Surveillance: Saudi Oil Supply With Tchilinguirian

the weekend. Sari A Ramco losing about five point seven million barrels per day of output after ten unmanned error vehicles struck the world's biggest crude processing facility as well as the Kingdom's second largest oil field. I'm pleased to say that joining us on the phone, Harry Chill and Garian joined us now BMP parabas head of Commodity market Strategy. Great to have you with us, Harry. Let me begin

with the first and obvious question. How long will it take a Ramco to bring disrupted production back on line? It's a consequence how long can Saudi tap inventories without disrupting flows to customers. I think that's a really difficult question. Right now. We don't have yet a status report in

terms of damage, in particular at the Upcake refinery. As you know, Aramco announced on Sunday that it should produce such a report within forty eight hours, So I guess we're gonna have to wait and see what the level of damage is. UH. Certainly Saudi Arabia, in terms of its commitments to its customers, will be able to keep supplying the market and as storage at its main all terminals like RUSTLANDEUF has pre position oil all across the world, from Europe to Asia, UH to the to the US market.

So I think that they could easily go a month in terms of meeting their commitments. But really the key issue is the level of damage and Upcake because that processing facility is key to making marketable commercial crude for export to customers. We'll talk about the geopolitics in just a moment, Harry, But the questions about the vulnerability of

a Ramco's infrastructure, I don't think it going anywhere, are they? Well, this recent attack really is an escalation in terms of the ability to reach Saudi oil infrastructure by in theory Houti rebels backed by Iran UH to tend strong drone attack, which obviously has not yet happened before the previous attacks by drones are in in comparison or relatively low level in terms of importance. So the question really here is whether or not these Houti rebels have the means to

replicate such attacks in the future. So, yes, we have an escalation in terms of geopolitical risk on oil supply, and the market is going to have to reprice that that risk premium. So Harry, let's talk about the geopolitics over the weekend. Secretary Pompey are very quick on Twitter to come out and say the Tayran is behind nearly a hundred attacks on Saudi Arabia, while Rahanigans a reef

pretend to engage in diplomacy. Amid all the calls for the escalation, Iran is now launched an presidented attack on the world energy supply. There is no evidence the attacks came from Yemen. The president has been very restraint compared to Secretary Pompeio. The presidents saying the following that Saudi Arabia's all supply was attacked. There is no reason to believe that we know. There is a reason to believe

that we know. The culprit rather are locked and loaded, dependent on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack and under what terms we would proceed. What do you make of the information vacuum over the weekend and into the beginning of the week carry well in

terms of like identifying culprits. Of course, the US was prompt to point a finger at Iran, but the President's communication has been, as you as you just mentioned, extremely reserved, not mentioning any names, because in the end, whatever conclusion they're going to reach, you're gonna have to think of what would be called a proportionate or measured response to the attack that that was committed. So I guess again

being extremely cautious in terms of warning. And however, you you always have this differences in communication, and you've highlighted them between the White House being a little bit more cautious than the the U S Secretary of State. Now

in terms of the geo politics. Was really interesting is the fact that this attack has really come shortly after the dismissal of John Bolton as National Security Advisor, and that had lifted I guess some hopes that the US may adopt a different strategy towards Iran, and even some speculating the President Trump's and Ronnie could meet at the UN Generally Assembly UH albeit informally. Of course, the oughts

of any such meeting now have changed greatly the recent attacks. Harry, we are thrilled to start our hour with you with b MP prry By. You've been around since with you, Harry, you were with John Rockefell or I think in the Pennsylvania mountains there a few years back, looking for the first barrel oil in Pennsylvania. It's not your well, it's not your father's oil crisis. Our dependency on oils less.

