US Dollar Hedging: A Real Risk or Just a Narrative?

The macro trading floor. With me, Alfonso Piccadillo, founder of the Macro Compass, and former head of investments at a large European bank. And I am Brent Donnelly, president of Spectre Markets. I've been a portfolio manager, day trader, and market maker at the biggest commercial and investment banks in the United States. I'm also the author of Alpha Trader and the Art of Currency Trading. If you want to know what's going on in markets and where they're going, you found the right podcast. Hi, everybody and welcome back to the macro trading floor. As always, every week with you, Alfonso Piccadillo, and Brent Donnelly. And you should know this week that Brent is just back from a very spiritual endeavor. So I think Brent should talk for a few minutes about where were you? Sure. So I went to upstate New York and I went to this silent meditation retreat where you essentially sit in meditation halls called a Zendo, but it's basically like a church with no pews. So if you imagine a large stained glass windows and all that, but no pews, and then you sit on a cushion for eight hours a day pretty much with some exceptions, you eat food and stuff like that, but you're completely silent the whole time. You don't make eye contact with anyone the whole time. And I think it is just like, if you imagine, I don't know if people remember defragging hard drives back in the day where you could sometimes even watch the graphics of it rearranging. I felt like it was a bit like that for my brain, just it was extremely difficult physically and mentally very painful. I think some people have compared it to like running a marathon or whatever, but I'm really glad I did it. It's kind of like one of those things you're glad when it's over, but then you're glad that you did it. If you think he said they're massive guys, imagine eight hours sitting in the same place in position and not having eye contact with anyone, let alone speak to anyone, wow, wow, I'm really proud you made it, brand to be honest, I think I would have run away after an hour. Thank you. You know, it's funny that you say that because when they do the introductory remarks before the silence begins, they say the guy says, you are going to have a very strong urge to flee. Don't worry about it. Many, many people have done this. You will not injure yourself, you know, just the pain, the pain is real, but it's not dangerous. It's a, it's a very good statement. I can imagine me sitting there for an hour and my brain goes like, so should I now buy hankari or Japan or what should I do about bones? Well, you know, that was the really interesting thing was everything from outside of there just slowly disappears because you're in physical pain, there's, you're in a really deep state of, of crazy boredom as well. And everything just tent like over the first two days and then continues. It just zooms in more and more and more to the current experience and you kind of forget about the outside world. So I think that's kind of the power of it in a certain way. It's fine. We'll talk about markets, guys. Don't worry. That people needed to hear me first, we're so immersed in markets and business that, you know, an experience like this, I think would, would be important. I don't have any. Yeah. It was about to leave about it. Oh, sorry. I was about to say fun, but I don't think it's fun at all, but I think it's definitely not fun. Okay. So, Mark, people want to read about it. It's on the web, on Spectra markets, on the website and the library. It's free. Yeah. So people can go and read markets now. So let's see. What is for me the most important thing that happened this week? Oh, yeah, sure. We had a tariff threat and then a taco. Now, of course, exposed everybody can say, I told you that it was going to taco, but in the meantime, there were two days, Brent, where, wow, the April, May 2025 vibes were all over the place, I would say. So should we talk about your view of why was the market behaving like this? Do you think it has left some scars that are going to be a little bit more permanent this time or not? I mean, what's your take on the price action of the two days before the taco? Yeah. I think it's interesting, especially if you put it in the context of the past, I guess 12 to 13, 14 months since Trump was elected, in that the view generally was that tariffs are bullish dollar, Trump is very bullish dollar, Trump is bullish crypto. And all of those things have been false. And even though the April 2025 stuff, obviously, we bounce massively in stocks after that. Really, US stocks have performed poorly compared to almost everywhere else in the world. Like you have stock markets around the world up 50% and things like that because essentially what the market has done is said, okay, we're not really taking this too seriously, but we have to have a tail risk priced in for just complete insanity, you know, unhinged type of stuff like we saw this week. So that tail risk gets bigger and it gets smaller, but it's always there. So that's, to me, why the, you know, the dollar is still closer to the lows, like it's sold off 10% at the