HSBC's Major Says European, U.S. Inflation Look 'Cheap'

The video tutorial discusses a Bloomberg function used by professionals to analyze the five year forward break evens, which estimate inflation starting in five years. Central banks use these estimates for policy guidelines, aiming for targets around 2% in Europe and the US. The video highlights opportunities in inflation-linked bonds, noting that current valuations appear attractive compared to central bank targets.

What is the primary focus of the Bloomberg function discussed in the video?

• Assessing company financial health

• Evaluating five-year, five-year forward break-evens

• Analyzing stock market trends

• Predicting currency exchange rates

What does the five-year, five-year forward break-even represent?

• The current inflation rate

• The market's estimation of inflation starting in five years

• The interest rate set by central banks

• The GDP growth rate over the next five years

How do central banks use the five-year, five-year forward break-evens?

• To set interest rates

• To guide their policy decisions

• To determine tax rates

• To forecast economic growth

What does it indicate if forward break-evens are below central banks' inflation targets?

• The market is overvalued

• Interest rates will decrease

• They are considered cheap

• Inflation is expected to rise

Which regions are mentioned as having potentially undervalued inflation markets?

• Asia and Africa

• Europe and the US

• Middle East and Canada

• South America and Australia