And as Greg Valier brilliantly says in his note this morning, the US is basically oil sufficient and with this attack China gets hammered. Do you agree with Mr Vllier? Well, I would. I would say that the US is not necessarily self sufficient, as a large surplus of light oil and a lot of its refineries are dependent on a

heavier quality of oil. So the US is, rather than being energy independent, is basically becoming a very large energy exporter, so rivaling in production the likes of Saudi and Russia and emerging onto its own in terms of UH uh AN exporting superpower. Now in terms of implications, of course, Uh, Saudi Areba supplies multiple countries, but the share of Saudi

crude imforce into the US has steadily declined. And yes, China and a number of other Asian countries a highly dependent on Middle Eastern oil coming through the vital passageway of the Strait of hormones. So I tend to say that, you know, Uh, in terms of relative impacts, of course the sheriff Saudi imports into the US as lesson. But

and however Asian countries themselves are far more exposed. Yes, some people might say we've been quite complacent about the geopolitical risk premium that should have been in the all market. Some people might still be saying that this morning we've had a rather big disruption to crude supplies, and that's an understatement, And yet crude is up by what eight nine in a grand scheme of things, Harry, I don't

think that's the move a lot of people expected. Well, I think you know, when it when it comes to the price reaction, we were going to get that knee jerk reaction that you mentioned earlier up on the Asian open because there's very little liquidity and number of people

were positioned to buy into into crude. However, as we get more reports, including from the likes of the Wall Street Journal, indicating that a third of production could swiftly return and that that is possible because production has been shut down on a precautionary basis as well. And it really just comes back down to what is a damn which assessment that up, because if the damage is modest, then we should see us for of Saudi supplies. Harry, Great,

We're all going to go back. Daniel, you'regens surprise here to get updated again. Mr Chilling gurry in with b MP Perry Bond has just given us a great perspective over the years. Chin Is, As we get to our esteemed guest, why don't you bring in Michael Dart in any number of ways to Twitter. I just want to

keep everyone up to speed on the news flow. First of all, we've got some reporting here at Bloomberg Sandy Window said to be less optimistic on speed of the output recovery crude with a little bit of a pop off the back of that now up ten percent. Just that headline. Tom goes to show you that the concern is a little bit beyond the speed of output recovery and towards the kind of geopolitical risk preming that we

should now be baking in. But for me, the top news overnight, if we did not have these attacks on a RAMCO weekend, would be the Chinese Economic Day. Talk about that. It was dreadful. Industrial production came in at four point full percent. It is the weakest single months since to Nazan and two and it really doesn't look good at sold. And in early September, Michael Darta Mcamp Partners wrote a pristine paragraph that is data acclaim on the vixcelient relative rate, is China gonna have a new

lower terminal rate? Is the United States and the rest of the developed world have a new lower terminal rate? Oh? Tom, I think there's no doubt about that. Their structural reasons that China is slowing down, obviously considering slower and lower population growth. And then on top of it, these trade shocks are certainly leaving a mark. I mean, you know, the trade wars hurting the US, hurting US manufacturing, but it's certainly damaged China more. And you can see that

in the data released today. I mean I mean John Joyce Chang last week of Morgan Stanley shocked with four and a half sent as their vector their target out there. No one believes Joyce Chang premier League. Shang was speaking to Russian media of the night, actually said it's going to be difficult to hit six percent. Just how difficult will it be, Mike to hit six percent? Yeah, I mean it's you know, it's a bit of an arbitrary number, but with data like what we're seeing today, it certainly

raises the question. I also look at some of the monetary growth trends in China. I mean, if you look at them, one in them to growth, these Milton Friedman indicators, they've been very, very weak. So maybe we shouldn't be completely startled that we're getting some fairly soft macro data out of China. The other thing is, you know, you've got the dollar levitating this year to you know, to President Trump's chagrin, and that tends to to hurt emerging markets.

It tends to be associated with emerging market equity and fixed income under performance and slowing emerging market growth rates. And so you know, we have that as part of the backdrop as well. All of this coming at a time where we've just had a massive back up and treachery yields yield last week up more than thirty basis points. Now, I'm going to ask you a question I've been asking everybody, and everyone wants the answer to this. I wish we had a crystal bowl to know what it would be.