start of 2025 and sure it didn't keep going down. So like the crazy targets were wrong, but it didn't rally either. And I think that represents the fact that there's now this risk premium because people don't trust the United States as an ally. And it's like, it's kind of like the old China was uninvestable and then US was uninvestable. And neither one is true, but both have massive risk premiums in them now because they're not truly safe because you never really know what the government's going to do. And so then that means money's been flowing to other things like obviously precious metals being the, the place where you have no counterparty risk and sort of is like the ultimate hedge against, you know, seizure and bad policy and all that kind of stuff. I think Jared Dillion was the person I first heard from say gold is one divided by T where T is trust. And, you know, obviously nobody trusts the US government to enact, you know, or like not that nobody trusts the US government, but everyone has to have some, something priced in for, you know, just random madness. And so I think it's, there is a lot of scarring and I think it will continue, especially I think it's a bit of fool me once shame on me kind of thing. So I don't think this necessarily just, everything goes back to being better. I think we continue to see the dollar either does nothing or goes down. Those are kind of like the two paths and US equities under perform because people don't want to own, you know, equities that are potentially very highly valued in a, in a regime where the government is, you know, arbitrary price controls and things like that as we saw with the bank stocks. Yes. So for me, the most important thing of the price action of the two days is that the market is willing to show the middle finger to the Trump administration if they do policies that they don't like. And I think people let forgotten about this for a while because the market had not shown the thumb up to anything or everything that Trump had done brand, but at least they were not caring about him that much basically from, you can say from June, July onwards, let's stop listening to a lot of declarations without economic follow-up effectively. Right. And now this is very interesting because the moment he says, I'm threatening to use tariffs again as a tool, as an economic tool. The market reaction was a huge middle finger to owners of American assets. I mean, to everything, think of it like, so we had bond selling off and stocks down. So that is a tightening of financial conditions for Americans literally, you know, their wealth goes down and the financing conditions become tighter. So okay, then you had the dollar down, which means that the tariffs if enacted, brand would be even more inflationary for the US, right, because the dollar is weaker. So then you would have the tax part of the tariff on US consumers and corporates being even bigger through the vicious loop of a lower dollar. So three hours of financial conditions make the tax tightening through tariffs bigger through a weaker dollar, sell bonds, so financing is harder and sell equity. So the wealth effect is wiped out. Wow. That's for Americans. Now, think about the foreign owner, foreigner owning US assets, like a Canadian pension fund. So what happened to these guys? Okay. So they own stocks and went down. They own bonds. They went down. They didn't hedge the dollar. I mean, they have a large unhaged position in dollar, right? These guys also lost money there. And basically the market told anyone, just diversify, get out, you need to have a different asset allocation than the one you have now. This was the alarm bell, which of course lasted for a few days, then it occurred. So the real question here that I need to figure out with you is, what happens now? Is this just another blip in the, I published the chart in the research, which is an idea of a client of mine and it's very smart. It looks at the weekly returns of the euro and the SPY. In a simple regression, and what you want to see there, Brent, I think, to convince the asset allocators is that there needs to be more data points. Where on a weekly basis, the euro goes up and the SP goes down. If it happens once a year, twice a year, who cares? I think the persistency of the changing correlation is as important as the changing correlation itself. Yeah, I think that's super important for FX. And without getting like two boring and into the weeds, that's the biggest story in Australia is that they have a lot of unhedged US assets massive. But the correlation has always been that if stocks go down, Aussie goes down. So they're, you know, hedging is risky. But if stocks go down and Aussie goes up, then they need to be more hedged. And like you said, the thing is like, what's your look back as a hedger? Do you look back one year or two years, five years? But if you look back, you know, one week, obviously you'd say shit, man, we better be hedging more Aussie. And those numbers, you know, for the foreign hedging of US assets are absolutely massive. That's why people get so excited when these things happen is that the numbers are just absolutely