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00:00Let's talk about the markets in three minutes then Mark and let's just linger on these points about China it doesn't have any long term impact then because it's Covid policy that is really at the heart of this of course. I think it's very marginal. As I said I really like the fact it's a smart move. What they've effectively done but they're expected to cut the five year low prime rate on the one year both by five basis points. Instead they kept the one near the front and one steady and they cut the back one by 15 basis points. Now 15 basis points versus five basis points expected. It's pretty marginal on a five year rate. So I wouldn't get excited but I like the way they're essentially flattening the curve. And that's an acknowledgement that hey we do want to ease policy too much the front end because we still do have some some sectors which got a bit both malicious a little bit overextended. And even though we're going to go to get a growth slowdown we don't want to kind of reinflate those bubbles but they are acknowledging the growth slowdown. I think it's a clever move. I liked that signal but yes bye bye. Next week we're gonna move beyond this. Where to go back to the old folks as of are they supporting the economy with enough fiscal stimulus and what are they doing about Covid. Okay. Yep. See. So we'll keep keep that in mind of course. Now yesterday we saw quite a lot of dollar weakness certainly in the early hours here in Europe. And I kept having replaying those conversations I had with you over the weeks gone past my way. You kept telling me that things are going to change. The dollar is going to be peeking out. See you know the dollar index is going to be peaking out soon. And certainly it looked that way. Yesterday's is this is this turning out to be the turning point that you envisage. Because that would make life a lot easier for some of these emerging markets. We talk about I'm delighted we get to talk about a win for once. I thought that's good. So thank you very much China for leading it in that way. Yes you're right. I look I did write a piece last week saying the dollar would probably peak last week on the dollar index specifically. Unfortunately that doesn't appear to be the case very much a focus last week's piece on the idea of the dollar index. That was because the dollar index was basically a euro view and yen view. And my point is that yen will be a haven. When we worry about growth we stop worry about inflation. And that's worked very well. The euro bit was a little bit more dodgy to the end of last week. It wasn't looking so good. But this weak euro is starting to get a bit of a bit as well. And I do think that the dollar has peaked. No. Put in a multi week peak potentially last week. It put in that week. And I think it's by next week we're really going to get excited about that unless we see a major bounce today. The close this week will make people realize oh wait that the dollar's just had the worst week it's had in several months. This is quite dramatic. We're getting a turn in trend and that's a little bit positive for financial assets outside America because it isn't easing of financial conditions at the margin. Okay. Now talk to me about options expiry Mark. I read a headline today says Fasten your seat belts. I feel like it's been a busy week. Enough already you said. Thank you. Thank you. Thankfully it's Friday and we are going to have to fasten your seat belts. I mean sometimes these turn out to be big events and other days less say. Yeah I find the cellphone whenever I get excited about them they're a bit under Clement. I don't know how it's gonna go today. What I will say is that there is a large segment of the market or maybe a large minority not the majority of the market that thinks that a lot of the weakness recently has been about people caught short gamma. How do these option expires then after we get past this expiry is that there's a little bit of technical relief for the market. It will be easier for the market to bounce. I can't claim to have any particularly insight on how valid that view is but I think there's enough of the market that believes it that if we start trading better off they expire. As we start trading better next week people will start getting excited and they'll suddenly start believing that oh that wasn't what it was all about. And they'll play the bear market bounce. I will emphasize that even if we see a bounce next week that lasts for a few weeks it will ultimately be a bear market bounce. The backdrop is very negative for US stocks this year.

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China LPR Cut, Currencies, Options Expire: 3-Minute MLIV

Mark Cudmore and Anna Edwards break down today’s key themes for analysts and investors on “Bloomberg Markets Europe.” For up to the minute market intelligence and insight, click MLIV. (Source: Bloomberg)

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