But just how are you framing this right now? A correction in the context of a massive move through or the beginning of something new. I don't think this is the beginning of something new. I think what had happened is and especially if you look at that that last leg of the drop in the tenure yield from two percent, it was really associated with the trade war taking a sudden, an unexpected turn for the worse. And so I think

a combination of things have been lifting yields. One is that there maybe it's unfounded, but there is now a renewed sense of optimism that the trade war may ease, that President Trump maybe moving towards some kind of a deal, even if it's a minor deal. There were also fears of a hard brexit. Those fears have receded to some degree, uh in the macro data in the US while it's certainly not super robust, we're not falling off a cliff. And you saw that with retail sales this past week.

Everybody follows you, Michael Dard, going, great, why are we ner record highs on equities? I mean, how do you just flip the reciprocal on the new terminal value when it gives you higher equity valuations? I don't buy it. What's your conviction in the stock market? Well, I would, you know, take a more cautious stance on on equities here, just given the fact that we're pretty close to the highs of the year, and I still think there are

business cycle risks out there. So even with this reversal and yields that John mentioned, you still have the treasury yield curve inverted. This will be the seventeen consecutive week. You know, if if today's action continues throughout the balance of the week, where the ten year yield has been you know, has has been inverted visa VI the three month T bill. So ten year yields being below tea bills and a sustained fashion you know, has preceded every

recession going back to the ninet sixties. And so I do think there's certainly call for some caution here on risk assets. Would you make the argument, Mike, just to round things up, that maybe we got too pessimistic, that if you look at the global surprise indicators finally we turned positive in the last couple of weeks, that the estimates the forecast just got too pessimistic versus the reality of the actual day that was coming through. Yeah, I

think that's that's a totally reasonable argument. Um. I mentioned that big fall off from the two percent level and the tenure treasury yield just seem to be associated with a lot of pessimism centered around the trade war and in some of these other um global factors that enforces that have been creating a falling confidence. So if those reverse, you'd expect the bond yields to to reverse. The question is do we keep running up from here and yields?

And I'd be a little more skeptical cautious on that view. Michael Darted, thank you so much, greatly appreciated m came partners. Too much news, slow, too little time to talk. We'll get a a longer discussion. EIMR a can Oxford Institute for Energy. It is a spectacular twenty pages of dense, dense, dense microeconomics on how we come up with an oil

price That leads us to Ted Alden. Edward Alden's Failure to Adjust How Americans Got Left Behind was a superb book a number of years ago and still highly valuable to anybody interested in our trade world. And Ted Alden joins us from our Washington studios right now, Ted, I want to rip up the script here and talk not about the gloom of our failure to adjust. But we adjusted to oil. We had oil shock one oil shock too, and somehow America came out of this more independent on

hydrocarbon's how do we do it well? I may not be the best guy to ask that on the energy front, but we got right now. You not not fair enough, fair enough. But I think there is a general point which is one of the great strengths of the American economy over many decades now, is that it is highly adaptable. I mean, we adapted to the all shocks of the seventies. I mean I was pretty young then, but I remember quite well. I remember the gas lineups, and it was

a difficult transition, but we made it. We adjusted to the Japanese competition of the nineteen eighties and the nineteen nineties. We are a highly flexible, adaptable economy, but it but it takes effort. It actually takes both business and government and and some of the initiatives. I think we're gonna need to adapt to this generation of shocks we're not seeing come out, partly because of the dysfunction of our

political system. Right what's been amazing is the productivity story as well for US crewed it's been a technology story as much as technology been absolutely incredible tet and now there's a lot of people trying to figure out every time we have some kind of oil shock one way or the other, trying to figure out on net whether higher or lower oil prices is what's best for the