ridiculous. And it's all kind of reflected in MSCI world being 72% USA like that is a pretty egregious number from any point of view. And yet almost all the passive money follows it. So it's, to me, I think it's interesting in that like as a short term trader, it's, it's one thing like obviously you got to jump in and, and get out when the talk goes fly. But for longer term investors, and I mean, you're seeing it. I'm not saying anything new. People are just diversifying out of the US for, for many reasons. And so like if you look at, I think this is something that it doesn't feel like this. But the reality is like mag seven hasn't made a new high since October. Most of like the really popular US equities haven't made a new high since October mag sevens unchanged in five months. And you know, obviously a lot of assets are ripping. So if your money is in the US right now, you're under performing really for the first time in a very long time. And the irony is it's only that under performance that will make people change their behavior. Because I remember, I think I talked about on the podcast, I can't remember, but I had dinner with a bunch of EU pension fund managers. I guess it was probably about five, six months ago right around when stocks were peaking. And I was saying like, why doesn't somebody take the action of saying like, you know, we're going to reduce, we're going to go to equal weight or GDP weight or, you know, at least reduce 72% US seems insane. And a couple of guys said, dude, plenty of people have done that and they all got fired because they underperformed. So now ironically or really this is part of why trend following works is as the US underperforms now, it will just become less. It'll feel less scary to be underweight US, you know, and obviously you need more time like you said, same thing with the correlation thing. But at some point, US underperforms for a year, which it already has, then it underperforms for two years, and then that the flood slowly begins. So I think it's a theme, it's a relative, a relevant theme. And it feeds into another theme that I want to talk about, but I'll just let you comment on that. No, look, the other thing I was going to mention brand is what you mentioned that in the article, I went and looked at if you own SPY or you own a bunch of other stock markets. And especially the stock markets, I picked where the ones where you have countries with a large capital net exporting position. So I'm talking about Europe, Sweden, Japan, Korea, countries basically have a current account surplus for as long as I can remember. And therefore also have a basically a positive NIIP, net international investment position. So they invest more in foreign assets, effectively. Right. And you look at this at this stock market's brand. For the last 12 months, they have crushed the S&P in dollar, because of course the position of most of these pension funds is that as we know, they buy the S&P and they don't hedge the dollar. So you'll return or they hedge very little. And you'll return they would therefore be, okay, let's take a look at the local domestic market in dollar to just, you know, compare the returns. When I look at one year rolling returns, they're getting crushed. And by European stocks, I mean, Korean stocks are just going to the moon. Okay, fine. But if you take European stocks, Japanese stocks, Swedish stocks, Canadian stocks, they're all doing better in dollars than the S&PY. If you look at the three-year horizon brand, that's not true yet. Right. So that's exactly basically what you were saying, right? You need, what is the pain threshold, as I call it in the article, like how long do you need to underperform to finally have your CIO and your board of directors say, yeah, you know what, guys. I mean, we should rotate a little bit. It probably takes longer than a year. That's my guess. Because in most cases, this is career risk, right? We're talking about people really making a decision that can impact their career and eat more evidence. But it's a very strange game theory problem, right, brand. The more evidence there is, the more you're underperforming, while being underallocated to your domestic stock market, basically. And the more you underperform, the more you actually want to rotate and chase the trend, right, of rotate away into this, what I call like value-oriented international stock markets that nobody cared about for 15 years. Right. And all this, we're talking about the economic and the behavioral side of it, the economic side being like, you want to be in the best performing markets and you're not, if you're in the US and the behavioral side being, but you can't do anything until it's safe and everyone else is doing it because that's how it works. But then there's also a political side, which is, if you're, you know, we saw a little bit of this this week, but like if you're a Danish pension fund and you're potentially, your territory is going to be invaded by the United States, which like whether you believe that or not, it was a threat that was made by the US government. So it's not like some joke, then do you want to be massively overweight the United