Gilts Have Global Relevance Right Now: 3-Minutes MLIV
Speakers
Mark Cudmore
— Executive Editor, Bloomberg Live / Macro Strategist
Summary
Mark Cudmore analyzes South Korea's market volatility after a misunderstood 'citizen dividend' statement, calling for dips to be bought and higher levels ahead. He also flags UK gilts as a potential short-term risk event with possible contagion, but sees no direct trade in gilts. Japan yen drama appears to have subsided after Scott Bessent's visit.
- South Korea Kospi fell 7.2% in 97 minutes on a tax misunderstanding, losing $300 billion in paper wealth.
- Cudmore expects all dips to be bought with no negative catalyst in sight, leading to higher levels.
- He warns of continued short-term volatility and big swings in Kospi.
- UK gilts could become a globally relevant risk event if they sell off further.
- Sterling may have more downside catch-up if gilt weakness worsens.
- Cudmore does not see attractive risk-reward in trading gilts directly.
- Japan yen volatility subsided after Scott Bessent's visit, removing one risk event.
- Focus shifts to upcoming Chinese risk events.
Trade Ideas
Kospi dips will be bought to higher levels.
Despite the sharp volatility in South Korea's Kospi from a misunderstood tax statement, the market will see dips bought and move to much higher levels because there is no genuine negative catalyst on the horizon. The selloff was a temporary panic, and the underlying bull market remains intact.
Up Next
This Bloomberg Markets video, published May 12, 2026, features Mark Cudmore discussing EWY. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: Mark Cudmore · Tickers: EWY