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00:00[CC may contain inaccuracies] Overdone for this year. But what about 2023 and what about when that balance sheet reduction starts happening in earnest. BUNNING Well it really depends on the positive inflation. I think balance sheet reduction of course is one factor. But on its own you know again until it combined with policy that's really tight. It's something I'd be a little bit less concerned about based on past experience. I think the key here really is that a lot of being we've seen this year seems to ultimately slow the route back to the repricing higher of Fed expectations which clearly went on longer than the market expected. But if we're really at that point now where the Fed is only delivering on what's priced in which in turn is the dominant off inflation not surprising further. If anything you know peeking around where we are today we think that of course might start to with some concerns about this continually facing higher fed rates. And of course the impact on growth. And I think that what gives us a little bit of room for optimism given where we are today at least looking out the rest of this year. What is going on when it comes to positioning on bond markets at the moment that sovereign bond markets and treasuries. Well I think the few factors going on that I think one is the backdrop is that positioning was quite one sided. We saw that of a host of indicators including our own proprietary measures. And I think that of course really exacerbated some of the moves we saw. But you know it does sort of feed into a bit of a shift in theme we've seen over the past few weeks which was you know earlier worries about inflation how much the Fed would retrace. But we haven't heard a few rumblings about worries about economic growth. And I think these are actually led by individual data points at the moment. It was individual retailer earnings in housing market data yesterday. And I think that's sort of what's driving that. But I think two points I'd make there. One is for us tailgaters for my guess at investors like ourselves it's almost a good thing we're finally moving away from where we think we've correlated to that fed move in one direction up or down. So arguably that's good for diversification. It's something we've missed for a large part of this year. And second for economic growth. Look if I use a bench a major benchmark like the ESM or BMI data point yes we know it's slowing. We expect that at the start of the year. But at the end of the day for investors for financial markets what matters is whether we go all the way down to a recession or near recession levels. And so far we don't look like we're going there at least on a lot of those mainstream benchmarks or something to monitor. But you know that's not something we're excessively worried about at this point in time at least. Mark Gurman I'm pretty in on the diversification case. What are you seeing in terms of the diversity on global government bonds at the moment and are there any opportunities to average you into some of these markets. Well on the bond side I think look there were elevated I wouldn't be surprised after yesterday's move we see that ease up a little bit. No investor diversity is one of the measures we look at of course in terms of look at what the positioning is too one sided. But I think the opportunity here is that if these are really not climbing higher and it links back to the point about the Fed is not repricing rate expectations ever higher then of course we may see some opportunities to rebalance back towards bonds. Now that doesn't mean one should ignore equities. We still think there are opportunities there. From a sector perspective the US or of course in China where we think valuations are bombed out but in bond what we'd rather do rather than jumping into treasuries alone we'd look for asset classes where just sensitive to a topping or the bond yields but also have other factors supporting the risk reward. So even dollar bonds for example is one asset class that has been quite sensitive to the rise in bond yields. You do get a lot of duration there but credit spreads are also very wide. So I think you're getting not you're not relying on one engine of returns alone. So I think that's one good example. In addition of course to high yield. And we still think Asia dollar bonds is still relatively uncorrelated area within that because it's much more about getting to a turning point in Chinese policy rather than a US dollar duration call. So I think that it's a mix of assets which we think you know starting to look interesting again. Are you seeing that turnaround around in Chinese policy. We have seen dozens of new measures coming from policy makers. I do wonder if there is a good time to get into Chinese property right now. Well know timing especially bottoms is always tricky. And I think the one thing with policy measures is that one does need patience. You know it's a lot of measures. You know I have a hard time having a direct impact on economies and locked up. So I think one point we'd make is that we do need to get past the most acute face of locked onto large parts of the economy. And second as many measures like credit we have seen the credit impost on higher. We saw it in a BBC encouraging lending. But these are measure that start having impact on markets in the real economy with a lack of a few months. Now the good news is we've already seen several of these major stocks have done higher at least one of credit impulse perspective. So at the end of the day for six month investors like ourselves we do believe those conditions are in place whether that's for equity markets where valuations are extremely low whether in history or you know 30 percent discount to global equities or in bond markets where we don't need to repeat how bummed out valuations are in the high yield dollar space. So at the end of the day we think what's what's a positive catalyst. That direction is clearly turning just barely much more effort. There's a raft of measures to support economic good. And I think that's the Catholics who are looking for. I think there are few specific measures in high yield for example to support liquidity. I think that would really be the key if that extends to unlock some of the value there. So I think it does require patience after a time a bottom. But for long term investors we think the value is definitely that.

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Asian, Emerging-Market Dollar Bonds Look Interesting: Standard Chartered

Manpreet Gill, head of fixed income, currency and commodities strategy at Standard Chartered Private Bank, explains why he thinks growth worries may be overdone at least this year, and discusses Federal Reserve policy and its implications for financial markets. He also discusses the investment opportunities he sees with Haidi Stroud-Watts and Shery Ahn on "Bloomberg Daybreak: Asia." (Source: Bloomberg)

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