 if you get strengthening prices as a result. Let's talk what's going on with bond prices and some more details. FIG Securities Managing Director now and CEO Mark Payton live from the FIG and City. Welcome into the program on a week on a session like this. It's kind of a step back in wonderment position. Have you seen this? When did you last see this? Let's put it that way in terms of the feel that is in markets to the minute. Just put them to deck. Yeah, hi, Carson. Yeah, I guess we are seeing continued sort of rise in yields and prices going up. A bit about seven basis points overnight across the board. I think what's interesting is that's consistent of both $8 and US dollars. So it probably underpins the longer view about a weaker economic growth outlook, softer commodity prices, softer oil prices, et cetera. And so capital looking for a safer haven, as you said, particularly sovereigns. Do you find it all the more surprising, given that there's not that distinction between the two markets, given we have that closer proximity to China, we're seeing is more vulnerable, more a proxy play. But on this price action, what is it telling you? I think it's certainly a tale of two economies. In Australia, the closer linkage into China and the knock-on effects of an opening outlook there in Australia and then in the US. I think the Fed has been talking about rates going up at some stage towards the end of this year. I think this probably takes a little bit of wind out of the sails of that and a lower interest rate outlook for longer, really reflecting weaker economic growth conditions, particularly in the US. It's interesting that, again, those government bonds in Germany were destination to assure, even though the story seems to be now questions around the spillover from VDAP, largest employer in the nation, and the dominoes that might drop beyond that. And still we then talk safe harbor in the same breath. Do you see that as slightly paradoxical? A little bit. I think the Volkswagen story you're referring to is obviously unique and specific to them as an organization. But if you look at their bonds, their bonds are off, I think it's about 6%. So they're trading around a 94 cents level. At the same time, their equities are off for about 35%. So the market is saying they don't expect a default. They're not saying that they expect a collapse or anything like that. They're certainly probably predicting weaker profits as the company endures what will probably a long drawn out saga and a whole lot of fines and all those sorts of issues as each country goes through that. Yes, it's a very large employer. I think it's a 240,000 employees at Volkswagen. But in the context of Germany's overall industrial sector, manufacturing sector, it's a relatively small percentage in its own right. OK, the industrial profit figure out of China was a key catalyst for overnight selling. Then again, the Fed made its expression on China quite well known at that set piece post-Fed meeting with the president himself, flagging that economy. What more has developed since to really kind of unsettle? I think if you look at employment growth or lack of employment growth, I think the story I'm referring to is more about US in its own right. There's a change of sentiment there coming. I think the Fed's keeping its options open about a potential raise before the end of the year, but more likely into next year. I think the more likely the next year is now emerging. So weaker employment growth outlook, no real inflation removes on wages. As a consequence, no increase in inflation in the US. And as a consequence, the argument for holding rates down, which has continued volatility in equity markets and low growth, I think that story continues to play out in the US. I don't think you'll see rate rises in the US until next year. And frankly speaking, you know, if this is the new normal, why not come out and be more explicit and why give false hope on even this side of Christmas, when clearly you could actually come matters a whole lot more by setting a longer course, a longer dated timetable? Yeah, possibly. I can't speak for Janet Yellen and the whole machinery that speaks to the US. Obviously, there's probably more interpretation comes out of what is said there than what is said. So I think the market definitely expects rates to go up eventually in the US. They expect the economy to rebound to some extent. Everybody's looking for those indicators. They're looking for consumer confidence to rise. They're looking for business investment confidence to play out. And I think everybody's hungry for it to happen. You know, we've been a very long protracted period of low growth. And there's a huge amount of capital in the world. There's a huge amount of energy looking for growth rates to return. And as the guest economy in the world, all eyes are on any sort of positive indicator that might come in the US to see some sort of rate right. As a consequence, the regulator wants to be able to manage inflation. And you'll know the difference between the US and Australia is they have a specific inflation target rather than a range. So I think they're keeping their hands on the levers, ready to act probably as soon as they can. Except the decoupling is now such a sort of a myth it was such a kind of questionable term to start with that now the idea that you can have the funds that have been funneled out of the United States run back into that economy at no disruptive cost is a complete fallacy and a huge concern alongside. Indeed. The thoughts as well just on your issuance when you reflect on having gone to the market where I was silver chef in 2012 and now with the benefit of all that hindsight to look back on it and make a determination on. Yeah, we've closed our 22nd bond issue transaction today which means figures arranged a billion dollars worth of issuance. So for corporates now there's a particularly for unrated corporates where there previously hasn't been a pathway to raise bond financing as a third pillar in your capital stack. There's now a very proven and reliable pathway to be able to do that. For investors looking for a safer return than being invested in equity and a better yield and a lower, longer interest rate environment these sorts of instruments have proven to be a very good opportunity to invest. So opening that market up we've now got a very stable and consistent pathway for the issuers and a great investment opportunity for quite a wide range of investors. And on that note with that opportunity before we want to thank you for your insights and thank you so much Mike Payton. FIG Securities and the Director and CEO they're live from our Sydney studio, their Sydney studio at the very least. Just watching what's going on in Hong Kong, the Hang Sengs falling.