States or even Canada? Like if the president of the US is publishing maps of the United States that include Canada and you run a government pension fund in Canada, you know, there's probably some political motivation to just say, like, okay, well, you know, we're probably not going to get invaded. But, you know, there's always that possibility and, you know, if you do get invaded, your assets are going to be seized. So obviously, Canada's, that's not happening. But if you go down the list of countries that are like most hated by Trump, you know, you don't really necessarily know if your assets are safe, you know, Russia saw the hard way that your assets are not necessarily safe, depending on who you are and who likes you and who doesn't. So I think there is a political aspect to it as well. Yep. So now we're left with the usual question. So should you from load this change of investor behavior? And the question, the answer to that question is, well, first, how much does it cost if you're running money? That's the first question you should ask. Is it positive carry negative carry? How much does it cost to even try this? And the second is when is the catalyst for your, you know, positive, skew performance to kick in? And the first question is very easy. It's simple mathematics. So we can easily all take a look at the carry and the ball and whatever of each instrument. But when, when do the flows materialize? How do you front load this? I mean, this is, this has been the hardest part because in April last year, I remember around April and May, everyone was talking about, okay, this is coming. It's very obvious. They need to do something. The evidence that pension funds did something is very, very small, frankly, almost nonexistent. So they didn't do much. Your question is now you got another episode. Is that enough for not? And how do you answer this question? Well, I think the relevant thing though is that the flows never really turned, but still the US underperformed and the dollar didn't perform very well. So that's why I think there's such a skew in that you're, you're either going to be benchmark or you're going to be ahead of benchmark, I think, by diversifying. So you might not be, you might not crush it, but I mean, obviously you crushed it in 2025. But I think that, you know, it is, you don't necessarily need a catalyst as my point because the flows haven't even really begun and yet the US is underperforming anyway. Yeah, that's actually a very fair point. As another client put it, sometimes the recipient of this flows are relatively small markets. And you're talking about a large amount of whales potentially even moving a small portion of their balance sheet simultaneously into asset classes that are much smaller. Less. This is exactly what I wanted to talk about. Nice. It's very cool. Because it's a very good point. I mean, for example, I have been long Peru for a good time now. Okay. Why Peru? Yeah. I mean, it's in the supply chain of Latin America. It's a lot of copper exports, solid central bank. I have a bunch of reasons to be long Peru. Now, Peru basically just only goes up, okay, there is no, I don't know what the hell is happening. It only goes up. Fine. Why? When you ask around the Peruvian market is relatively small. If a few people get interested and flow of capital, either foreign direct investments or capital flow go there, it doesn't take much to move the Peru market by a lot. And so I wonder if I can extend this and say, will it take a lot to move this Swedish market up or the Canadian equity market up a lot compared to the SMB? I think it's a topic, Brent. So what do you think? Yeah. So that's what I wanted to talk about because I know your fund is doing really well this month. Hopefully I'm not jinxing it because of EM and precious and other things. And the big question that everyone always says is, okay, sure people wanted to diversify out of the US, but where are they going to go? The global markets are too small. The US is the big one and no people don't have a choice. But I mean, that's bullshit. They do have a choice. It's just what price do you want to pay? And so we're seeing that, right? We're seeing EM has a sharp of three silver, has like whatever tripled gold is going up every single day. So essentially you're seeing a demand shock in all these markets like Peru, I guess too, which I don't look at. You're seeing a demand shock with, you know, obviously not enough supply because these markets just aren't very big. And that's essentially the answer, right? Is that things where wherever that money goes, that thing moves a lot because those markets are too small to accommodate US sized capital flows. So even if tiny bits of the US capital flows are going to other countries, those or to other asset classes, those asset classes can't, can't take it. And so they go absolutely crazy. And like I was thinking about this with silver in that or emerging markets is the, they just basically never did like even Brazil. You had to our CCO drop out and some dividends and a bunch of stuff. And dollar Brazil went like 6.35 to 650 and it's at 5.35 to 550 and it's at 5.28 now. Like it's