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00:00CAROLINE: FROM BLOOMBERG'S WORLD HEADQUARTERS IN NEW YORK AND IN LONDON, I'M CAROLINE HYDE. TAYLOR: LET'S GET YOU -- JOE: THE QUESTION IS, WOULD YOU MISS -- WHAT'D YOU MISS? CAROLINE: TECH SELLING OFF, COMMODITIES RALLYING, AS LONG AS INVESTORS ARE PRICING STRONGER GROWTH IN THE GLOBAL ECONOMY AS HE RECOVERS, THERE ARE RISKY ASSETS. INCLUDING BRAZIL, EMERGING MARKETS. AND OF COURSE, BRAZIL IS LEADING GLOBAL DECLINES AS A MOVE TO REPLACE'S CEO. JOE, TALK TO US ABOUT WHAT IS HAPPENING AGAIN AND AGAIN IN THE MARKET WHEN IT COMES TO ATTACK. JOE: YEAH, INTERESTING DAY TODAY. YOU REALLY SEE HOW MUCH WORSE IT IS FOR THE , ROMAINE: THE CONTRARY AN ARGUMENT WOULD BE THAT THAT GROWTH RATE WE GOT USED TO HOLDS UP. JOE: CUTS IN MULTIPLE WAYS. JOINING US NOW, BRIAN, THANKS SO MUCH FOR JOINING US. IT'S GETTING KIND OF INTERESTING WITH THE LONG AND MOVE TO SOME OF THE THINGS WE HAVE BEEN SPECULATING ABOUT IN THE LONG END. TECH COMING INTO FOCUS. WHAT IS CATCHING YOUR I RIGHT NOW? >> THERE IS AN INTERESTING BACK-AND-FORTH TODAY, I WOKE UP AND IT SEEMED LIKE HE WERE GOING TO ROCKET HIGHER. IT APPEARS THEY MOVED A LITTLE BIT AND THEN ENDED UP AT THE END OF THE DAY TOWARDS THE HIGHS. SO YOU HAVE A 10 YEAR YIELD THAT IS NOT BAD, -80 BASIS, OBVIOUSLY A 30 YEAR. IT IS MAY BE THAT YEARLINGS ARE GOING TO BE NEGATIVE, I THINK THAT IS WHAT MARKETS ARE TRYING TO GRAPPLE WITH. RATES ARE DEFINITELY IN THE SPOTLIGHT. CAROLINE: RAZOR IN THE SPOTLIGHT IN THE U.S. BUT I WAS BLOWN AWAY WITH HOW MUCH THEY MOVED OVERNIGHT IN NEW ZEALAND, AUSTRALIA. OF LATE, IT HAS BEEN ALMOST GUILT SO MUCH HIGHER IN THE MARKET. THIS IS A GLOBAL STORY, RIGHT? >> THAT IT WAS INTERESTING TO SEE ON THE MCP CLOSER MONITORING YIELDS, OBVIOUSLY, JAY POWELL IS SPEAKING IN THE NEXT FEW DAYS IN CONGRESS. PEOPLE WONDERING IF YOU GOING TO SAY SOMETHING ALONG THOSE SAME LINES. SO FAR, THEY HAVE NOT EXPRESSED CONCERN ABOUT RISE IN YIELDS. I THINK THAT IS BECAUSE THE FRONT END HAS BEEN BEHAVED SO FAR. IT HASN'T BEEN A MAJOR CHANGE, PEOPLE ARE SAYING TO BE 2023 NOW. THAT IS STILL FAR ENOUGH THE YOU START TALKING ABOUT 2022 FOR RATE HIKE. ROMAINE: I'M CURIOUS ABOUT WHAT YOU THINK OF THE PRICING WE ARE SEEING, THE IDEA OF TRADERS PRICING WHAT THEY THINK THE FED MIGHT DO ON ITS OWN IN A VACUUM BUT ALSO HOW FISCAL POLICY HOLDS. AND WHETHER THAT MIGHT BE A LITTLE EARLIER. >> I THINK THE IDEA THAT THE MARKET IS GOING TO FORCE THE FED TO DO