特朗普抨击AI高管放缓研发，美债收益率破5%引发加息预期

ABEER: GOOD MORNING. THIS IS "HORIZONS MIDDLE EAST & AFRICA." OUR TOP STORIES THIS MORNING. AI'S SAFETY CLASS, DONALD TRUMP CRITICIZES CAUSED BY TOP AI EXECUTIVES TO SLOW DOWN ARTIFICIAL INTELLIGENCE DEVELOPMENT. THE U.S. PRESIDENT WARNED THAT PUTTING THE BRAKES ON AI WOULD ONLY BENEFIT CHINA. AND CRUDE CONTINUES TO CLIMB AS SAUDI ARABIA'S EAST-WEST PIPELINE REMAINS OFF-LINE. FRESH WITH THE ATTACKS AND LIKE -- ADD TO CONCERNS AS MIDDLE EAST ENERGY WRIST DEEP AND.

AND BOND PRESSURE BUILDS. THE TEN-YEAR TREASURIES REACHES 5% AS INFLATION CONCERNS MOUNT. THE MOVE RAISES THE STAKES FOR THE FED AS MARKETS BRACE FOR A RATE HIKE THIS WEEK. IT'S JUST GONE 8:00 A.M. ACROSS THE EMIRATES. I'M ABEER ABU OMAR IN DUBAI. LET'S LOOK AT WHAT MARKETS ARE DOING AT THE TOP OF THE SHOW. S&P FUTURES DROPPING ONLY SLIGHTLY THIS MORNING, .10% AS INVESTORS RETHINK A BAZOOKA OF RATE DECISIONS THIS WEEK, STARTING WITH THE FEDERAL RESERVE.

TOMORROW WE ALSO HAVE THE BOE AND THE BOJ AT THE END OF THE WEEK. BUT LET'S TALK ABOUT WHAT THE S&P DID, RETROSPECTIVELY IT DROPPED .5%, MODERATING FROM THE START OF THE PERFORMANCE YESTERDAY. THE NASDAQ 100, .8% DROP AND MEMORY CHIPS WERE REALLY FEELING THE PAIN, THE STOCKS GAUGE DROPPED AROUND 6% YESTERDAY. THE AI SCARE IS STILL VERY MUCH PLAGUING MARKETS AND THAT IS SEEPING INTO THE ASIAN SESSION, THIS MORNING .4% LOWER FOR MSCI ASIA-PACIFIC.

OF COURSE A LOT OF AI NAMES THERE, AND THE GEOPOLITICS IS ALSO CONTRIBUTING TO THIS WEAKNESS. BRENT CRUDE PRICES DROPPING 07 ON THE BARREL, GAINING 1.3% THIS MORNING AS THE SENSE OF PLATO IN THE MIDDLE EAST CONTINUES INTO TODAY. BUT SAUDI ARABIA'S EAST-WEST PIPELINE IS STILL OFF-LINE. WE HAVE REPORTING SYSTEM JUST -- TO SUGGEST THAT SAUDI ARABIA IS RESORTING TO HORMUZ TO GET SOME OF ITS EXPORTS THROUGH THE LINE. LOOK AT THE YIELD ON THE 10 YEAR BENCHMARKS, 5% ALREADY.

IT IS GAINING THIS MORNING TWO BASIS POINTS AND WE AWAIT THE FED RATE DECISION HAPPENING TOMORROW AND THE CREDIBILITY CASH AND FOR KEVIN WARSH IS GOING TO BE A QUESTION THAT WE CONTINUE TO ASK INTO WHAT THE FED DECIDES TO DO TOMORROW. A LOT OF ANALYSTS HAVE CHANGED THAT THEY THINK THE FED WILL DO TO AN ACTUAL HIKE TOMORROW, AND OF COURSE SWAPS ARE FACTORING IN . A HIKE IN SEPTEMBER AND IN DECEMBER. BUT OF COURSE THAT ALL REMAINS TO BE SEEN.

FOR SOME OF THE WEAKNESSES WE ARE WITNESSING IN THE ASIAN SESSION THIS MORNING, WE'VE GOT AVRIL HONG IN SINGAPORE FOR US. WHAT ARE YOU LOOKING AT? AVRIL: TODAY IT'S REALLY STILL ABOUT THOSE CONTINUED CONCERNS ABOUT A SLOWDOWN IN AI SPENDING. THIS IS FOLLOWING ON FROM THE SELLOFF WE SAW IN U.S. CHIP STOCKS OVERNIGHT. IT’'S INTERESTING HOW YOU ARE SOME HOW SEEING JAPAN CLOCKING GAINS TODAY AS THE KOSPI EARLY ON IN THE SESSION, AND GOING ON FROM THREE SESSIONS OF DECLINES ON THE KOREAN BENCHMARK.

