Trump warns Iran faces destruction unless it agrees to a deal

Oil Falls as Trump Claims ‘Very Good’ Iran Talks After Annihilation Threat [Native YouTube auto-generated English captions; publisher: Bloomberg Television; speaker labels reviewed separately] Unidentified speaker [00:00:01-00:00:03 (2 sec)] Live from Brussels, this is Bloomberg Unidentified speaker [00:00:03-00:00:05 (2 sec)] Daybreak Europe. I'm Steven Carroll with Unidentified speaker [00:00:05-00:00:08 (3 sec)] your top stories. Oil slides with Brent Unidentified speaker [00:00:08-00:00:10 (2 sec)] crude on track for its longest losing Unidentified speaker [00:00:10-00:00:13 (3 sec)] streak in a year after President Trump Unidentified speaker [00:00:13-00:00:16 (3 sec)] described talks with Iran as very good. Unidentified speaker [00:00:16-00:00:18 (2 sec)] And Saudi Arabia said it was restarting Unidentified speaker [00:00:18-00:00:20 (2 sec)] a key oil pipeline. Unidentified speaker [00:00:20-00:00:22 (2 sec)] Bundisbank President Yokim Nagel warns Unidentified speaker [00:00:22-00:00:24 (2 sec)] he can't rule out hiking ECB [music] Unidentified speaker [00:00:24-00:00:26 (2 sec)] rates to a level that hits economic Unidentified speaker [00:00:26-00:00:28 (2 sec)] growth. We'll get an update on that Unidentified speaker [00:00:28-00:00:30 (2 sec)] growth this morning with the latest PMI Unidentified speaker [00:00:30-00:00:32 (2 sec)] data from across the continent. Unidentified speaker [00:00:32-00:00:35 (3 sec)] Plus, President Zilinski voices hopes Unidentified speaker [00:00:35-00:00:37 (2 sec)] for future Patriot missile production in Unidentified speaker [00:00:37-00:00:39 (2 sec)] Ukraine, but Bloomberg learns EU leaders Unidentified speaker [00:00:39-00:00:41 (2 sec)] have called on him to bolster the rule Unidentified speaker [00:00:41-00:00:44 (3 sec)] of law. Unidentified speaker [00:00:44-00:00:45 (1 sec)] Very good morning. Let's take a look at Unidentified speaker [00:00:45-00:00:46 (1 sec)] some of the key market moves we're Unidentified speaker [00:00:46-00:00:48 (2 sec)] watching for you this morning. Shares in Unidentified speaker [00:00:48-00:00:50 (2 sec)] Asia inching higher again. Chip makers Unidentified speaker [00:00:50-00:00:52 (2 sec)] rising, but tech shares in Hong Kong are Unidentified speaker [00:00:52-00:00:53 (1 sec)] trading weaker today. We do [music] have Unidentified speaker [00:00:53-00:00:55 (2 sec)] European stock futures pointing higher Unidentified speaker [00:00:55-00:00:58 (3 sec)] as well by 4/10en of 1% for Euro stocks Unidentified speaker [00:00:58-00:01:00 (2 sec)] 50. And on Wall Street after the record Unidentified speaker [00:01:00-00:01:02 (2 sec)] finish on the NASDAQ yesterday, futures Unidentified speaker [00:01:02-00:01:03 (1 sec)] inching a little bit higher again, Unidentified speaker [00:01:03-00:01:05 (2 sec)] although we did have that drop in S&P Unidentified speaker [00:01:05-00:01:07 (2 sec)] financials as traders try to figure out Unidentified speaker [00:01:07-00:01:09 (2 sec)] what the rise of Agentic AI is going to Unidentified speaker [00:01:09-00:01:11 (2 sec)] mean for some of those businesses. Let's Unidentified speaker [00:01:11-00:01:12 (1 sec)] flip the board and look at some of the Unidentified speaker [00:01:12-00:01:13 (1 sec)] other assets we're tracking for you this Unidentified speaker [00:01:13-00:01:14 (1 sec)] morning. Of course, [music] energy Unidentified speaker [00:01:14-00:01:16 (2 sec)] price. This is in focus as we're seeing Unidentified speaker [00:01:16-00:01:18 (2 sec)] the drop in Brent crude now at its uh Unidentified speaker [00:01:18-00:01:21 (3 sec)] lowest level down by 1.1% closing below Unidentified speaker [00:01:21-00:01:24 (3 sec)] $100 a barrel for the first time in two Unidentified speaker [00:01:24-00:01:25 (1 sec)] weeks yesterday. And that fall Unidentified speaker [00:01:25-00:01:27 (2 sec)] continuing today. Gas prices and on the Unidentified speaker [00:01:27-00:01:29 (2 sec)] slide in Europe as well today. [music] Unidentified speaker [00:01:29-00:01:31 (2 sec)] The third day of declines and the Unidentified speaker [00:01:31-00:01:33 (2 sec)] Bloomberg dollar spot index continuing Unidentified speaker [00:01:33-00:01:35 (2 sec)] to strengthen as well now at its highest Unidentified speaker [00:01:35-00:01:37 (2 sec)] level since late July after comments Unidentified speaker [00:01:37-00:01:39 (2 sec)] from the Fed's Tom Barkin about Unidentified speaker [00:01:39-00:01:40 (1 sec)] inflationary pressures [music] may Unidentified speaker [00:01:40-00:01:43 (3 sec)] taking some time to ease. Now, on to the Unidentified speaker [00:01:43-00:01:45 (2 sec)] key risk events we're watching today. We Unidentified speaker [00:01:45-00:01:47 (2 sec)] will get those PMIs starting from 8:15 Unidentified speaker [00:01:47-00:01:49 (2 sec)] a.m. in the UK, 9:15 [music] a.m. here Unidentified speaker [00:01:49-00:01:50 (1 sec)] in Brussels, starting with France, but Unidentified speaker [00:01:50-00:01:52 (2 sec)] also the big other European economies Unidentified speaker [00:01:52-00:01:54 (2 sec)] and global flash PMIs to come later. Unidentified speaker [00:01:54-00:01:55 (1 sec)] We'll be hearing more from the ECB Unidentified speaker [00:01:55-00:01:57 (2 sec)] [music] speakers, including Vuic, Philip Unidentified speaker [00:01:57-00:02:00 (3 sec)] Lane, and Chipalone as well. Plus, Mark Unidentified speaker [00:02:00-00:02:01 (1 sec)] Zuckerberg is due [music] to speak at Unidentified speaker [00:02:01-00:02:04 (3 sec)] Meta's developer conference, too. Will Unidentified speaker [00:02:04-00:02:06 (2 sec)] we hear more about the Muse AI agent Unidentified speaker [00:02:06-00:02:08 (2 sec)] that's causing so many movements on Unidentified speaker [00:02:08-00:02:10 (2 sec)] markets? That's all to come. Let's get Unidentified speaker [00:02:10-00:02:14 (4 sec)] you set up for the day ahead. Unidentified speaker [00:02:14-00:02:20 (6 sec)] >> [music] Unidentified speaker [00:02:20-00:02:28 (8 sec)] [music] Unidentified speaker [00:02:28-00:02:29 (1 sec)] >> President Trump has threatened to Unidentified speaker [00:02:29-00:02:32 (3 sec)] annihilate Iran unless it makes a deal Unidentified speaker [00:02:32-00:02:34 (2 sec)] to end the war with the US. However, Unidentified speaker [00:02:34-00:02:36 (2 sec)] during his visit to the UN General Unidentified speaker [00:02:36-00:02:38 (2 sec)] Assembly, Trump also said US officials Unidentified speaker [00:02:38-00:02:41 (3 sec)] had very good talks with Iranian envoys Unidentified speaker [00:02:41-00:02:43 (2 sec)] in New York. Donald Trump [00:02:43-00:02:46 (3 sec)] >> I can't imagine why they wouldn't want Donald Trump [00:02:46-00:02:48 (2 sec)] to do it. It's a greatness, potential Donald Trump [00:02:48-00:02:50 (2 sec)] greatness or Donald Trump [00:02:50-00:02:52 (2 sec)] >> obliteration. Donald