Mark let's start the clock then and Think about the markets we have three Minutes to do so we're looking ahead to Us cpi that's got to be our headline Conversation i suppose is this going to Tell you whether we get a 50 basis point Hike in march is that what's at stake Today That's where everyone's looking at it But i think it's going to be hard to Make that decision tomorrow you tell me The reading now you tell me if it's Seven percent or seven five point five Percent yeah consensus expectation is Seven point two percent to be clear and I would not be able to tell you whether We get 50 basis points i think we still Will probably go into that way with a Hawkish bent Because the backdrop of a building Economy in the us the building inflation Pressures whenever we get on inflation Today the fact is commodities continue To nudge higher and we continue to get Those inflationary signals however short Term it is certainly being hyped up as a Signal for march Okay and what are you seeing in the Broader commodity space you talked about This when we looked at the gmm about Strengthens commodities about Agriculture about metals but not about Energy and Makes us ask questions about whether
We're seeing a bit of divergence there We're definitely seeing a bit of Divergence is it sustainable probably Not longer term uh you find generally The overall commodity sphere tends to Move and some of the macro issues i.e Dollar issues yield inflation The global growth outlook but they can Diverge in the short term because they Have very very different micro Fundamentals what is interesting is food Prices continue to surge and i think This is really really squeezing the Consumer as you know it is one of my big Concerns for 2022 i think the most Similar environment we had was going Into the arab spring coming out of a Deep recession posted a great financial Crisis um inequality in terms of the Recovery from that recession and the Fact that we had food prices surging and High energy prices we have all those uh Elements again today and i think in Certain countries that is an issue Turkey is on my radar of where there Does seem to be increasing tensions Around the rising costs and those Inflationary pressures and so i'm Watching that around the world Especially with the trucker protests Particularly in canada so we are seeing In commodities food prices continue to Surge energy prices just pausing though Not pulling back
Yeah ford flagging that those protests In canada now causing disruption to some Of their operations another supply chain Headache for a sector that sector in Particular that maybe doesn't need those Um let me ask you about fx markets we Don't talk about latin american markets Very much on this program for time time Zone reasons i suppose mark today we are Waiting for cpi and as we are waiting And things seem fairly quiet good time To reflect on some strength that we've Seen actually in emerging market fx Certainly in latin what's the story There for you Incredible gains we're seeing brazilian Real obviously the most important uh Economy in south america by size is Completely leading this about eight Percent returns year-to-date um and We're only in the second week of February against the u.s dollar part of That is of the yield return and they are Massively ahead of the hiking cycle and I think that's the point i think this Might be a good year for the brazilian Rail it's very very discounted after a Number of years of underperformance Everyone knows the political risk it is Priced in now they have very very high Real yields in a world of negative real Yields they're ahead in the hiking cycle I think that overall the brazilian rail Can continue to lead in a world of
Higher yields Okay a conversation we then should Return to remember you can get Up-to-date analysis and insight from Mark and the rest of the market's live Team mliv go that is the function to use On your terminal
