Israel Strikes Lebanon as US Prepares Fresh Iran Sanctions | The Asia Trade 8/17/2026

Watch on YouTube ↗  |  August 17, 2026 at 05:08  |  1:34:49  |  Bloomberg Markets
Speakers
Mark Cranfield — Cross Asset Strategist, Bloomberg
Anthony Stevens — Bloomberg Market Producer
Ruth — Bloomberg Asia FX Correspondent
Nandalal Weerasinghe — Governor, Central Bank of Sri Lanka
James Halse — CEO and CIO, Senjin Capital
Homin Lee — Senior Macro Strategist, Lombard Odier
Wendy Benjaminson — Senior Editor, Bloomberg
Min Min Low — China Correspondent, Bloomberg
Paul Jackson — Head of Crypto, Blockworks

Summary

The episode covers Asian market opens amid Middle East tensions, expected weak China data, soft Japan GDP, and strong AI/tech risk appetite. Strategists discuss US long-end bond weakness, yen carry trades, Japanese activism, and regional equity allocations. Bank of Japan rate hike timing and oil supply opacity are key macro risks.

  • US 20-year Treasury auction expected to struggle on sticky inflation, deficit, and weak long-end demand.
  • Middle East tensions continue with US preparing Iran sanctions and covert oil flows keeping prices in check.
  • China's July data is expected to show lackluster activity and weak private credit demand.
  • Japan's Q2 GDP grew 1.1% annualized, missing consensus and casting doubt on BOJ hike timing.
  • Yen carry trades remain crowded and profitable in low-volatility conditions.
  • Strategists favor Japan, South Korea, China hedge, and US software while staying pro-risk on Fed pause.
  • Sri Lanka's central bank governor pitches the country as a stable high-growth investment destination.
  • Japan activist investor sees deep value in small/mid-cap Japanese companies.
Ideas
Mark Cranfield Cross Asset Strategist, Bloomberg 2:11
Long-dated U.S. bonds face weak demand.
The US 20-year bond auction is likely to struggle because long-end yields are at multi-year highs, there is weak global appetite for long duration, the US budget deficit is over $400 billion and unsustainable, core inflation remains sticky, and investors are demanding a higher term premium.
US20Y HIGH
Anthony Stevens Bloomberg Market Producer 4:28
AI trade insulated from macro concerns.
Tech and AI capital is performing well and is insulated from broader macro concerns; 13F filings and private AI deals show capital pouring into tech, investors are leaning into AI and taking off everything else, and spreads/VIX are low with few tech risk gremlins.
AI/tech equities HIGH
Anthony Stevens Bloomberg Market Producer 5:27
China AI has idiosyncratic upside risk.
Within China, AI remains an idiosyncratic upside risk even as the rest of the economy weakens; export and AI growth is strong while credit, retail sales and broader growth are bad.
KWEB MED
Nandalal Weerasinghe Governor, Central Bank of Sri Lanka 30:29
Sri Lanka offers stable high-growth investment.
Sri Lanka offers an attractive investment opportunity now because growth has been around 5% for three consecutive years, the currency is stable, credit growth is manageable, and the economy is moving to high growth; the IMF program is on track.
Sri Lankan equities MED
Ruth Bloomberg Asia FX Correspondent 33:29
Yen carry remains alive and profitable.
Yen carry trades remain alive and well despite intervention risk; positioning data shows investors are still net short about 60,000 contracts and keep borrowing yen to buy high-yielding assets. Selling yen against Brazilian real has returned 15% this year, and NOK/AUD carry returns are above 10%, with easy pickings as long as volatility stays low.
BRL HIGH
James Halse CEO and CIO, Senjin Capital 39:07
Japanese small caps are deeply undervalued.
Japanese shareholder activism opportunity is still early; he targets smaller Japanese companies where investors can effectively get the business for free due to massive discounts, legacy assets such as central Tokyo land carried at historical cost, and management not focused on shareholder value; activist returns are uncorrelated to the broad market.
Japanese small/mid-cap equities HIGH
Homin Lee Senior Macro Strategist, Lombard Odier 52:09
Overweight Japan equities in cyclical sectors.
He is overweight Japan because the broad market is well set for earnings, the global cyclical boom supports cyclicals with high operating leverage, and even if the BOJ raises rates slightly he does not expect major appreciation. Financials, industrials and materials are nicely positioned for the rest of the year and the AI theme.
Japanese industrials Japanese materials EWJ DXJ HIGH
Homin Lee Senior Macro Strategist, Lombard Odier 53:58
China tech stack cheap hedge exposure.
The US-China tech stack competition will not be resolved soon, but China's steady progress in technology and cheap offshore equity valuations below 11x make Chinese equities worth holding as a portfolio hedge; if the China ecosystem produces unexpected significant innovation or investment, investors benefit.
FXI MED
Homin Lee Senior Macro Strategist, Lombard Odier 54:35
US software sector performing well.
In the US, the hyperscaler cash flow and financing debate is not going away, but the software sector is performing well and he likes that sector.
IGV MED
Homin Lee Senior Macro Strategist, Lombard Odier 54:49
South Korea remains AI hardware bottleneck.
South Korea remains the bottleneck in the AI hardware and semiconductor supply chain, with dynamic pricing and volume; after retail investor activity came down, he thinks it is worth having South Korea as one of the preferred exposures in equity allocation.
EWY MED
Homin Lee Senior Macro Strategist, Lombard Odier 56:50
Fed pause supports risk assets grinding up.
If the Fed extends its pause, risk assets could continue to grind up for the remainder of the year, which is why he keeps a pro-risk tilt in portfolios despite Middle East and China risk factors.
Global risk assets MED
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This Bloomberg Markets video, published August 17, 2026, features Mark Cranfield, Anthony Stevens, Nandalal Weerasinghe, Ruth, James Halse, Homin Lee discussing US20Y, AI/tech equities, KWEB, Sri Lankan equities, BRL, Japanese small/mid-cap equities, Japanese industrials, Japanese materials, EWJ, DXJ, FXI, IGV, EWY, Global risk assets. 11 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Mark Cranfield, Anthony Stevens, Nandalal Weerasinghe, Ruth, James Halse, Homin Lee  · Tickers: US20Y, AI/tech equities, KWEB, Sri Lankan equities, BRL, Japanese small/mid-cap equities, Japanese industrials, Japanese materials, EWJ, DXJ, FXI, IGV, EWY, Global risk assets