Trump [00:02:52-00:02:54 (2 sec)] Two choices. I mean, it's Donald Trump [00:02:54-00:02:56 (2 sec)] >> in one case it's obliteration and the Donald Trump [00:02:56-00:02:58 (2 sec)] other alternative is potential Donald Trump [00:02:58-00:03:03 (5 sec)] greatness. It could be a great country. Unidentified speaker [00:03:03-00:03:05 (2 sec)] Air Abomar is in Dubai for us this Unidentified speaker [00:03:05-00:03:07 (2 sec)] morning with the latest. Air, President Unidentified speaker [00:03:07-00:03:09 (2 sec)] Trump talking there about annihilating Unidentified speaker [00:03:09-00:03:12 (3 sec)] and obliterating Iran, but we did also Unidentified speaker [00:03:12-00:03:14 (2 sec)] have these talks and some positive Unidentified speaker [00:03:14-00:03:16 (2 sec)] signals come from them in New York as Unidentified speaker [00:03:16-00:03:17 (1 sec)] well. So, where do things stand this Unidentified speaker [00:03:17-00:03:20 (3 sec)] morning? Unidentified speaker [00:03:20-00:03:21 (1 sec)] >> A little bit of a dja vu, right, Unidentified speaker [00:03:21-00:03:23 (2 sec)] Stephen? Good morning. So, we've been Unidentified speaker [00:03:23-00:03:25 (2 sec)] here before obviously multiple times Unidentified speaker [00:03:25-00:03:27 (2 sec)] over the past seven months or so. Unidentified speaker [00:03:27-00:03:29 (2 sec)] President Trump uh making those very Unidentified speaker [00:03:29-00:03:31 (2 sec)] strong remarks against Iran and then Unidentified speaker [00:03:31-00:03:33 (2 sec)] coming up with more positive signals. So Unidentified speaker [00:03:33-00:03:35 (2 sec)] the latest we know is that he said that Unidentified speaker [00:03:35-00:03:38 (3 sec)] the talks had been very good. Of course Unidentified speaker [00:03:38-00:03:40 (2 sec)] we understand that they happened between Unidentified speaker [00:03:40-00:03:43 (3 sec)] the two key US negotiators Jared Kushner Unidentified speaker [00:03:43-00:03:46 (3 sec)] and Steve Witkov albeit they did happen Unidentified speaker [00:03:46-00:03:49 (3 sec)] uh with uh delegates of mediators namely Unidentified speaker [00:03:49-00:03:51 (2 sec)] Katar. Actually Iran state media in the Unidentified speaker [00:03:51-00:03:53 (2 sec)] early hours of this morning did say that Unidentified speaker [00:03:53-00:03:56 (3 sec)] those talks did happen uh with Unidentified speaker [00:03:56-00:03:59 (3 sec)] mediating. Of course had emerged as a Unidentified speaker [00:03:59-00:04:02 (3 sec)] key mediator between the two waring Unidentified speaker [00:04:02-00:04:03 (1 sec)] sides. Now of course this is creating a Unidentified speaker [00:04:03-00:04:05 (2 sec)] little bit of uh a little bit of Unidentified speaker [00:04:05-00:04:08 (3 sec)] euphoria in in markets with markets Unidentified speaker [00:04:08-00:04:10 (2 sec)] reacting to the seemingly positive news. Unidentified speaker [00:04:10-00:04:12 (2 sec)] Let's just remember what is on the Unidentified speaker [00:04:12-00:04:13 (1 sec)] ground. What's on the ground is still Unidentified speaker [00:04:13-00:04:15 (2 sec)] very much the same. The US naval Unidentified speaker [00:04:15-00:04:17 (2 sec)] blockade is in the straight of Hermuz. Unidentified speaker [00:04:17-00:04:19 (2 sec)] uh we're seeing some positive signals Unidentified speaker [00:04:19-00:04:21 (2 sec)] when it comes to US uh to to energy Unidentified speaker [00:04:21-00:04:24 (3 sec)] flows according to the US side and this