ANYTHING, I THINK THE MARKET HAS LEARNED TIME AND AGAIN THAT YOU DON'T FIGHT THE FED. THE FED'S FUNCTION IS CLEAR, THERE IS SUBSTANTIAL PROGRESS BEFORE YOU START TAPERING BOND PURPOSES. THAT HAS TO HAVE START HAPPENING BEFORE YOU RAISE RATES. THERE IS A LONG WAY TO GO, SO FAR PEOPLE ARE NOT TESTING THAT. I THINK, GENERALLY, THE FISCAL POLICY COMBINED WITH MONETARY POLICY AND REFLATIONARY TRADE IS IN FULL FORCE EVEN THOUGH YOU WILL SEE AT THE END OF THIS WEEK A NUMBER COMING OUT AT 1.4 PERCENT. STILL A WAYS TO GO ON THE INFLATION FRONT. JOE: SO FAR, BIG PICTURE AND WHAT YOU ARE SEEING IN THE MARKET, THERE IS NOTHING THAT WOULD MAKE THE FED UNCOMFORTABLE FROM YOUR PERSPECTIVE? >> I AM SO. I THINK CONTROL, TALK OF THAT, THING, THAT IS ABOUT CONTROLLING THE SHORT TO MEDIUM-TERM PATH OF INTEREST RATES. IN THE FED DOES NOT WANT TO BE PUSHED INTO TRYING TO TIGHTEN REPORTS. SO, I THINK NOTHING HAS HAPPENED YET TO MAKE THEM QUESTION. YOU SEE AN INTERESTING THING TO PAY ATTENTION TO, BASIS CLAIMS A LITTLE BIT PAST THE DOT PLOT PROJECTORS. MAYBE THERE IS SOME VARIABILITY TO THE IDEA IN 2024, 2025 THEY MAY HAVE TO HIKE. BUT WE ARE STILL A WAYS OUT. STILL LEFT TO SEE WHAT HAPPENS WITH THE ECONOMY. CAROLINE: WE TALK ABOUT PENT-UP DEMAND, I AM LOOKING AT HEADLINES, HOLIDAY UP 630%, JUST ON THE NEWS OF BORIS JOHNSON TALKING ABOUT A ROADMAP TO OPENING UP THE COUNTRY. THE NEWS WE SEE FROM THE REOPENING TRADE, IS THERE. BUT WE COULD TALK ABOUT GOOD INFLATION. WHAT WOULD STRIKE YOU AT ANY POINT ABOUT INFLATION? >> I THINK YOUR PREVIOUS GUEST WAS TALKING ABOUT COMMODITIES AND A SUPER CYCLE, THINGS LIKE THAT. FOOD PRICES GO UP. THAT ULTIMATELY HURTS EVERYBODY. ORDINARY AMERICANS. IF YOU GO TO THE GROCERY STORE OR IF YOU GO OUT TO EAT, PRICES ARE GOING UP. THAT IS LESS MONEY YOU HAVE TO SPEND ELSEWHERE. I DON'T THINK THAT IS THE GREATEST INFLATION, I THINK THE BEST INFLATION IS A STEADY AND SUSTAINED INCREASE OF WAGES ESPECIALLY FOR LOWER INCOME INDIVIDUALS. IN ORDER TO ALLOW GREATER SPENDING POWER. CAROLINE: THAT'S THE ONE TO WATCH, GOOD VERSUS BAD INFLATION. SEMANTICS. BRIAN, GREAT TO HAVE YOU ON. WITH THAT, STICKING TO INFLATION TRADE, EMERGING MARKET BENEFITS AS OF LATE BUT CAME UP TODAY, THE BRAZILIAN PRESIDENT OUSTING THE HEAD OF THE STATE. SETTING THAT COMPANIES -- SENDING THAT COUNTRIES MARKET PLUNGING TO EARLY DAYS OF THE PANDEMIC. WE HAVE THE LATEST NEXT. STAY WITH US ♪, THIS IS BLOOMBERG. ♪ ROMAINE: ALRIGHT JOE, ALL THIS TALK ABOUT THE TRADE, TALK