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00:00We the markets life team put out a note they're saying while the planned budget deficit for 2019 is larger than most had hoped for. It's hardly the end of the world. This budget shouldn't be enough to tip Italy into a full blown crisis you're seeing some opportunities. I was cut a bit off guard by your call on on small caps in Europe year to date performance on some of the benchmark gauges here. Pretty much flat. What excites you about this particular play Max yes we have very recently been turned bullish on European small caps. That's because of the fact that we think that the performance divergence between the US and Europe is overdone . So of course yes it's a much better state than Europe. But the difference is just too much. And the current correction in European assets because of the Italian situation for us offers a great entry opportunity and we think that European equities are likely to be catch up with the rest of the world. So not so much as a US coming down but European equity markets rallying a little bit more than their counterparts and therefore European small caps are very well poised to take advantage of this move . And that's something that we'd like ending the year and potentially also for the beginning of next year max. Just looking at the euro obviously we've touched on the dollar and the momentum in the dollar but the euro's down for the fourth day in the row the longest losing streak since the middle of August. You think in the very near term that there is Euro risk an Italian contagion a perception of contagion even if it dissipates this euro is slipping ever so slightly here in the short term you know the market and so will always overshoot a little bit. So your dollar could fall a little bit more. So let's see if the 115 level holds. But in general Short the dollar basically are going to have a little bit of your weakness at the same time some dollar strength. So till the end from here till the end of the year you might see your dollar falling a little bit but going into next year we think your dollar is likely to move back up. So from here on definitely maybe let's not be bullish you rose too much. But next year it's likely that it's going to come back up because of you know ECB you know ending and potentially hiking rates . Looking at September of next year and the four hopefully momentum picking up in terms of the economy as well. So we're not going to looking to go long. Now you're a dollar but I think that moment will come quite soon .

We Are Bullish on European Small Caps, Says SGMC Capital's CEO

Massimiliano Bondurri, founder and chief executive officer at SGMC Capital, discusses European equities and his outlook for the euro. He speaks on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

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