Unidentified speaker [00:04:24-00:04:26 (2 sec)] is why as you have noted energy prices Unidentified speaker [00:04:26-00:04:29 (3 sec)] are moving to the downside Brent crude Unidentified speaker [00:04:29-00:04:32 (3 sec)] below $100 on the barrel so positive Unidentified speaker [00:04:32-00:04:33 (1 sec)] signals alto together of course Unidentified speaker [00:04:33-00:04:35 (2 sec)] President Trump did hold that meeting Unidentified speaker [00:04:35-00:04:38 (3 sec)] with GCC leaders some top officials from Unidentified speaker [00:04:38-00:04:41 (3 sec)] the GCC uh did meet with President Unidentified speaker [00:04:41-00:04:43 (2 sec)] Trump's on the sidelines of the UN Unidentified speaker [00:04:43-00:04:45 (2 sec)] General Assembly happening this week in Unidentified speaker [00:04:45-00:04:48 (3 sec)] New York but we don't have any clarity Unidentified speaker [00:04:48-00:04:49 (1 sec)] from the Iranian side. We understand Unidentified speaker [00:04:49-00:04:52 (3 sec)] that the president is visiting. We Unidentified speaker [00:04:52-00:04:54 (2 sec)] understand that the foreign minister is Unidentified speaker [00:04:54-00:04:56 (2 sec)] also there, but we don't have a lot of Unidentified speaker [00:04:56-00:04:58 (2 sec)] clarity from the Iranian side or a Unidentified speaker [00:04:58-00:05:00 (2 sec)] confirmation really, Stephen, that the Unidentified speaker [00:05:00-00:05:02 (2 sec)] talks were indeed good as President Unidentified speaker [00:05:02-00:05:04 (2 sec)] Trump had noted. Unidentified speaker [00:05:04-00:05:06 (2 sec)] >> Yeah, we'll watch to see what further Unidentified speaker [00:05:06-00:05:08 (2 sec)] meetings may happen in New York this Unidentified speaker [00:05:08-00:05:10 (2 sec)] week. But just on that question of oil Unidentified speaker [00:05:10-00:05:12 (2 sec)] prices, you mentioned some of the the Unidentified speaker [00:05:12-00:05:14 (2 sec)] physical progress that's been made, but Unidentified speaker [00:05:14-00:05:16 (2 sec)] let's talk a little bit about the Saudi Unidentified speaker [00:05:16-00:05:18 (2 sec)] Arabian pipeline and what they've told Unidentified speaker [00:05:18-00:05:21 (3 sec)] us about the reopening timeline for that Unidentified speaker [00:05:21-00:05:24 (3 sec)] key link. Unidentified speaker [00:05:24-00:05:25 (1 sec)] >> Yeah, absolutely. So, this is a Unidentified speaker [00:05:25-00:05:27 (2 sec)] Bloomberg story that was reported Unidentified speaker [00:05:27-00:05:29 (2 sec)] yesterday, essentially confirming the Unidentified speaker [00:05:29-00:05:31 (2 sec)] fact that Saudi Arabia is moving ahead Unidentified speaker [00:05:31-00:05:33 (2 sec)] pretty quickly with reopening that East Unidentified speaker [00:05:33-00:05:36 (3 sec)] West pipeline that was damaged about 13 Unidentified speaker [00:05:36-00:05:38 (2 sec)] days or so ago after it was hit by Unidentified speaker [00:05:38-00:05:40 (2 sec)] drones from Iraq. And so, we understand Unidentified speaker [00:05:40-00:05:43 (3 sec)] that that pipeline could come to Unidentified speaker [00:05:43-00:05:45 (2 sec)] production as soon as this Saturday with Unidentified speaker [00:05:45-00:05:48 (3 sec)] some exports resuming at the end of this Unidentified speaker [00:05:48-00:05:50 (2 sec)] week or sometime towards the end of this Unidentified speaker [00:05:50-00:05:52 (2 sec)] week. So Saudi Arabia did say before Unidentified speaker [00:05:52-00:05:54 (2 