all the way back down. So Brazil is rallied all the way back up. And that's the crazy thing, which I think is a little bit of a regime shift is that especially important because I'm a mean reversion kind of guy. Like I was trying to sell silver a whole bunch of times just for like pullbacks kind of thing. Like very few times was there even a big enough pullback to trade it? Like there was from 50 to, or from 52 to 46 or something when they hiked margins. But essentially like all the old rules of mean reversion or margin hikes are bad for silver and things like that. None of them have worked because or same thing with Brazil. And it's a little bit like Bitcoin when Bitcoin was going up. That you essentially have like more buyers and sellers, which sounds funny, but it's true. And people willing to pay any price, the buyers are willing to pay any price. And you have this narrative that will just accommodate it. So like with Bitcoin, it was like decentralized peer-to-peer cash and then, you know, it went from that to the government's going to buy it a strategic Bitcoin reserve. So like fully centralized by the government and Michael Saylor and it went up that whole time and the narrative kept on changing. And it's kind of like that with silver, like silver's gone from like solar to debasement hedge to risky asset back to, you know, store value or whatever. And in the end, a lot of these things are just seeing too many flows for not enough sellers. And I think that's kind of an interesting thing as a regime shift is that if money does truly want to get out of the US, the US is so massive compared to all these other markets that the point is that I guess you got to use your imagination on where things can go. Yes. And something I would like to say about how we look at things as well is the perceived distribution of the returns you can generate in a trade. This is very different brand when you look at effects and rates, which I call bound asset classes, but they have, they have boundaries. I mean, how low can the dollar go? Yeah, I can do a lot more, but can the euro trade at one 80 versus the dollar in any short horizon? Maybe not. I think you have to think of the policy makers, right? I think the central, the ECB will do something if the euro becomes completely unhinged on the upside. There are some limitations, I would say. And the same goes for rates. I mean, the zero lower bound and you see what's happening in Japan, right? Long end explodes and immediately the policy makers come in and say, yeah, okay, we need to do something about it, but there are other asset classes where these boundaries are much more blur, I would say commodities, clear example, specific equity markets whose valuations are very cheap, because then it can be a combination of earnings pressure picking up and valuations expanding at the same time. And there, the distribution of returns is much, much more uncapped on the upside. The typical example is people, we were long-silder somewhere like last year. Unfortunately, the process took us out at some point a while ago. So that was great. Money was made there. Somebody asked me, what's your price target on silver? I don't have any clue what's my price target on silver. I just have a trailing stop and I just keep in the trade as long as it works. And why? And what is the price of silver? I'm sorry, it's anything people are willing to pay. I mean, there is no very, very little connection and boundaries. I think I can say almost the same to specific emerging market equities or very cheap value, beaten down stuff, because the valuation is so cheap, there is so much upside. So also, I'm saying this because I think the way you structure trades needs to be thought around this. Do I do a trade where my upside is very large and I can use a CTA-like trailing stop? Or do I have to think about a boundary with a profit target? I think that's an important distinction to remember. Yeah, and you can be a lot more greedy or a lot greedier, obviously, if it's unbounded. And then it comes down to structuring, like a lot of times people do. In FX, we'll do things that knock out if it goes, if it moves, X amount, and it cheapens up the option. Obviously, in unbounded things, you don't want to do stuff like call spreads or anything like that. You just want vanilla's. I mean, maybe not now with where silver ball is, but generally, like in unbounded things, you want to own the tail if you believe that it's going that direction. Whereas in something like, like you said, like dollar yen, maybe you can own a tail, although they're very expensive, but something like Eurodollar, yeah, the tail's just, you need a really big shock, like the terms of trade shock that we had after the Russia, in order to get a tail move in FX, it's just so much more difficult. And that's the thing in like, in a lot of asset classes, especially FX, there's policy reactions, but in silver or whatever, like no one gives a shit whether silver goes to $200 or $6, you know, like no government is going to really care. So yeah, that's a, I think an interesting thing that I haven't really thought that much about is, you know, is it bounded or is