Name: Stagflationary Data Will Hurt Risk Mood: 3-Minutes MLIV
Uploaded: 2026-02-09T08:32:14+00:00
Duration: 197 s

Speakers

Mark Cudmore — Executive Editor, Bloomberg Live / Macro Strategist

Summary

Mark Cudmore of Bloomberg MLIV discusses China's warning to banks about concentrated US Treasury exposure, Japan's post-election market reaction, and the upcoming US data week. He expects foreign Treasury diversification to push US yields higher, sees the Takaichi-led Japan reflation trade as sustainable across yen, JGBs, and Japanese stocks, and remains bullish on global stocks for the year. He warns, however, that this week's US jobs and inflation data may create a stagflationary impulse that weighs on risk assets.

China has warned banks about concentrated US Treasury exposure, a story Mark Cudmore expects to grow.
Cudmore sees global Treasury diversification and US indebtedness supporting higher US yields.
Japan's Takaichi election supermajority drove a strong Nikkei rally and volatile yen.
He views the yen's bearish trend as sustainable, especially on crosses, but tactically difficult due intervention risk.
He expects JGB yields to rise and Japanese stocks to remain supported by pro-growth policy.
Cudmore is bullish on the US and global economy and on global stocks for the year.
He warns this week's US data could deliver a stagflationary impulse that makes risk assets tough.

Ideas

Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 0:11

Foreign Treasury diversification pushes US yields higher.

China has warned banks to trim concentrated Treasury exposure. Mark Cudmore sees this as part of a growing theme: the world owns too much US debt, the US government is heavily indebted and funded by foreign capital, and current US international policies are making foreign holders nervous, as shown by reports of a Danish pension fund reducing Treasury exposure. This can create a game-theory dynamic where no one wants to be left holding the bag, so he expects US yields to continue drifting higher.

Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 1:52

Yen bearish trend sustainable under Takaichi.

Takaichi's supermajority allows the government to override upper-house vetoes, so people may be underestimating how far the Takaichi reflation trade can go. He thinks the yen's six-year bearish trend is now sustainable over the next couple of years, though it is tactically difficult because of intervention risk and is better expressed on yen crosses than versus the dollar.

Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 2:14

JGB yields have further to rise.

He expects JGB yields to move higher, supported by Takaichi's strong mandate and a pro-Japanese-economy policy stance from a very low base. This is part of the broader Japanese reflation trade he sees as sustainable.

Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 2:21

Takaichi policy supports Japanese stocks.

Takaichi's supermajority and pro-growth policies should continue to support Japanese stocks. He says the Japanese economy is being helped from a very low base, and all the Japanese trade themes seen over the past year remain sustainable.

Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 2:42

Bullish global stocks on positive fundamentals.

Cudmore is quite bullish on the US and global economy and on global stocks for the year. He argues the underlying fundamentals for risk assets are positive, even if near-term pricing is stretched.

Stagflationary Data Will Hurt Risk Mood: 3-Minutes MLIV

Summary

Ideas

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