Let's get back to Harold von der Linda from HSBC. Harold, you were cut off there. I want you to continue with your train of thought. Yeah, thanks a lot, we get cut off. Yes, So what is important for the Asian equity market is the outlook for inflation in the US. And these are just signs people have always stopped. They couldn't get their products, say six months ago, they needed to make sure that they had stuck up in inventory.
Now demands maybe a little bit weaker than anticipated, and they're cutting prices and that's yeah, that means that maybe the inflationary story is is is a little bit on his back lacks yet, So let's see how that impacts over inflation numbers. But that is important for US in Asia because lower inflation in lower bonds uts and lower bund juts, that's good for Asian equities. Very quickly, Harold, what does it tell us about the consumer twenty seconds?
What does it tell us about the consumer in twenty seconds is that the outlook maybe for consumption demand is
not as strong as what we anticipate. And this is important for Asians well because we help, of course a whole bunch of exporters in the region, particularly in Korea and Taiwan tech exporters, and yeah, maybe the outlook for them is a little bit we we've already seen that, which is in that particular secrecy earning being cut in that monthly sales momentum that comes through in Taiwan being quite weak guidance from company. And Harold, you did mention
when we were speaking earlier about opportunities in Asia. I know, Asia Tech, you identify some very attractive pe ratios. At the moment, are you adding to your positions then no, not yet. The evaluations are low for that sector. Asia Tech is down on something like third excent. But the problem is to sell through. I mean, you guys just spoke about Lamart the discounting products. Uh, the demands might be weaker in for for that products, So that's going to be a bit of an issue. So you're gonna
be highly selected in that sector, I think. And Brian highlighted the fact that second quarter GDP and South Korea much above forecast, nearly double what economists were expecting, a gain of seven ns of one percent. It looks like spending not only from households but the government as well, helped to turn things around. I mean, do you have any reaction to this? Yeah, I mean that's good for Korea.
I mean, I think part of it is also post co fee a little bit kind of a church from his activity comes back most to post code in South Korea. But for the bigger tech companies in in Korea, that is not overly relevant, to be honest, because it takes so most of the products in Europe and in the US, So it's what happens in those markets that's that's sort
of really important to them. Yeah, we do talk a lot about recession risk, mostly though pertaining to the US and and knock on risks for the rest of the world. But but what about that risk when viewed through the Asia Pacific lens. You know, we we just didn't have that decent GDP read out of South Korea. Are the probabilities different for this part of the world. Yeah, I think an age the inflation store is a bit different.
It's a bit more mixed, to be honest. We have, on the one hand, probably deflation the precious and issues in in China. No, you're not mecessarily deflation, but the inflation. Inflation is basically not a big issue in in China because amount is weak and they're trying to actually move it and getting a little bit getting people to buy again and get confidence back again. Um. And then you have important food inflation in markets such as India and
in Indonesia. The good news is that rice prices haven't really increased that much and that some of the key commodity prices are oil, copper, but also reach de prices have come down, so that that helps the region a little bit. But we still have to deal in particularly that part of Asian institure with food inflation in the second half of the year. Well, you mentioned energy. Their crude oil prices today in New York were up quite a bit where rose more than two percent and stale.
We're fluctuating very near hundred dollars of barrel and w t I. At some point this is going to it. It hasn't already began to buy it across many economies in the APAC region. Yeah. Absolutely, And and the one that is most stiff to this is India. There is a large importer of oil and uh normally uh yeah, if other prices are above eighty dollars or so, and that it's well above it now. That's really a bit of an issue for for India. So there's more slow
India to a certain extent. And yeah, that means also you get that important inflation in in countries such as India. Um, so that's that's gonna be a bit of an issue. And we see already there that they want to typen in the needs. You might have to do this as well second half the year. That's more to related foot not so much as oil. But yeah, that means that in that part of Asia, the central banks might have to typen. And that's probably on the margin not so
good for those equity markets there. So what assets around the regional flashing a buy signal for you? Right now? I think the buy signals are very clear. I think in China, Um, it looks like things are turning slowly around in China. There are certain sectors where the outlook is starting to improve a little bit of the me from a very low base. So UM, I think another market people should be looking at this Thailand as as the world opens up again. Um, Thailand is going to
be better as a tourist destination. Tourist numbers have dropped off, like even if they come back a little bit, there's going to be quite a good impact for for for four Thai companies. So those are two markets I would really take a look at all right, Harold Vanderlynd, head of APEX Equity Strategy at HSBC, We will leave it there. Thanks so much for joining us on Bloomberg at Daybreak Asia