A COUPLE THINGS HAPPENING HERE, SOME OF IT MIGHT HAVE BEEN TO DO WITH TRUMP'S PUSHBACK ON THE PROTOCOLS TO SLOW DOWN AT PROGRESS BUT ALSO THE IDEA THAT WE'VE BEEN DISCUSSING OF LATE THAT THERE STILL ENOUGH COMPUTE DEMAND GIVEN HOW THINGS ARE SHIFTING FROM TRADING TOWARD INFERENCE AND THERE'S ALSO ADOPTION, SUPPORTIVE OF ADOPTION OVERALL, IN SPITE OF SOME OF THE CONCERNS. WERE SEEING A BIT OF TURNAROUND IN THE AI TRADE, AT LEAST IN TERMS OF A DECLINE.

WE ALSO SAW THE JGB 20 OPTION IN TERMS OF THE DEMAND METRIC, IT IS HIGHER THAN THE 12 MONTH AVERAGE SO MAYBE A BIT OF RELIEF FROM GLOBAL DEBT, BUT AS YOU HIGHLIGHTED EARLIER, WE ARE OF COURSE STILL SEEING THE TREASURY YIELD STILL ABOVE THE 5% HANDLE. ABEER: THANK YOU, AS ALWAYS FOR THESE UPDATES. LET'S DIG DEEP INTO THE AI STORY, A HIGH-STAKES CLASH OVER ARTIFICIAL INTELLIGENCE IS HEATING UP BETWEEN SILICON VALLEY AND WASHINGTON, FOLLOWING A PUBLIC PUSH BY TOP AI EXECUTIVES TO SLOW DOWN FRONTIER AI DEVELOPMENT.

PRESIDENT TRUMP STEPPED UP HIS PUSH BACK AGAINST THE IDEA OF NEW AI GUARDRAILS AND CRITICIZED TECH LEADERS CALLING FOR AN INDUSTRYWIDE SLOW DOWN. IN A SOCIAL MEDIA POST, TRUMP SAYS THE IDEA THAT AI WOULD DESTROY HUMANITY IS A, QUOTE, HOAX. JENSEN HUANG ALSO TOOK A LIVE PHONE CALL FROM TRUMP DURING A PANEL DISCUSSION FOR THE ALLIN PODCAST.

THEY ARE JUST PLAYING RIGHT INTO THE HANDS OF A LOT OF PEOPLE THAT DON'T WANT TO SEE IT HAPPEN AND THAT COULD BE POLITICAL PEOPLE AND IT COULD ALSO BE CHINA. AND WE ARE NOT GOING TO LET THAT HAPPEN. IT'S A HOAX. ABEER: AND AI SLOWDOWN WORRIES DRAGGING STOCKS LOWER AS INVESTORS REASSESS THE PACE OF DEVELOPMENT WHILE ALSO CONTENDING WITH A SURGE IN OIL PRICES. CHIPMAKERS HAVE BEEN HIT HARD WHILE INFLATION FEARS HAVE PUSHED THE U.S. 10-YEAR YIELD TOWARD 5%.

THIS IS JUST AHEAD OF THE FED'S RATE DECISION TOMORROW. JOINING US NOW TO DISCUSS ALL OF THIS IS MATTHEW RYAN, HEAD OF MARKET STRATEGY, GOOD TO HAVE YOU WITH US. SO MUCH IS HAPPENING IN THE MARKET. FROM AI TO GEO POLITICS TO SURGING PRICES, TO WHAT WERE SEEING ON THE YIELD FRONT. SO WALK US THROUGH FIRST OF ALL WHAT YOU THINK THE FED IS GOING TO HAVE TO DO TOMORROW. WHAT DOES KEVIN WARSH HAVE TO DO TOMORROW?

WE HAVE VERY MUCH FLIPPED OUR VIEW ON THE FED SINCE LAST FRIDAY'S U.S. INFLATION REPORT. WE'VE REMOVED SOME OF THE AMBIGUITY AROUND THE DECISION THAT SHOULD BE ANNOUNCED, IN FAVOR OF 25 BASIS POINT HIKE. WE LOOK AT U.S. DATA, I DON'T THINK IT'S CLEAR CUT. CORE INFLATION CONTINUES TO TREND DOWN FOR THREE MONTHS. IT'S HER FAVORITE METRIC OF U.S. INFLATION, AROUND THE FEDS TO PRESENT TARGET. TREASURY YIELDS AS YOU MENTIONED CONTINUE TO CLIMB.