sec)] that half of the capacity could return Unidentified speaker [00:05:54-00:05:56 (2 sec)] within a few days. This is in the Unidentified speaker [00:05:56-00:05:58 (2 sec)] aftermath of those attacks, Stephen. And Unidentified speaker [00:05:58-00:06:00 (2 sec)] then full capacity to return within six Unidentified speaker [00:06:00-00:06:02 (2 sec)] weeks time. And so we're seeing Saudi Unidentified speaker [00:06:02-00:06:04 (2 sec)] Arabia moving pretty quickly with Unidentified speaker [00:06:04-00:06:06 (2 sec)] resuming the capacity or with resuming Unidentified speaker [00:06:06-00:06:09 (3 sec)] production out of the Yamaha site of Unidentified speaker [00:06:09-00:06:10 (1 sec)] course the site that it had used Unidentified speaker [00:06:10-00:06:13 (3 sec)] throughout the course of this war to go Unidentified speaker [00:06:13-00:06:16 (3 sec)] away or to to to stay away from the Unidentified speaker [00:06:16-00:06:19 (3 sec)] strait of Hermos as it gets disrupted by Unidentified speaker [00:06:19-00:06:20 (1 sec)] the conflict that's been again going on Unidentified speaker [00:06:20-00:06:23 (3 sec)] for more than seven months more than six Unidentified speaker [00:06:23-00:06:25 (2 sec)] months at this point. And so Saudi Unidentified speaker [00:06:25-00:06:27 (2 sec)] Arabia is again according to our sources Unidentified speaker [00:06:27-00:06:29 (2 sec)] suggesting that the production out of Unidentified speaker [00:06:29-00:06:31 (2 sec)] the Ambos site could come. But let's Unidentified speaker [00:06:31-00:06:33 (2 sec)] just bear in mind that this site the Red Unidentified speaker [00:06:33-00:06:36 (3 sec)] Sea Babel Mandab another crucial Unidentified speaker [00:06:36-00:06:38 (2 sec)] waterway here in the Middle East even Unidentified speaker [00:06:38-00:06:40 (2 sec)] have been prone to attacks by Houthis Unidentified speaker [00:06:40-00:06:42 (2 sec)] that have been making their way through Unidentified speaker [00:06:42-00:06:44 (2 sec)] the waterway. So a lot of a lot of Unidentified speaker [00:06:44-00:06:47 (3 sec)] caution needs to be considered here. Unidentified speaker [00:06:47-00:06:49 (2 sec)] >> Okay. Air Abu Omar anchor of Horizon's Unidentified speaker [00:06:49-00:06:50 (1 sec)] Middle East and Africa and Bloomberg Unidentified speaker [00:06:50-00:06:53 (3 sec)] television. Thank you very much. Unidentified speaker [00:06:53-00:06:55 (2 sec)] Now turning to Asia where an early rally Unidentified speaker [00:06:55-00:06:57 (2 sec)] has lost some momentum. Let's get an Unidentified speaker [00:06:57-00:06:59 (2 sec)] update on markets from Winnie Sue in Unidentified speaker [00:06:59-00:07:01 (2 sec)] Hong Kong. Unidentified speaker [00:07:01-00:07:03 (2 sec)] >> Yeah, good morning Stephen. Well, we are Unidentified speaker [00:07:03-00:07:05 (2 sec)] seeing Asian stocks here edging just Unidentified speaker [00:07:05-00:07:08 (3 sec)] slightly higher after 5 days of gains. Unidentified speaker [00:07:08-00:07:09 (1 sec)] Now overall, as you mentioned, it has Unidentified speaker [00:07:09-00:07:12 (3 sec)] paired most of the um gains that it saw Unidentified speaker [00:07:12-00:07:14 (2 sec)] earlier today with South Korea's Cosby Unidentified speaker [00:07:14-00:07:16 (2 sec)] index here leading those moves ahead of Unidentified speaker [00:07:16-00:07:19 (3 sec)] the two-day holiday starting tomorrow. Unidentified speaker [00:07:19-00:07:21 (2 sec)] So perhaps