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Well, the fed need to do more for longer. Hi, everyone. Welcome to the real vision daily briefing with us today is Diego Perea, portfolio manager at quadriga asset managers. Hi, Diego. Nice to see you.

Hi, Maggie. Thank you for having me.

So it's a fantastic time to catch up with you given all of the sort of macro things that are going on in the market so many different asset classes having influence on each other.

And I think we saw a lot of nervousness in the markets today. I mean, it's been kind of a volatile week, but we saw a lot of nervousness today as we wait for that big payroll number out in the US tomorrow, Friday morning.

A lot of concern about what that's going to mean for Fed policy. How are you thinking about this market environment right now? Where's your focus?

Well, I guess one of the biggest themes is what I would define as monetary divergence.

We basically have central banks around the world taking quite different paths and I would probably break it down in three groups.

One is the parallel reserve, which is basically pushing ahead with the hikes.

Everyone is behind the curve, but the Fed is the one that is leading the charge.

They have to do it. They can do it. They are doing it and they will do it until something breaks. And I think at the speed and size in which things are happening things are bound to break either domestically or externally to dollar debt, etc.

The second group, I would say, are central banks like the ECB that are in a way hiking and easing at the same time. So they're reluctantly hiking rates.

Well, from negative nominal yields, which was a massive mistake that I think they finally acknowledged to at least positive yields.

As you notice, at the same time as they were hiking, they can't afford for yields to go and peripheral bonds like Spain or Italy to blow up.

So they're in effect, putting together a program that it's the fact of yield curve control. So they are in a way put in the break in the, you know, trying to hike rates at the same time, ready to ease aggressively.

I think there's a third group, people like China that are, in my opinion, in deep trouble and actually easing. So this monetary divergence is very meaningful. It has a big impact on the dollar. It has a big impact on on exchange rates, how inflation has been exported in a way.

Like previous currency wars, where it was all about, you know, bigger diner and, and in a way, again, in competitive advantage this time around the defense is much more comfortable and happier with a strong dollar as they are kind of passing the problem.

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