor part of it. And then started completely focusing on the equity, the growth, the AI engine. Again, if you just go back to eh, January, February, we were quote unquote happy because the thing was broadening out. It was a rally, but it was a rally led by Russell as well. Would it be magnificent four, magnificent three?

• 11:04Speaker 05

  Magnificent seven was forgotten and now, Lord behold, some of us, thank God, have three month memories. Now, now we're complaining about, oh, it's all about seven stocks, the breakfast two, two, we were just fighting ways to try to. Fight and wrestle away the rally. But so back to your question, at the moment, yeah, the Kool-Aid is to believe that this AI run may have another one to two years to go. Paul Tudor Jones, Public, one of definitely my more famous friends, today claimed that that's the case and made the 1999 analogy. So either you swim with that or try to fade it.

• 11:43Joe Weisenthal?

  You know, this is the other thing. All right, so we talk about these very worrisome scenarios, the price surge in oil, but very worrisome scenarios about deep shortages in various commodities. So that's one reason to be worried. But then there's this other thing that basically, you know, the disinflation has stalled out if arguably it's going in the other direction. Rates around the world in, you know, we're, I think, you know, there was some sort of, what was UK 30 year?

• 12:11Tracy Alloway?

  The highest since 1998.

• 12:13Joe Weisenthal?

  Yeah, so again, just intuitively, you would think that these things compound each other and should really take the wind out of the sails of risk appetite. And yet, so how is it that like, even like, you know, what we see going on in selling of, how does the selling of sovereign bonds mix into this market in your view?

• 12:32Speaker 06

  So let me take this to actually give you a thematic kind of how to think about things, right? So just to give a perspective, right? So ultimately, there is only one thematic view that matters for the next few years, right? And that is, if you were to, you have China and China-aligned countries and you have the West, right? If you were to take China and China-aligned countries, right? And they were in space, what does West need theoretically in both manufacturing and services?

• 12:58Joe Weisenthal?

  Uh huh.

• 12:59Speaker 06

  And if you were to reverse the roles, and if the West was in space, what does China and China-aligned countries need, both in manufacturing and services? And the reason I'm bringing to this point is because I want to give a perspective. So what happened, right, in the last many years? So this microphone, for example, right? This, most of the material in here comes from China.

• 13:17Joe Weisenthal?

  Right.

• 13:17Speaker 06

  Or China-aligned countries, almost 90%, right? Manufacturing capacity of the world is 55% China, China-linked, but some places almost 90 to 95%. Take an example of cobalt, cobalt refining, all in China. Now, in the past, what happened was they would give you this microphone and you would give them dollars or pounds or...

• 13:36Speaker 06

  Euros or whatever it is. So they hold that. So China holds that. What is the most rational thing for them to do? The most rational thing for them to do was to buy your land with that money. But you said no. Then they said, I'll buy your equities. You said no to that too. Then they said, what, you know what? I'm gonna buy the commodities that you might need in the future. You said, fine, do it, which is what China did for years. Then, here's the interesting thing. You said, in return, let me sell you my services. So let me sell you fine wine. Let me send you the Gucci, you know, more, you know, phenomenal bags.

• 14:11Joe Weisenthal?

  Top-tier educational services.

• 14:12Speaker 06

  Top-tier education, education and a lot of other things. And then also services. Services, whether it's a Microsoft Excel or whatever it is, right? But now, what's happening is you have that side of the world, which is also building their own services stack. So tourism is now onshore. They started building their own cars up the chain, value chain. So you're getting to a stage where if you expand this thematic view, you in the West have to literally build all of it from ground up. So if you assume China was in space, they can still disrupt the services sector, but they can't disrupt the manufacturing sector theoretically anymore. Because you can, you will have to build it all up. So if you want cobalt and if they say no, you have to refine it, mine it, refine it. You need to have companies that refine it. You need to have the engineers that do that work.

• 14:57Speaker 06

  And fundamentally, that's what the fundamental paradigm of the world is. So when you talk about sovereign debt or any holding of, or any equity holding, ultimately, the creditor is China and China-aligned countries. They are the creditor to the West and we are the debtor. And this is only increasing. So if you believe the wizard, what is the ultimate objective agenda of the visit of the US to China is to balance the current account to some extent. That's one agenda. And of course, there's certain other aspects to it. But fundamentally, that's what defines the kind of makeshift of the next kind of year, two, three years. And whether we like it or not, we have to build this.