American economy. How on earth do you make that calculation? Well, I mean, I think if you look at the growth numbers, it's it's pretty clear that higher oil prices are harmful to the US economy. Pretauld be such a large oil producer now that on net it's a good thing. But your point is it's not as straightforward to calculation as it was to say in the seventies and eighties. Then

you know, Ohio, oil prices across the board were bad. Now, because we're such a large producer, it hurts the US economy less than it does other competitor economy, So it's a more difficult calculation, absolutely, no question. So what does it mean for policy going forward? Elizabeth Warren sent it to Warren coming out quite recently on her Twitter accounts saying she would band fracking everywhere's head, I mean, on

the service of things. It's a rather large statement, and no one has any idea whether she can actually do that. But what do you make of those kind of statements from the Democrats. Well, it's I mean, electorally, that's a challenging one, right, mean, fracking has helped a lot of economies, local economies around the country. There are obviously significant environmental issues. Again, I think that the history tends to suggest that those can be managed in a way that you don't have

a complete trade off between growth and environmental protection. I worry, and you know, again, as Tom and I was getting a little out of my areas here. But but you know, one of the things that happened in the seventies with the creation of ep A and other things, was that that you had a set of regulations go into place that allowed growth to proceed, but also focused on environmental protection where it really matters. I worry about the dismantling

of those things going on in the current administration. I don't think it's in either or. I think you can protect the environment and do the things that are necessary for strong growth. We welcome all of you on Bloomberg Surveillance. Edward Alden with US. He's with the Council on Foreign Relations.

His book Failure to Adjust. John Farrell and I are adjusting to more data checks, futures of negative eleven oil seventy two ish, the high was seven right down to sixty eight dollars a barrel, and Brent and then John, we got down here sixty five is should we've come back a little bit last our a little bit of a lift here off the President with a couple of tweets that I'd like to bring to you all just briefly,

right now, right here, right now. In China shrank most in three years due to China's big evaluation of their currency coupled with monetary stimulus. Federal Reserve not watching Will the Fed ever get into the game. The dollars strongest ever, really bad for export to no inflation, highest interest rates the United States because of the FED is paying a much higher rate than other competing countries. They can't believe how lucky they are that j Palal and the Fed

don't have a clue. And now on top of it all, they all here big interest rate drop stimulus is he listened to us because he knows we have old us. So Ted just talked to me about this because many people find it hard to reconcile the call for stimulus with the projection of the idea from this administration that this economy is totally fine and rock solid. Well, I mean, has there ever been of president who didn't want lower

interest rates going into his re election year? So most of them have not been quite so public about bashing the Federal reserve. But but this is something that presidents always want. I mean that the economy can never be too strong going into an election year. Trump's clearly not worried about overheating, and to be fair, there aren't a

lot of signs of overheating. Problem is the FED doesn't have a lot more ammunition, right, I mean it could a little faster, but but it's not a whole lot it can do to further boost the economy going into twenties. It's micro economics Monday. We've been doing that with oil and and it's been a joy. Let's do it with ted Alden now. And trade. Part of this is the

substitution effect. If we, as a president clearly in this tweet, suggests it's US and China, ted Alden is gonna say, no, it's not, and that there are indirect and direct leakages where the trade slips out of China to a dynamic with other countries. How evident, how pronounced is that subtitution affect Well, you're seeing it certainly in in Asia, particularly with the growth of exports from Vietnam. And you're seeing this administration now target Vietnam and say, oh, you know,

Vietnam's trade surplus with the United States is soaring. That's the problem we need to do something about. So so that's been the most significant kind of leakage we've seen already, but it will certainly grow if the if the trade war continues. In a lot of ways, we're still in the fairly early stages here because what's at stake is long term investment decisions by companies. Are they confident that they can continue to export from China to the United States.

