 For more on this let's bring in Mark Bailey from Fig Securities. He joins us live and direct from Sydney. Mark, hello to you Thank you for joining us. I'm really we're already seeing that pounds sterling moves Shifting into this new trading week and pressure expected to mount on the UK currency with the UK PM Expected to push for that hard Brexit. Yeah, good morning, Natalie I think you know that hard Brexit certainly has been firming if you read the the press over the weekend in the UK She does have that speech on Tuesday where she's expected to flesh out in a inconsiderable detail the UK plans ahead of Any formal triggering of that article 50, you know as John Union rightly pointed out that certainly looks like it's going to be hard Brexit that's what she's been talking about but I think you know the Investors in the market more broadly has been expecting maybe some softening at the edges because we haven't seen any detail But that certainly doesn't look like the case and as John pointed out there in in the package You know, it will have impacts on on the UK economy, especially if you think about the financial sector, you know, there's a lot of US banks that are headquartered in London for the whole European operations and they would potentially have to look to move elsewhere You know, there's been speculation that some banks have been planning to maybe move to Dublin You know or even into continental Europe as well Frankfurt and and Paris and Amsterdam But you know, probably, you know, none of those options are really particularly Appealing to those are London based bankers at the moment So there's going to be a major impact and as you rightly say in terms of sterling, we have seen pressure on that It's dropped down now below that $1 20 mark You know, I think that's kind of almost a three month low and as John highlighted there as well You know in terms of the inflation at the UK inflation You know, he's probably going to be higher because you see that weaker sterling the import price pressure And in terms of the read that we get on inflation on Tuesday as well We have CPI core and headline is expected to be 1.4 percent Core is already at 1.3 percent, which is that you know the highest that we've seen in around about three years So there's an impact that we're seeing there and that leads on to the Bank of England and Mark Carney You know, it's a very difficult balancing act that he's going to have to manage in terms of potential impacts on the UK economy You know potential impact of some of the financial institutions pulling out yet Maybe he's going to have to deal with higher inflation So, you know the economists seem to be agreeing that the next move in the UK is going to be higher But the the consensus among economists is that there's going to be no move in rates until 2019 So well into the future because of the the fine balancing act with Bank of England is going to have to manage Just on that note It's been suggested that higher inflation the UK economy can absorb But the greater risk is in fact if we then see stagflation, would you agree? Oh, I mean if you start to see stagflation then that's obviously going to be a big issue in any economy And that's that's a fear from from the central banks and that's why you're seeing You know the ECB and to a lesser extent the Bank of England continuing on the QE because they don't want to see You know the that low inflation becoming high inflation in a weak economy So they're still trying to you know have weaker monetary policy to still try to Generate GDP growth and jobs growth as well So you don't have a recession while she's still having higher inflation the UK economy is the way that I think of it It's always been a bit of a canary in the coal mine in terms of inflation the UK economy for Whatever reason maybe because it's considerably more open a lot of economies in the world Always gives you a really good insight in terms of inflation the UK economy is always been susceptible to inflation from the From the 60s onwards, you know in terms of the oil price and we've seen various spikes in inflation that maybe other economies Haven't so I always actually keep a very close watch on the UK inflation right because I think it's a good leading indicator for potentially What can happen on a more broader global basis? We saw the recovery in the Treasury market coming to an abrupt halt on Friday mark Obviously the week ahead in the US is of particular importance We have not only comments coming through from US Fed chair Janet Yellen, but also naturally The inauguration of US president-elect Donald Trump We are hopeful of getting more indicators in terms of fiscal policy over the next couple of days particularly following that that Disappointing formal press conference last week, but what is the outlook for the Treasury's market here with all of this in play? Yeah, I mean there's a lot of dynamics going into that Treasury market as you rightly say and you know It was disappointing in terms of that press conference in terms of I think in terms of the content that was so severely lacking in terms of his plans for any kind of corporate tax cuts or Fiscal spending there was very little outlined and also the fact that he you know He seems to be still a very very loose cannon So I think you're gonna see a lot more volatility in the market and if you get more volatility you probably see people looking to reduce their Their risk exposure overall in terms of their portfolios that typically will mean that they'll be looking to buy more US Treasuries and then also you have the impact of potentially who are those whole large holders of the US Treasuries Offshore you've got China, you know is is Trump going to annoy the Chinese? Authorities over there are they gonna start to selling the Treasurers as well And then also in terms of the you know the inflation expectations because of fiscal spend You know the market is positioning for that in terms of you know higher yield curves And probably a steeper yield curve as well And if that inflation doesn't come through because for whatever reason the fiscal spending doesn't come through as Expected then you may not see that steepness. There's a lot of factors going on So what should investors do? I mean at the moment my my my preference is to be very defensive I think volatility is going to be very high for the next a couple of months because I don't think anybody even probably Donald Trump Has any idea what he's going to do actually once he becomes President and once in terms of the plans and how it all goes through and actually works its way through the system So I would position more defensively in terms of credit quality and also in terms of duration along the curve I prefer the shorter dated bonds to the longer dated bonds because I don't think that's steaming it and the back up in Yields has finished and so I'd position the portfolios more defensively Might we'll have to leave it there. Thank you so much. Thanks, Natalie. Have a good one Coming up on market countdown. It's shaping up to be a bump a week on the