it unbounded? And, you know, a lot of times you can extract that information from the, from the options market as well. So you can make your own determination of whether it's bounded and then compare that to what the market's saying. And, you know, maybe sometimes you'll see something that feels way more unbounded to you than the market's pricing. And I mean, that's possible in FX, right? You could say, hey, if there's a panic and the Australian super funds all decide to hedge, you know, I think Ozzy is going to go 15% this year, which is like not impossible. And then that's like sort of like an unbounded kind of move for a currency. And then you look at what the 25 delta risk reversal is and it's like, okay, well, you know, I'm going to hit an absolutely massive home run if Ozzy goes up 15%. So I'm going to do it. I'm not going to do cosplays because then I'm just like, then the structure doesn't match the idea. You know what I mean? Yes. Exactly. I was drinking because we run this podcast on a very spontaneous thing. You know, we don't prepare anything just to click record and you hear, brand and I talk about it. The last thing we should add is that we should drink a beer so that we sound a bit tipsy. And then I think that there will be a keen to having a chat at the bar about markets. Yeah. This is something that also I think I had to learn because every time you put a trade on if you're a macro positive skill guy like me, you always dream that your upside can be potentially infinite, right? Because you are right. I'm right 53% of the time. So I'm wrong very often, which means that when I'm right, I really want to hit it out of the park a couple of times a year. But you have to be realistic, brand. There will be times where you can't hit it out of the park. If you do Euros with, I mean, I'm sorry, but there are obviously mutations to the downside where Euros with return distribution can look like, right? So you have to be realistic, I think. Yeah. And I think sometimes fund managers or even like bank traders or whatever get kind of addicted to this idea of the positive skew and ignore expected value. And like obviously what you really want to be optimizing is expected value, not skew. You know, if skew optimizes expected value, that's great. But a lot of times people will see a trade like, oh, I can risk a million to make a million. And it's a 70% chance I'm going to be right. And they won't do it because it's like, ah, that's too boring, it doesn't have enough skew. Right. Which makes me feel really sad. I think we should frame this, start doing some merch of the macro trading floor. And the t-shirt should say, do you want to optimize EV or skew? And actually, it's all about EV. This is something we should, for a second, just try to talk about it, brand. Because this hit me early in my career when I was running money before. And then you basically only want things that are two to one payout, three to one payout, five to one payout. Because what you say to yourself is, oh, yeah, but my subjective probability, if I do a three to one trade, my subjective probability, as long as it is more than 33%, I should actually put the trade on. So you find it much easier basically to find things where you think the probability is four to 50%, and the market gives you three to one. Problem is that not often this is positive expected value, because these are long shots. These are still very hard things to, to realize terminally where you want them to realize. And there was somebody who told me the other day, or make names because it's a trade, but it's a very well-known guy in the market who told me, you know, I'm looking at KW, Korean one selling cold spreads. I said, so dollarcare W use sell cold spreads. And I said, why is that? Yeah, because obviously the policymakers don't want this to go above 1500 and the Korean policymakers and the US policymakers, nobody wants this thing to go above 1500. So I think it doesn't go. If the policymakers really don't want it, then it doesn't go above 1500. And then I looked at, we looked at the pricing together, this is a client, and I said to me, yeah, but you know, the best you can do here, if you do some barrier, one touches, whatever, you can get the one to three payout, like that's the best you can get. Right. And he said, that's great. It's 33% chance of something that has very, very rationally, a very low chance of happening because they will intervene hard. Now, even if it's wrong, I don't know, but it's very interesting, as you say, it's negative skill, but probably most of the BV. Yeah, most people don't think that way, just for a bunch of reasons. And it's a lot of also the one issue with that is that you need a lot of those in order to actually run a proper book, you know, like you only need one 10 to one shot to come in to make your year. But you need a lot of, you know, one to three shots to come in, but yeah, I do feel like, you know, there's a reason for people by lottery tickets and, you know, if there's a psychological element of maximizing psychological utility instead of financial utility or whatever to that. You know, one last thing I just going in a