Starmer's Make-or-Break Speech, Hormuz Strait Stalemate | The Opening Trade 5/11/2026

Watch on YouTube ↗ | May 11, 2026 at 11:37 | 1:35:45 | Bloomberg Markets

Speakers

Mark Cudmore — Executive Editor, Bloomberg Live / Macro Strategist

Haig Bathgate — CEO, Kalanick Capital

Laureline — Fixed Income Strategist, Pictet Wealth Management

Emily Ashford — Head of Energy Research, Standard Chartered

Summary

The video covers Monday market open with focus on Iran stalemate after Trump rejects Iran's proposal, oil prices rising 4%, and gilt market nerves amid UK political crisis. The KOSPI continues its AI-driven rally, while bond yields rise on inflation fears. Guests discuss positioning: long short-term bonds and investment grade credit, avoid long-duration and UK gilts, and favor Microsoft and KOSPI for AI exposure.

Iran-US peace talks fail; oil (Brent) back above $105.
KOSPI rallies another ~4% on AI trade; Mark Cudmore says it's cheap on forward earnings.
UK PM Starmer gives make-or-break speech; gilt market nervous with highest term premium.
Trump-Xi summit confirmed for Thursday; low expectations for breakthrough on Iran.
Saudi Aramco CEO warns oil market disruption could last into 2027 if Strait remains closed.
Laureline (Pictet) favors short-end bonds and IG credit, underweight duration.
Haig Bathgate (Kalanick Capital) likes Microsoft, inflation-linked bonds, avoids UK gilts.
Haig Bathgate also warns of fiscal risk from potential left-leaning UK government.

Trade Ideas

Laureline Fixed Income Strategist, Pictet Wealth Management 27:15

Short end safe due to priced hikes.

At the short end of the curve, a lot of rate hikes are already priced in (50bp by ECB and BOE, markets moving from cuts to potential Fed hike). This reduces duration risk and makes short-dated government bonds relatively attractive in a volatile fixed-income environment.

Laureline Fixed Income Strategist, Pictet Wealth Management 30:40

Uncomfortable with duration risk.

We model the term premium for all major bond markets and see that the UK 10-year term premium is the highest at around 2%, driven by political uncertainty. The absolute yield may look attractive, but the political premium is unforecastable and we feel uncomfortable with duration risk; we want to stay underweight duration.

Laureline Fixed Income Strategist, Pictet Wealth Management 31:20

Preferred within fixed income allocation.

Within the fixed income pocket we overweight investment grade corporate bonds, as spreads remain stable despite heavy issuance from hyperscalers and the asset class offers a balance of yield and safety in a multi-asset portfolio that is underweight fixed income overall.

Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 39:16

Earnings growth makes KOSPI cheaper.

The KOSPI has risen 230% since April last year, but on a forward earnings basis it is near its cheapest in history because earnings growth has been even more dramatic than price gains. This is an AI bubble in the inflation stage, and until the AI trade collapses, all dips should be bought. The market is in a golden era of bullishness around the AI trade, and volatility from events like the Trump-Xi summit or Iran should be bought into.

Haig Bathgate CEO, Kalanick Capital 52:53

Lower political risk and strong cash flow.

Microsoft has lower political risk under a potential Democratic-leaning government compared to some other tech names, it produces a lot of cash, and its forward PE has compressed to around 24 because earnings keep beating expectations. This makes it a relatively safe way to play the AI theme.

Haig Bathgate CEO, Kalanick Capital 53:36

Hedge against prolonged energy shock.

In inflation-linked bonds are the best insurance against a prolonged energy shock from the Strait of Hormuz closure. They hedge against sustained commodity price increases and the associated inflation risk.

Haig Bathgate CEO, Kalanick Capital 59:31

UK fiscal risk outweighs yield potential.

UK long-term gilts face significant fiscal risk: 25% of outstanding debt is index-linked so servicing costs rise with inflation, the fiscal position was weak entering this crisis, and a potential left-leaning government (if Starmer is replaced) could increase spending and redistribution. The term premium driven by politics makes the risk far outweigh any return.

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This Bloomberg Markets video, published May 11, 2026, features Laureline, Mark Cudmore, Haig Bathgate discussing SHY, Long-duration government bonds, LQD, EWY, MSFT, TIP, UK gilts (long end). 7 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Laureline, Mark Cudmore, Haig Bathgate · Tickers: SHY, Long-duration government bonds, LQD, EWY, MSFT, TIP, UK gilts (long end)