ABOUT WHAT HAPPENED IN BRAZIL. TO BASICALLY INTERVENE . JOE: CHANGE IN MANAGEMENT, HONESTLY IS NOT JUST WHAT THIS IS BED -- WITH THIS HAS SAID ABOUT BRAZIL, EVERYTHING. CAROLINE: EVERYONE IS STILL WORRIED THIS ISN'T GOING TO END WITH THE OIL COMPANIES. JUST, WHAT IS THE NEXT STEP? JOE: JOINING US WITH THE LATEST IS BLOOMBERG EMERGING MARKETS EDITOR ALINA, THANKS FOR JOINING US. WHAT WAS IT ABOUT THIS VIEW? TO CATCH THE MARKETS FLAT-FOOTED? >> THINGS ARE HAVING ME. THE MARKETS REACTED VERY BADLY. THAT IS BECAUSE INTERVENTION HAS WELCOMED, WE HAVE SEEN THIS HAPPENED SEVERAL TIMES. THIS TIME IT WASN'T DIFFERENT. I THINK INTERVENTION ESPECIALLY BECAUSE IT CAME AFTER THE COMPANY, THE LAST TRUCKER TO -- THE GOVERNMENT WANTED TO AVOID. IT WAS ALSO A POPULIST MOVE. ALSO THE FACT THAT THE OTHER CEO WANTED TO MAKE POLICY CHANGES TRANSPARENT. REPLACING HIM WITH A FORMER GENERAL WOULD BE SEEN AS A SHIFT. ROMAINE: REPLACING EFFECTIVELY AND ECONOMIST AND A BUSINESSMAN WITH A GENERAL. I'M CURIOUS ABOUT WHY THOSE MARKETS SEEM TO BE SURPRISED BY THIS BECAUSE WE DID SEE AN INKLING THAT HE WAS HEADED DOWN THIS ROAD ALREADY. WAS THIS A BRIDGE TOO FAR? OR WAS THERE SOMETHING MORE HERE TO LOOK AT? >> I THINK HE TRIED SEVERAL TIMES TO DO THINGS THAT WOULD BE SEEN AS INVENTIVE. BUT, MOST OF THE TIME HE ENDED UP NOT DELIVERING. THIS TIME, IT HAPPENED AND SOURCES CLOSE THE GOVERNMENT IN BRAZIL WERE SURPRISED BY THE MOVE. IT'S A BIG THING BECAUSE, LIKE I SAID, HIS POPULARITY IS WANING. THIS IS BAD NEWS FOR A COUNTRY THAT NEEDS TO APPROVE MARKET POLICIES FOR A SUSTAINABLE CAP. THE FEARS THE GOVERNMENT WILL [INDISCERNIBLE] TRADE REFORM. CAROLINE: THE ECONOMIC MINISTER HAS NOT MENTIONED AT WHAT HAS BEEN HAPPENING. WHY WAS THIS SUCH A RIPPLE EFFECT ACROSS THE BRAZILIAN MARKET? >> I THINK THERE IS ALSO FEAR THAT THERE WILL BE INTERVENTIONS , HE ALREADY SAID HE IS PREPARING FOR THE ADMINISTRATION THAT IS NOT WORKING. WE HAVE SOME INVESTORS TODAY SAYING THAT IF HE REALLY DOES THAT, THERE WILL BE BRAZIL'S ABILITY TO [INDISCERNIBLE] [INDISCERNIBLE] . OUR SOURCES SAY HE WILL TRY TO MINIMIZE CONCERNS BY OVERRULING MEASURES. THIS REMAINS TO BE SEEN. JOE: SO, POLITICALLY, OBVIOUSLY IS NOT GREAT TO HAVE THE CURRENCY TUMBLE AND THE STOCK MARKET TUMBLE. POLITICALLY, WHY DOES HE FEEL THE NEED THAT HIS CONSTITUENTS WANT TO HAVE HIM MAKE MOVES SUCH AS THIS? >> IT ALL CHECKS ON THE POPULARITY. AND NOW THEY ARE TRYING TO GET EVERYTHING BACK ON TRACK. THIS IS SOMETHING