ACTUALLY WE THINK MAYBE THE BIGGEST REASON TO HIKE IS TO RESERVE THE FED'S CREDIBILITY IN TERMS OF INFLATION BUT ALSO PRESERVING INDEPENDENCE, EVEN WITH THE RECENT CALLS TO LOWER RATES FROM PRESIDENT TRUMP. AT 25 BASIS POINT HIKE IS PROBABLY A DONE DEAL AT THIS POINT. ABEER: SO IF THE FED HIKES TOMORROW AND INTO AN OIL SHOCK, WHAT IS THE BIGGEST CONCERN OR RISK HERE, IS IT INFLATION OR IS IT A POLICY MISTAKE? ESPECIALLY WHEN YOU SAY IT IS A CREDIBILITY QUESTION AND NOT NECESSARILY PURELY A DATA QUESTION.

AS I SAID, I THINK LARGELY THE BIG REASON FOR THE FEDS -- IS TO PRESERVE CREDIBILITY AT THIS STAGE. ONE HIKE WOULD BE SUFFICIENT ENOUGH ARE NOW IN ORDER TO PRESERVE THAT CREDIBILITY AND THIS FOCUS BACK TO THE DATA AGAIN. IF WE CONTINUE TO SEE INFLATION, WITH COURT INFLATION STAYING RELATIVELY LOW, NO SIGNS OF INFLATION EFFECTS FROM THE ENERGY SHOT. I THINK THERE WOULD BE MUCH LESS PRESSURE ON THE FED TO CONTINUE HIKING BEYOND THEN.

I THINK THAT WILL BE THE KEY IN THE NEXT FEW MONTHS, WILL IT TRANSLATE INTO BROADER PRICE PRESSURES. IF IT DOESN'T, I THINK THE MARKET HAS GOTTEN A LITTLE BIT AHEAD OF ITSELF AND POSSIBLY WE JUST SEE A ONE-OFF ABOVE THAT. ABEER: WHAT ABOUT THE BOJ, IF THE BOJ HIKES THIS COMING FRIDAY, AND THAT IS THE EXPECTATION, DOES HIGHER JAPANESE YIELDS AND A STRONGER YEN BECOME OR INDUCE A GLOBAL LIQUIDITY PROBLEM?

YES, IT'S AN INTERESTING QUESTION. I THINK THE BANK OF JAPAN MEETING ON FRIDAY MAY BE THE MOST INTERESTING ONE OF THE LOT THIS WEEK. WE THINK A 25 BASIS POINT HIKE IS NOW THE BARE MINIMUM. WITH THINK IT WOULD BE UNIMAGINABLE THAT WE WON'T SEE A RATE HIKE ON FRIDAY. THEN THE FOCUS IS ON THE COMMUNICATIONS, THEY WILL HAVE NO CHOICE BUT TO STRIKE A HAWKISH NOTE AND EXPLICITLY SAY THAT MORE HIKES ARE ON THE WAY. WITH THINK IT SIGNALS HIKES ARE COMING, THAT SHOULD BE SUFFICIENT ENOUGH TO MEET MARKET EXPECTATIONS.

ANY LESS THAN THAT, WE WOULD SEE A PRETTY SHARP SELLOFF IN THE YEN WHICH HAS BROADER IMPLICATIONS FOR MARKETS IN TERMS OF THE CARRY TRADE, IN PARTICULAR. ALSO IN TERMS OF THE DOLLAR AND THE SWISS FRANC IN PARTICULAR THAT IS ONE OF THE KEY FUNDING CURRENCIES. IT'S GOING TO BE ONE OF THE MORE INTERESTING MEETINGS THIS WEEK AND I WOULD SUGGEST WE CAN SEE MORE VOLATILITY CONCERNING THE BANK OF JAPAN MEETING THAN THE FED, GIVEN THE MOVES WE SEEN IN DOLLAR IN RECENT WEEKS.

ABEER: JUST BRIEFLY, WHAT CONCERNS YOU THE MOST IN WHAT WE ARE SEEING IN THE MARKET RIGHT NOW? IS IT THE AI SCARE, HIGHER YIELDS, OR IS IT THE ANTICIPATION FOR THOSE DECISIONS BY CENTRAL BANKS?

WE FLAG AS OUR BIG