If the answer is yes, they probably stay put. If not, they have to think about either relocating existing investments or where they make future investments. So so there's a very long tail on this. Yeah, it's gonna be interesting. I mean within that long tail and just simple immediate discussions of October. What's on Ted Alden's date calendar for October to indicate how this trade war unravels or how this

trade war moves forward. Well, you know, always hesitate to say that, you know, the next round of negotiations is the critical one, but I think the one coming up between the United States and China in October is critical. The last couple of efforts to restart the talks since they broke down and may have been catastrophic failures that

have resulted in further escalation. I think if there's going to be any sort of reasonably durable truce, it's going to have to happen at this October meeting and then maybe be cemented when Trump and Chinese President juja Paying meet at at a peck in Chile in November. So I think I'm clearly the markets are gonna be watching

this meeting very closely. They are hopeful now because of the gestures on each side, the Chinese deciding not to further raise tariffs on agriculture imports, the Trump delaying the next round of US figure so it's a big meeting. Clearly, it's slipping under the radar some really weak Chinese economic data, industrial output rising just four point four percent from a year earlier in August. A lot of people might say that sounds good for the rest of the world. It

might be, but for China it's not. It's the lowest for a single month since two thousand and two. Retail sales also coming in below expectations. We've got a fantastic guest to talk to us about it, Henry had A Trays, Vada Pander's director of Economic policy Research. Henry had to just your early reaction to that economic data from China overnight.

Thanks for having me. Yeah, I mean, as you mentioned, it's the worst number since two thousand of two, So obviously China is facing some pressure, and I think the Trump administration is watching that very closely. As we've discussed earlier. Um, you know, the administration feels very confident that this trade war is having a much more profound impact on China's economy, and the President she can't sustain this the way that President Trump. Do you you to that assessment? Do you

agree with that? I do not, And I more importantly don't see any of the indicators coming out of China in terms of the verbiage that either President She or any of his folks downstream are using against the United States. They're saying, look, this is what happens when foreign aggressors come in. You be the communist party to leave the country. We can fix it. We're the ones who will stand

up to the United States. And the economic nationalism that you see, um you know, most clearly identified in the Japan versus South Korea fights is something that I think they're stoking. Hey, let's get nationalistic support. Chinese companies don't buy a Ford, buy a Chinese manufacturing book car. And I think that's the direction they're which is not what

the Trump administration is trying to telegraph the folks here. So, Henrietta, when you look at the economy just away from the politics, what on depends a more constructive view of the Chinese economy right now. I think with the Chinese economy, you have one thing that's most important, and that's longevity. And that is a sense that they don't need to respond to, you know, the Iowa caucuses or a November two thousand twenty elections. They can plan for. They can plan for.

And if you look at how much money they're spending on R and D versus the United States, it's at least more than half. I think. I think it's double actually um, if not triple. So they're focusing on, you know, what's happening next. This is a near term blip that won't always be with us. We have manufacturing. Now, let's work on innovation. You know, they're already beyond this. Where

is the Navarro theme in the White House? I mean, if you you beautifully frame out the dynamics of China versus US, and we've had the reports of sub six percent GDP, etcetera, how does Dr Navarro fold into this and influencing a president who has his own policy, his discrete policy and trade. You know, that's an interesting question, and I really wish there was less of a focus on Peter Navarro as this sort of outlier in the administration.

USCR Lifetiser has created the nuclear bomb of these cairas he went through the section three of one investigation for a year and a half before he published it. He gave us all the tools of this trade um. President Trump has very long held that China is an aggressor and it's stealing our I p and I think that there are folks way downstream from that at the State Department at Defense UM and you can see that in the scifious work and treasury stuff that they're working on.

The State Department just last week rolled out a draft set of guidance for anyone using anything that has any kind of surveillance capabilities, whether intentional or not. If you can have an audio or a visual surveillance of any American in anything that you're developing, they want to crack down on and make sure it doesn't get exported. So I think it's a misread to think that this is one guy ship John wants to jump in here. But to be clear, here, you're saying Mr Leightheiser and Dr

Navir are much closer together than we think. Yes, absolutely, and a whole bunch of other folks at the administration.