completely different direction because I see we don't have much time left is it's interesting to me that some of the economies like Australia, New Zealand seem to be picking up and that's kind of a little bit coming out of nowhere. In fact, like the RBA is probably going to hike, I think on February 3rd, which is quite counter to what is going on in most of the world, you know, where people are just finishing up rate cuts and are on hold. So I think there's also a little bit of an interesting story happening in pockets, where it's not all just money escaping the US because like obviously that's sort of like this slow drip trend, but there's also some positive stories emerging in, in, for example, Australia, New Zealand on the economic side. So we should talk about this for a second, Brent, the Aussie story. I think that's the most interesting one before we move to New Zealand. So it's true that the pricing is counter trend, but there is also true that the Australia something is happening that doesn't happen in a very long time. Before the elections, which were second half of last year, if I remember correctly, the current income and government in Australia decided to throw a primary deficit of about 1% of GDP on the Australian economy. And this had effectively never happened, Brent before. Australia was one of these countries where primary fiscal deficits are forbidden. You can't do that, basically. Alab-Brazil, or at least what Brazil is trying to do or the market is imposing on Brazil. And when you change the fiscal stance so rapidly towards loosening, it doesn't take much for the economy to run hot. You're basically throwing money on an economy, which isn't used to have money from the government. And what happens to the Australian economy is that it takes money by itself. It leverages up the housing sector, which is basically the same that New Zealand, Canada, the aid and so on and so forth. And now you throw fiscal money on the Australian economy and it eats up. And the fiscal year in Australia goes from June to June, which means the money is still flowing through the economy. And it will flow for another three, four months until we go to the second part of the fiscal year in Australia, where the PMS said, okay, we need to slow things down. We're going to take off this electricity subsidy and try to slow down the momentum. So I think fiscal has become a key driver now of rate cycle, mini rate cycle, mini effect cycle. You really need to follow very, very closely what happens there. Right. And that's on an economy that basically hasn't been in recession since 1991. I mean, there was like a technical one in COVID, but, but yeah, that's interesting and Ozzy's starting to break out. So it's a popular trade, but that doesn't mean it's not going to work. Yes. And a hiking of the RBA, whether it's February or May, I don't think it really matters too much at this point for the market. It's more about today's sound hawkish, they might as well skip February and then say, okay, we hike at the next round. Effectively, we want more evidence to hike, but at the end of the day, it's a central bank that is also deemed to be relatively responsible by the market. The other thing about the fact is that there are two things that I noticed that matter a lot in this regime. The first one is capital flows. This is actually by far the most important of them all. If you look at what's happening in Chile, the Chilean peso brand, I mean, you can't stop this thing from railing anymore. And if you look at the yield there, it's around 4.5%. The central bank has rakes about 4.5. 4.5 is not very high. It's barely any positive carry versus a dollar, but nevertheless, this thing just keeps going because of the changing government, right? There is a right-wing government, pro market reforms, etc. So capital flows are very important to move the needle, especially in smaller economies, but then the central bank stands more than the long end of the bond market. It's the central bank stands brand that really changes the direction for a currency. And yeah, Australia now has the support of a central bank. I don't know if they're high in February, but they will be hawkish for sure. Yeah. And then RBNZ actually has high-priced way deep in 2026 as well. Yeah. So New Zealand is a different case. Fiscal there is much slower, but okay, there is a new central bank governor. We'll see what they do there. I think we are about to hit the clock. That's what I hear from Brent. Any parsing words. I've got to go work. I've got to go work. I've got to go work. This is not work. You heard it here. Ladies and gentlemen, we thank you very much for listening as always. You find us on Bloomberg chats if you have any questions and we'll talk to you next week. All right. Thanks, Seth. Thanks, everybody. The content provided on the macro trading floor podcast is for general information purposes only. No information or other content provided in this podcast should be considered as investment advice. Seek independent professional consultation in the form of legal, financial and fiscal advice before making any investment decision. Always perform your own due diligence.