• 15:52Tracy Alloway?

  There are some market stories where you want every detail. Jo and I have made quite a few podcasts on that basis. But sometimes you've only got 10 minutes and just want to know what's moving markets, fast. That's the Barclays Brief podcast. Every week, experts from Barclays Markets and Research get you up to speed on what's happening and what to watch next. Concise, focused, and brief. Search Barclays Brief wherever you get your podcasts.

• 16:19Speaker 03

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• 17:03Speaker 03

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• 17:42Tracy Alloway?

  I want to come back to China versus the US on AI in just a second, but I definitely want to also ask this question because we are in London. How big a deal are the UK elections from your respective purchase, the local elections that are happening tonight?

• 17:58Speaker 05

  It is important because basically, UK and abroad, there is for the past two years at least, a big fight between fiscal dominance beliefs, 10 years, 30 years, more importantly, 30 years. Around the world, will they get more out of control? Since we are in London, will we have the dear least trust two moment? Or will financial repression mean emerging market style, Treasury and central banks working more closely together, especially on issuance, issuing less on the long end, more on the short end, taking a risk, but making sure that 10 and 30 years are under the leash?

• 18:40Speaker 05

  In fact, a very key investor last summer, as in a smaller round table, what happens if all four of them, this was probably August issue before back to school, September races began, US, France, Japan and UK, if all of them had their trust moments? And then September came in, I remember us talking about this. Yes, it happened, but only four hours in the gilt market, and that was it.

• 19:04Joe Weisenthal?

  I remember that little mini, that moment.

• 19:06Speaker 05

  So now there is an excitement again, because UK has a different risk premium, net international investment portfolio, i.e. has a budget deficit and the current account deficit has to be nice to the foreigners because they will buy our debt. There are question marks on what this local election may mean for the government. Will there be a change there or in the Chancellor? Will somebody more to the left come in? All these are under question mark. Famous last words, my feel is for the moment, still this financial repression will win. We won't have the trust moment too, but obviously, they will need a little bit of luck for the Iran situation to continue to calm down. Because unlike

• 19:50Speaker 05

  The trust moment, trust moment one. Now, all of this is happening for reasons much beyond the UK.

• 19:57Tracy Alloway?

  Joe, I am impressed that we always manage to schedule these macro conversations for maximum event risk between when we record and when it actually publishes. So we have the UK elections, everything happening with Iran, and we have non-farm payrolls tomorrow.

• 20:10Joe Weisenthal?

  There's so much going on, and we just apologize in advance. This is why people should buy tickets to the event.

• 20:16Tracy Alloway?

  That's right.

• 20:16Joe Weisenthal?

  Because if you have to hear this conversation on the podcast feed, who knows, it could be out of date, but those who are here don't have that issue. Is EMification of Western policymaking, is that an apt characterization of it? Setting aside specific, you know, elections here or there, you hear that term EMification of, and is that apt?

• 20:40Speaker 06

  It depends, right? So it's country to country. In this, again, paradigm, you have, so let's take the UK as an example. Let's elaborate further. Rail rates are reasonably high. The country's gone through a difficult situation, courtesy what happened with oil, the pass-through effect, but it's happening pretty much everywhere else in the world. You have a current account which matters, mostly in most EM countries, including UK. You have an input factor of energy and you have an output factor of services, effectively, that you said. So depending on where you are in the world, which country, depending on who you are, if you have a situation where you're an energy importer and your exports are highly dependent on effective services,

• 21:24Speaker 06

  which are getting disrupted courtesy AI, you're in trouble. Alongside, if you're an importer of manufacturing also, or goods, again, you're in trouble. So this adjustment will happen. So you have to have allies. You have to have people who you do a quid pro quo with. And that adjustment is what we're seeing effectively. And markets are finding a true balance of risk premium alongside.

• 21:49Joe Weisenthal?

  Well, okay, so on this point, two things you've said, which sound very rational on stage. Having a series of allies, I don't know if those are stable. And then also, you know, this aspiration to balance the current account between the US and China. It sounds nice, but like, do you think like, are there actually any real prospects of moving the dial on that kind of thing?