investors trimming some of Unidentified speaker [00:07:21-00:07:23 (2 sec)] these risk exposure given the Unidentified speaker [00:07:23-00:07:25 (2 sec)] uncertainty around the outcome of the Unidentified speaker [00:07:25-00:07:28 (3 sec)] upcoming meeting between President Trump Unidentified speaker [00:07:28-00:07:30 (2 sec)] and she especially now that we've Unidentified speaker [00:07:30-00:07:32 (2 sec)] learned that most likely we won't be Unidentified speaker [00:07:32-00:07:35 (3 sec)] expecting CEOs from the Chinese side. So Unidentified speaker [00:07:35-00:07:37 (2 sec)] it does raise questions around how much Unidentified speaker [00:07:37-00:07:39 (2 sec)] further we can see these business Unidentified speaker [00:07:39-00:07:42 (3 sec)] negotiations come through from this Unidentified speaker [00:07:42-00:07:44 (2 sec)] meeting. And that is perhaps why we're Unidentified speaker [00:07:44-00:07:46 (2 sec)] also seeing tech stocks in Hong Kong Unidentified speaker [00:07:46-00:07:47 (1 sec)] leading losses here with the biggest Unidentified speaker [00:07:47-00:07:50 (3 sec)] drag in fact being Alibaba here down Unidentified speaker [00:07:50-00:07:53 (3 sec)] about 3%. We also have learned from a Unidentified speaker [00:07:53-00:07:56 (3 sec)] media report that Chinese officials have Unidentified speaker [00:07:56-00:07:59 (3 sec)] opened a probed into these safety issues Unidentified speaker [00:07:59-00:08:02 (3 sec)] around the large model uh large language Unidentified speaker [00:08:02-00:08:05 (3 sec)] model developers including deepseek and Unidentified speaker [00:08:05-00:08:07 (2 sec)] moonshot and perhaps that's also hurting Unidentified speaker [00:08:07-00:08:09 (2 sec)] sentiment on that front. Now flip award Unidentified speaker [00:08:09-00:08:10 (1 sec)] and take a look at the currency space Unidentified speaker [00:08:10-00:08:13 (3 sec)] because the cautious mood ahead of the Unidentified speaker [00:08:13-00:08:15 (2 sec)] Trump she meeting also showing up in the Unidentified speaker [00:08:15-00:08:17 (2 sec)] Chinese yen which is here weakening by a Unidentified speaker [00:08:17-00:08:20 (3 sec)] tenth of a percent and interestingly we Unidentified speaker [00:08:20-00:08:22 (2 sec)] are also seeing PBOC a fixing on the Unidentified speaker [00:08:22-00:08:25 (3 sec)] weaker side of things for the first time Unidentified speaker [00:08:25-00:08:28 (3 sec)] in 11 sessions. So that perhaps also Unidentified speaker [00:08:28-00:08:30 (2 sec)] that tells you a little bit about that Unidentified speaker [00:08:30-00:08:32 (2 sec)] cautious mood as well. Now the Japanese Unidentified speaker [00:08:32-00:08:35 (3 sec)] yen um weakening for a fourth session on Unidentified speaker [00:08:35-00:08:37 (2 sec)] the backdrop of a slightly stronger Unidentified speaker [00:08:37-00:08:40 (3 sec)] dollar but again um yen pretty Unidentified speaker [00:08:40-00:08:42 (2 sec)] vulnerable during the holiday as we're Unidentified speaker [00:08:42-00:08:44 (2 sec)] expecting the market to reopen from Unidentified speaker [00:08:44-00:08:46 (2 sec)] tomorrow. Overall Asia bonds being Unidentified speaker [00:08:46-00:08:48 (2 sec)] supported by the lower oil prices. Back Unidentified speaker [00:08:48-00:08:51 (3 sec)] to you Unidentified speaker [00:08:51-00:08:52 (1 sec)] >> Winnie. Thanks so much. That's been 20 Unidentified speaker [00:08:52-00:08:55 (3 sec)] there in Hong Kong. Now, ECB