I mean you can't. You can't say that only one guy believes this is true if the other guy is the one who's creating the legal framework for putting the tires on too, to substantiate the claim that you know Mr Navarro is making, and to some degree, that very same mistake was made last week when John Bolton left the White House and many people assumed that maybe we'd have a change of direction with Iran, and then you saw how quickly Secretary Pompeio was to tweet over the

weekend and blame the Iranians for what happened. Henrietta, what is your view on what happens next, just with regards to Iran going into the UN General Assembly over the next week. UM, well, there's definitely a lot of data gathering going on right now. I assume that you know, the Big eight on Capitol Hell have been briefed. They'll be Armed Services and for an affairs briefings. UM. Saudi Arabia will have to clarify exactly how much has been

clamped down on UM. The Iranian meeting seems pretty clear from Iran side anyway is not going to happen with President Trump. So I guess we sort of have to take his word for that at the moment. But a week, as you all know in d C, is a very long time and they don't really even get to work till tomorrow. So I expect it to be quite a

few changes. But I am what sink closely to see how China and Iran interact, whether China UM has any kind of data points about oil shipments from Iran, UM, whether the United States is being interested in pursuing secondary sanctions. I think there's a lot of potential. I'm not necessarily guarantee a potential for the Iranian situation to believe into the China talks. Well, Henry I Sai, let's talk about that.

Just how do these two very different situations crossover. Well, because China has had, along with Russia and Iran, a much closer working relationship in the United States would like, and so when we talk with counsel and say, you know,

what are the issues we have with China. Of course we can go through IP enforced tech transfer and all that, but there's also the global presence component about whether or not the American sanctions are really working to the greatest extent possible, or whether some of the nation are trying to interact with them. So it's it's not a direct link, but it it's a mistake to think that the US

China tensions are only about UM many functuring. There about a whole bunch of humanitarian components as well, of which this could ultimately be one, and hearing about secondary sanctions comes up every once in a while with staff. Henry had one final question. This has been great. I just tweeted out and this has been wonderful, Henria Treys. Is Congress locked and loaded? I mean the president is locked

and loaded. Is Congress locked and loaded? You know, that's an interesting question kind of mine reached out last night and they were saying, you know, what does this mean for foreign arms sales? And we've seen that the Trump administration Yes, thank you Cone. Yeah, so we've seen that the Trump administration has specifically been really excited to talk about arms styles, as we saw with Saudi Arabia just

the last few months. Who the president can put a price tag on it, He can say, you know, we're reducing the trade deficit or whatever back of economic indicat to look at UM and senators have been very dismissive of that. And I think that this is a situation that is definitely short of locked and loaded, but could be an important Vinceir, particularly if there's sustained disruptions, and Saudi Arabia says, Yo, this is really bad. We have a real problem. It's going to take us months to

get this supply back online. Um, that could be a game changer. This is big enough to create a locked and loaded scenario, but that does not exist at this time. N Thank you so much, Hender, And the tray is just brilliant there in China currencies. You get a sense of kind of what's going on in the world of currencies. Who welcome Mark Chandler. Bonobob Burn, Global Foreks, Chief market strategist joins us here in our Bloomberg Interactive Broker studio. Mark,

thanks so much for being here. So again, you wake up this morning, you come in on a Monday morning, and you see oil of double digits across the world in terms of w T I and Brent, how does that impact kind of how you go about your week here thinking about currency and talking to your clients and

kind of how to be positioned. Sure, you know in the fun exchange market, are week really begins Sunday afternoons, so we saw what was happening as the Asian markets opened up, and I think that's one of the takeaways is that typically we get a very exaggerated response reaction

in Asia where we still have relatively thin markets. And I think that's when we saw that oil make the extreme and where dollar yen made an extreme, and I think the initial knee jerk reaction the FX market was to excuse me, was to buy the end as sort of a safe haven play and buy the currencies that are often seen as sensitive to oil, so that would be the Canadian dollar, Norway as well as the Russian ruble.