• 22:15Speaker 06

  So again, I don't want to comment here. This is in terms of our house view, but in general, but I'll give you a general perspective. On the same example, if you were to get west in space and ask China, what does it need from the west?

• 22:26Joe Weisenthal?

  Yeah.

• 22:27Speaker 06

  It's not much.

• 22:28Joe Weisenthal?

  Yeah, I've heard.

• 22:29Speaker 06

  Apart from Boeing and Airbus spare parts, if you were to just look at it from that perspective. So, so there is a desire. And maybe there is an, they will oblige. I do think there is certain things like, for example, agricultural products that could benefit. There are certain aspects, but fundamentally, unless we choose within the west to build the whole manufacturing stack. It's going to be very difficult to keep this current account balanced.

• 22:54Joe Weisenthal?

  Yeah.

• 22:55Speaker 06

  And on top of it, the biggest worry, and again, I may be jumping on this point is when people talk about the AI stack that the west is investing in, the capex stack that the west is investing in. The key is not what the west is doing. The key is to understand what China is doing in it. Understand what they are doing with the deep sea version four models, the GLM five, the Huawei clusters. I can go on with an optical compute, there are quantum computing, there are many more things that they're actually investing a lot in. Which effectively becomes a true competition and a cost factor reduction. If there is a risk, that is the risk to watch out for, right? It's not to study what we are doing here because we will find ways to keep evolving. But you have

• 23:39Joe Weisenthal?

  Yeah.

• 23:39Speaker 06

  an ecosystem there, which is actually quite well versed and also has a lot of capital behind it. And there was somebody who was quoted, says, most of the engineers today actually are from that part of the world.

• 23:50Speaker 05

  Another thing that the market miscalculated, right? Right after Trump got elected the second time. December twenty four, January twenty five, by far the big consensus trade besides the US ten years going to five fifty, you know, everybody being dollar long was to buy these dollar CNH options, strikes at seven seventy five, eight.

• 24:08Joe Weisenthal?

  Everyone I knew was buying dollar CNH options.

• 24:10Speaker 05

  There you go.

• 24:11Joe Weisenthal?

  No, it's a joke. Keep going. Yeah, yeah.

• 24:12Speaker 05

  And and what happened? It's the stark, the stark currency is the other way around, C and H. So that shows you, even though some people are really into saying markets are never wrong, you're wrong. That can be very, very wrong itself. So we are all human beings and certainly that can make markets very wrong itself. One more Asian country that we need to talk about to bring you right to the markets, Japan, right? So to your question, higher oil, higher rates, why doesn't this thing bring down equities? Why are these now? Why is this guy always sending messages, bus is empty, nobody's buying it? It can be quite frustrating, right? Last Thursday, Friday, it almost happened because, you know, it just feels itchy.

• 24:53Speaker 05

  Dollar yen looked like it would break one hundred sixty. It looked like US rates would continue to sell off. Hormuz, again, question mark. There was, there wasn't a detente. And then, just like the rate check of at the beginning of the year, one of my closest friends, not on our trading floor, but on the sector. I had heard this big Irish voice, you know, you know, this is in New York calling on behalf of Bank of Japan. I'm like, what's going on with this guy? And because he was shouting around, because they they want to make sure that, you know, public information, they told those three banks that they called. Would let others know that they were watching. Similar, this time around, Fed didn't call, Bank of Japan itself came. And they punted for risk parity. What does that mean?

• 25:36Speaker 05

  They punted for lower volatility, calmer waters and stable rates. The moment they push down yen, dollar yen lower, yen stronger, US rates calm down, equities got a bit, etc., etc. So it's always a tug of war. On one side, risk parity camp, mostly central banks trying to keep things calm. And on the other side, sometimes my dear fast money friends looking for more twenty twenty two like years. Christmas come early, every Friday, another fifty basis points sell off on T Y, US ten years, higher volatility, etc., etc. And us stay in the middle and try to decide which one is right.

• 26:15Tracy Alloway?

  Can't you just tell your fast money friends to calm down for a little bit?

• 26:19Speaker 05

  I do, I do. They usually listen to me.

• 26:21Tracy Alloway?