GENERALLY THAT WE ARE SEEING FEEL PLACES -- FUEL PRICES RISING AND INFLATION ACCELERATING. THESE ARE ALL THINGS THAT DIMINISH POPULARITY. ALSO THE FACT THAT THEY HAVE NOT DONE GREAT WITH VACCINATING THE POPULATION. IT IS ALL IN ATTEMPT TO IMPROVE THE POPULARITY AS WE APPROACH NEXT YEAR'S ELECTION. ROMAINE: OUR BLOOMBERG EMERGING MARKETS EDITOR GIVING US THE UPDATE ON BRAZIL. WE SOUGHT DROP TO THE LOWEST LEVELS GOING BACK TO THE MAY DEBACLE OF LAST YEAR. WE ALSO SAW THE COLOMBIAN PESO AND OTHER EMERGING MARKET CURRENCIES, TIED TO WHAT WE ARE SEEING HERE WITH TREASURY YIELDS. WE WILL TALK ABOUT THAT IN A MOMENT. THAT'S COMING UP NEXT, THIS IS BLOOMBERG. ♪ CAROLINE: TODAY WE ARE FOLLOWING FALLOUT OF THE REFLATION TRADE, IN PARTICULAR EMERGING MARKETS. JOE, WE SAW INDIVIDUAL MOVES AND A LOT OF IT COMES BACK TO THE COMMODITIES TRADE. JOE: SO MANY E.M.'S SENSITIVE TO THE COMMODITIES TRADE. LOOK AT COPPER, ABSOLUTELY ON A CHAIR. I LOVE THIS RATIO IN THE WHITE LINE, COPPER, AS YOU DO STUFF WITH IT AND GOLD YOU DON'T DO ANYTHING, YOU SAID ABOUT IT AND TALK ABOUT IT LIKE ROMAINE DOES. [LAUGHTER] BUT YOU SEE COPPER JUST CRUSHING GOLD IN THE SPIRIT OF REFLATION. I'M SORRY THIS IS PAINFUL TO LOOK AT, ISN'T IT. ROMAINE: YEAH. [LAUGHTER] JOE: JOINING US WITH MORE INSIGHT ON THIS IS EMERGING MARKET STRATEGIST EMILY WHITE. WHEN I THINK COPPER, I THINK CHILL A. COPPER IS SURGING, THE CHILEAN CURRENCY ALSO WANT TO TEAR. JULY DOING WELL WITH THE VACCINE ROLLOUT. HOW SHOULD THERE ECONOMY HUMMING THINGS TO THIS ECONOMY WE ARE -- THIS COPPER BOOM WE ARE SEEING? >> COPPER HAS BEEN A BIG OUTLOOK THIS MONTH. TIED FOR THE REFLATION STORY, ON TOP OF THAT YOU MENTION CHILL A HAS HAD A GOOD VACCINE ROLLOUT SO FAR. NOT JUST GOOD COMPARED TO THE EMERGING MARKET COUNTRIES BUT GOOD COMPARED TO DEVELOPED COUNTRIES. THEY ARE NINTH IN THE WORLD IN TERMS OF VACCINE PER 100 PEOPLE. THEY ARE ALSO STANDING OUT AS A COUNTRY THAT HAS A LOW DEATH LOAN, SO ADDITIONALLY MORE ROOM TO STIMULATE. CAROLINE: THE LOW DEBT LOAD, AS WE SPEAK TO WHAT WE ARE SEEING GLOBALLY, WE HAVE SEEN TRADE TAKE OFF TO A CERTAIN DEGREE. WHERE IS IT GOING TO FAY WELL -- WHERE ELSE IS GOING TO FAREWELL LIKE CHILLING? >> IS GOING TO BE KEY TO WATCH, PARTICULARLY ON THE REAL YIELD SIDE. CERTAINLY WILL WE HAVE SEEN TODAY IS EMERGING MARKETS ARE GOING TO BE THE MOST SENSITIVE. AT FIRST, IT SEEMS LIKE WE WERE IN THIS SITUATION WHERE WE COULD HAVE A BETTER OUTLOOK AND STILL LOW YIELDS ON THE U.S.. NOW IT