And that's what we've basically seen are the markets telling you when you when you look at those currencies that this might be a short term issue or there might be a little bit more going on here in terms of supply of oil. Yes, in the long run. You know what I really look at currencies. I tend to focus much more on the capital flows than the flow of goods, and oil is just to flow with the goods. Okay, this is what I really like about the FX market.

Five trillion dollars a day and over that means by Thursday, in a week four days, we need enough, we see enough turnover to cover world trade for a year. So typically I'll focus on monetary policy and those kind of things that attract capital rather than the goods trade. You're I'm new. The blue button is over there, the anthony from Sparta the same time, trying to get to it before you open said mouth. Had to take the cork

out of my mouth. Your wonderful book Political Economy of Tomorrow, about the astrology of all this one of the foundation astronomical realities. It's like Coperni Kuss is the dollars linked to oil? Really? Is that still true? Yeah? So I never was a will believe, big believe in this petro dollar type of scenario. I say, yeah, maybe in the

nineteen seventies it might have been an important part. But the thing that keeps a dollar as the key asset, key, reserve currency, key invoicing currency is the depth and beath of our treasury market and that bigger, deeper, more transparent than any other bond market. And that's what I think really is behind the dollar more than oil. Is there a dollar shortage out there? Explained to our audience when they see headlines in the blogosphere we're running out of dollars.

Dollars are short abroad will translate that. Yeah, So this is partly original sin in the in the in the markets, and that has when countries borrow currencies that aren't their own, they don't have the printing press for so, whether it's Chinese companies borrowing dollars, emerging markets borrowing dollars because it's cheaper to borrow dollars often than borrow their own currency.

That because of all this massive borrowing of dollars in the last several years, people think that the shortage, that is, those who borrow dollars have to pay them back, and so they think that there's a big shortage of dollars because these people have to pay them back. But I look at is some of the corporate some of the corporates as well as some of the country balance sheets. A country like Saudi Arabia, for example, as the issue

dollar bonds, well they have dollar receivables. Same thing with Brazil, same thing with Mexico. So I'd be looking when I think about this all a shortage issue, I'm gonna I'm gonna drill down and look at where is the real imbalanced. Who's got the natural dollars to pay back these loans. We're looking at the d X. Why the dollar in next at nine point five to today, up another third of one percent? Is there a bear case out there

for the U s Dollar anywhere? Yeah, So I'm really in the case in the camp that says that the dollar has been in a ten year bull market and that bull market is nearly over and maybe make a marginal new high. Maybe you don't, but that it's the process of a lower and extreme of the markets. Tends to be a process, and I think that process is already underweigh in the US just thinking about's going to happen later this week. The Federal Deserve is most likely

going to cut twenty five basis points. The ECB cut ten basis points last week and maybe cut ten basis points before the end of the year. Meanwhile, we'll probably cut at least fifty before the end of the year while they cut twenty. And so I'm looking at interest rate differentials moving against the US over time, and this is really important. This is absolute analysis versus what you know. Your acclaimed career Mark Chandler, which is a study of

relative analysis. This what is the relative shock of this oil tobacco for Saudi Arabia versus the shock that there would have been an OPEC uh in OPEC one or OPAC or on from there. I mean, it's a different calculus now, isn't it. I agree fully, And I think that one of the biggest changes in the last several years has been the US has emerged as a premier export of oil. And I think that was in June that the U s past Saudi Arabia and their exports.

Saudia's caught up in in July August, but we're gonna let us shore pass him again. I think that the US is not energy sufficient. We just we still are importing about six million barrels a day. But this hasn't been a big change in the rule of the dollar, the rule of the oil markets in general. We gotta leave their mark. Chandler, thank you so much for bannockburn uh this morning. Greatly. Thanks for listening to the Bloomberg

Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, Suncloud, whichever podcast platform you prefer. I'm on Twitter at Tom Keane Before the podcast. You can always catch us worldwide. I'm Bloomberg Radio