  A detail. I want to go back to what you were saying about US versus Chinese AI models. Because if we think about how much the stock market Rally is actually dependent on AI at the moment and how much of the AI story is dependent on this idea that like, well, the West has these amazing, more sophisticated, albeit more expensive models for which the, you know, TAM is basically the entire world. And you're arguing that actually that's not the case and China's models are perfectly suited for its own needs. Elaborate on that. How are you as a sort of trader evaluating these models? How much of your day basically is now just trying to figure out AI?

• 27:00Speaker 06

  It's a very, very good question. And the key here is, is to understand what are you, so currently there's a whole, there is a very, very strong narrative. Yes, also a very strong use case. Now, the valuation stack versus a forward earnings kind of multiple, right? If you were to look at it, right, says that there is going to be a huge CapEx investment within the Western stack for the next three or four years. And that's what's created this rally within various companies and the second order effect companies. China is doing something similar. It's very clearly said in the West that they are effectively using Nvidia chips. Nvidia is just a company, just to give an example, but just their chips to train the models. In reality, now they have Huawei chips, which are pretty much parallel or comparable to H100 processors.

• 27:44Speaker 06

  The big problem and that the West is not appreciating is, is that the reason West is investing so much in CapEx is because they want to effectively get to superhuman intelligence very quickly. So almost everybody's saying, okay, you have a model that has 7 trillion parameters, now we go to 15, maybe at 25, 50, and it becomes self-learning. And it's a reinforcement. But the reality is you have things like distributed AI. You have things which is actually being worked on in the West. You have also things which are very different, which is something as simple as quantum computing or I would say optical GPUs, right? It's another concept. Please read about it.

• 28:23Speaker 06

  So you have currently, there was a, there was a narrative in the West where you had GPUs of Nvidia and you had a copper connector between them. Now you have optical compute firms or optical firms effectively that have done very well in the last many kind of months. So this narrative. Will remain, right? Having said that, if you keep an eye on what's going on on the other side of the world, also use case in terms of actual uptick of usage, because it's not like I'm going to run five different AI models together. I'm going to probably converge to one at some point. Will eventually cause some kind of a problem in the future. The second thing that you have to keep an eye on is also robotics. That's the other aspect, which is going to be the second narrative that is actually going to start within the Western stack, which is the Elon Musk revolution of Optimus.

• 29:08Speaker 06

  And again, something to keep an eye on, what's happening in China within it versus what's happening in West? And how deficient is West on it?

• 29:15Joe Weisenthal?

  You talk about, okay, this microphone that we're talking to, almost certainly, the majority of it or all of it probably made in China. How much do you see clients or people that you talk to purchasing Chinese financial assets, including Chinese government bonds, which more and more people are talking about, not just a safe haven, but a safe haven that's done well and a diversifier? And how much is that becoming a meaningful part of portfolio construction?

• 29:41Speaker 05

  It can grow. I mean, already it's happening with FX, but you know, people first denial, then anger, then acknowledgement, right? They realize that the FX train has moved. To your question, government bonds, Chinese assets.

• 29:56Joe Weisenthal?

  Yeah.

• 29:56Speaker 05

  Just two, three years ago, even when I went to Singapore's and Hong Kong's of the world, people were either fearing, claiming, being very confident that China was uninvestable.

• 30:07Joe Weisenthal?

  Yeah, I remember that.

• 30:07Speaker 05

  And deep inside, I was saying, if China is uninvestable, you know, your future in Singapore and Hong Kong, I turned out to be correct, right? But it turns out, it starts with FX, but there is still a lot more room to go in Chinese equities and Chinese bonds. That bus is also not full.

• 30:23Joe Weisenthal?

  Okay.

• 30:24Tracy Alloway?

  All right, lots of empty buses around. Ozan and Adita, thank you so much for coming on All Lots. Really appreciate it.

• 30:30Speaker 05

  Thank you for hosting us.

• 30:44Tracy Alloway?

  That was our conversation recorded live in London on May 7th. Shall we leave it there?

• 30:49Joe Weisenthal?

  Let's leave it there.

• 30:49Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alockway. You can follow me at Tracy Alockway.

• 30:54Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashil Bennett at Dashbot, Kell Brooks at Kell Brooks, and Kevin Lozano at Kevin Lloyd Lozano. And for more Odd Lots content, go to Bloomberg.com/oddlots. We have a daily newsletter and all of our episodes. And you can chat about all these topics 24/7 in our Discord, discord.gg/oddlots.

• 31:19Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we do these live shows and want us to come to a city near you, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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