IS SITTING LIKE THERE IS GOING TO BE HIGHER YIELDS, THAT WILL END UP BENEFITING OR HURTING THE COMPANIES THAT HAVE HIGHER PRECIPITATION -- PARSIPPANY. LIKE MALAYSIA, SOUTH AFRICA. HAVE A DECENT FOREIGN POPULATION SHARE AND COULD BRING IT BACK. ROMAINE: TALK ABOUT WHAT IS HAPPENING IN THE CURRENCY STATES, IT SEEMED LIKE THE NARRATIVE FOR A WHILE WE HAD A TALK ABOUT COMMODITIES AND THE RISING YIELDS. WE SAW SOME OF THOSE TRADES LAST YEAR BREAKDOWN, AT LEAST THOSE THAT WERE TIED TO THE U.S. DOLLAR. WHAT IS THE FUNDING CURRENCY RIGHT NOW? >> THERE STILL IS A CARRY TRADE A PLAY BUT YIELDS ARE NOTABLY SOMEWHAT LOWER. EVEN MEXICO IS HAVING SOME OF THE HIGHEST TRADING STILL AVAILABLE. A LOT OF THAT RATE ADVANTAGE HAS BEEN ERODED, YOU LOOK AT BRAZIL, 2%. AT THE SAME TIME YOU CAN JUSTIFY WHETHER THE FUNDAMENTALS IN VOLATILITY, UNFORTUNATELY THAT MEANT NOT AS MUCH. PARTICULARLY AGAINST THE DOLLAR. NOW WE ARE LOOKING AT IS RELATIVE VALUE, COUNTRY VERSUS COUNTRY IN COMPARISON A STOCKS. OR MY FUNDING AFTER THE JAPANESE YEN OR OTHER CURRENCIES. JOE: ONE OF THE STORIES OF THE LAST SEVERAL MONTHS, THERE IS A LOT OF CHINESE BUYING GOING ON ACROSS COMMODITIES, AGRICULTURAL COMMODITIES, RESTOCKING. HOW MUCH IS A LOT OF THIS DISCUSSION PREDICATED ON THE CONTINUATION TRENDS IN CHINA? AND WHAT ARE YOU WATCHING ON THE POLICY AND DOMESTIC ECONOMY NOW? >> THE CHINA POLICY HAS BEEN MEANINGFUL. NOTABLY, IT HAS NOT BEEN IS MEANINGFUL AS IT WAS AFTER THE GREAT FINANCIAL CRISIS OR IN 2015. CHINA PROVIDED POLICY ACCOMMODATION WHICH INVOLVED EMERGING-MARKET COMPLEX. I THINK OF CHINA AS STEPPING OFF THE GAS RATHER THAN PUTTING THE FOOT ON THE BRAKES. CERTAINLY, THEY ARE STARTING TO BECOME LESS ACCOMMODATING. PROVIDING LESS, MOSTLY BECAUSE THERE IS LESS NEEDED. THAT CERTAINLY STILL HOLDS TRUE. WITHOUT BEING SAID, I EXPECT AUTHORITIES TO START TAKING THE FOOT OFF THE GAS. CAROLINE: WE WERE TALKING TO OUR LEAD EDITOR IN EMERGING MARKETS ABOUT BRAZIL AND WHETHER THERE IS INVESTMENT OPPORTUNITY. >> WE ARE WATCHING BRAZIL CLOSELY. CERTAINLY THE DEVELOPMENT ON FRIDAY IS POSITIVE. THE MORE IMPORTANT THINGS TO WATCH MOVING FORWARD ARE REFLATION TRENDS THIS WEEK. WHICH GIVE DIRECTION ON HOW MUCH CENTRAL BANKS WERE HYPED AND BY HOW MUCH. -- WERE HIKED AND BY HOW MUCH. THAT IS CREDIBLY IMPORTANT. BEING ABLE TO OFFSET THAT WITH OTHER FISCAL MEASURES COULD END UP MEANING THAT MOST OF THE BAD NEWS IS ALREADY ON THE PRICE. ROMAINE: WRAP IT UP FOR US, FOR THOSE FOLKS, WE OBVIOUSLY TALK TO A LOT WHO ARE DEEP IN THIS INDUSTRY ALREADY BUT THERE ARE FOLKS WHO ARE LOOKING TO DIVERSIFY BEYOND THE DEVELOPED MARKETS, PARTICULARLY NOW WITH THE CURRENT MOBILE ECONOMIC CYCLE WE ARE IN. WHAT IS THE GENERAL VIEW THAT YOU SEE WITHOUT APPROACH OF THIS DAY? >> WE ARE CAUTIOUS ABOUT EMERGING MARKETS. IT STILL BENDS OUT -- STILL STANDS OUT AS ONE OF THE BETTER PLACES THE REST OF THIS YEAR. THAT BEING SAID, THERE IS AN IDIOSYNCRATIC SING -- VIA SYNCRETIC SECURITY. COUNTRIES LIKE RUSSIA, COLUMBIA, CHILLY, THEY HAVE THE CONNECTION TO THE BIGGEST REFLATION TRADE WE ARE SEEING IN THE COMMODITY SPACE. BUT MAYBE BEING A BIT MORE CAUTIOUS WITH PLACES LIKE BRAZIL, WAITING FOR SOME OF THE DOMESTIC ISSUES TO WORK THEMSELVES OUT. JOE: FINALLY, AND REALLY QUICKLY, U.S. POLICY AND TERMS OF NOT JUST THIS CURRENT STIMULUS BUT PERHAPS A BIGGER BUILD BACK BETTER PLAN WILL HAPPEN LATER THIS YEAR, HOW MUCH DOES THAT, IN THEORY IMPLY ACROSS THE EMS YOU WATCH? >> IT PROVIDES THAT ADDITIONAL IMPULSE. THE KEY IS MAKING SURE IT IS A GLOBAL GROWTH RECOVERY AND NOT JUST A GROWTH RECOVERY IN THE U.S. OR CHINA. WHICH WE HAVE SEEN IN DIFFERENT FORMS CAN LEAD TO VARYING PERFORMANCE. HOLDING ONTO THAT SPENDING AND INFRASTRUCTURE WOULD CERTAINLY BE A POSITIVE. CAROLINE: WE THANK YOU. SO GREAT TO GET PERSPECTIVE FROM YOU. KEEP IN MIND THE TALK OF THE VACCINATION PROCESS DOING WELL AND CHILLY, WE ARE TO -- WE ARE CURRENTLY LOOKING AT U.S. DEBTS FROM COVID-19 SURPASSING 500,000. STILL SO MUCH EVIDENCE OF WHAT THIS WORLD HAS BEEN THROUGH, WITH THE U.S. IS BEEN THROUGH, ON A DAY WHERE WE SEE AND SEE OPENING UP, I'M LOOKING AT EASYJET GOING TO A 630% INCREASE IN BOOKING. JOE: WE ARE SEEING ONGOING IMPROVEMENTS. I THINK I SAW 40 STRAIGHT DAYS OF DECLINING HOSPITALIZATION IN THE U.S.. SO, IT WOULD REALLY BE GREAT IF THIS WERE THE TALE OF THE FINAL WAVE. ROMAINE: SOME PRETTY DECENT DATA OUT OF STUDIES ON THE EFFICACY OF THE VACCINE. SOME HOPE TO OFFSET THE MAJOR LOSSES BUT HOPE MOVING FORWARD. CAROLINE: COULD KNOW TO LEAVE IT, THAT IS ALL FOR WHAT'D YOU MISS.

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'What'd You Miss?' Full Show (02/22/2021)

Caroline Hyde, Romaine Bostick & Joe Weisenthal bring the news and analysis you may have missed after the closing bell on Wall Street. Today's show tackles the rates selloff and the latest on EM. Guest Today: Emily Weis of State Street. (Source: Bloomberg)

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