governing Unidentified speaker [00:08:55-00:08:57 (2 sec)] council member Yokim Nagel says the Unidentified speaker [00:08:57-00:08:59 (2 sec)] European Central Bank may have to raise Unidentified speaker [00:08:59-00:09:01 (2 sec)] interest rates to a level at which they Unidentified speaker [00:09:01-00:09:03 (2 sec)] hold back economic growth. Let's bring Unidentified speaker [00:09:03-00:09:05 (2 sec)] in Bloomberg's Mive's trash Mark Unidentified speaker [00:09:05-00:09:08 (3 sec)] Cranfield for more on this. Mark, so we Unidentified speaker [00:09:08-00:09:11 (3 sec)] have Naggle calling for vigilance. The Unidentified speaker [00:09:11-00:09:12 (1 sec)] same time Morgan Stanley saying Unidentified speaker [00:09:12-00:09:14 (2 sec)] investors should fade bets of an ECB Unidentified speaker [00:09:14-00:09:18 (4 sec)] hike in October. Talk us through how Unidentified speaker [00:09:18-00:09:20 (2 sec)] traders are positioning for the outlook Unidentified speaker [00:09:20-00:09:23 (3 sec)] for the ECB. Unidentified speaker [00:09:23-00:09:24 (1 sec)] Uh I don't think traders will be taking Unidentified speaker [00:09:24-00:09:26 (2 sec)] a whole lot of notice of either of those Unidentified speaker [00:09:26-00:09:28 (2 sec)] things really. I mean nobody is going to Unidentified speaker [00:09:28-00:09:30 (2 sec)] be surprised that a member of the Bundes Unidentified speaker [00:09:30-00:09:33 (3 sec)] Bank is hawkish on European rates. That Unidentified speaker [00:09:33-00:09:35 (2 sec)] would be a pretty typical scenario. And Unidentified speaker [00:09:35-00:09:37 (2 sec)] in terms of pricing for October, they Unidentified speaker [00:09:37-00:09:38 (1 sec)] don't traders don't have a high Unidentified speaker [00:09:38-00:09:40 (2 sec)] conviction anyway. It's a coin toss at Unidentified speaker [00:09:40-00:09:41 (1 sec)] the moment and those things are moving Unidentified speaker [00:09:41-00:09:43 (2 sec)] around all the time. Where they do have Unidentified speaker [00:09:43-00:09:45 (2 sec)] a stronger conviction is for December. Unidentified speaker [00:09:45-00:09:47 (2 sec)] And that's pretty much the same as they Unidentified speaker [00:09:47-00:09:49 (2 sec)] have for the Federal Reserve. Traders do Unidentified speaker [00:09:49-00:09:50 (1 sec)] expect that the European Central Bank Unidentified speaker [00:09:50-00:09:53 (3 sec)] will go by December for another 25 basis Unidentified speaker [00:09:53-00:09:55 (2 sec)] points. And that's a lot to do with what Unidentified speaker [00:09:55-00:09:57 (2 sec)] Philip Lane had to say this week. He is Unidentified speaker [00:09:57-00:09:59 (2 sec)] the economist and he's been talking that Unidentified speaker [00:09:59-00:10:00 (1 sec)] inflation is probably going to stay Unidentified speaker [00:10:00-00:10:02 (2 sec)] around that 3% level or maybe even a bit Unidentified speaker [00:10:02-00:10:04 (2 sec)] higher for quite an extended period. Unidentified speaker [00:10:04-00:10:06 (2 sec)] That is a problem for the European Unidentified speaker [00:10:06-00:10:08 (2 sec)] Central Bank and that's why traders do Unidentified speaker [00:10:08-00:10:10 (2 sec)] think by the end of the year both the Unidentified speaker [00:10:10-00:10:12 (2 sec)] ECB and the Federal Reserve will Unidentified speaker [00:10:12-00:10:14 (2 sec)] probably need to raise rates again. more Unidentified speaker [00:10:14-00:10:16 (2 sec)] interestingly is what happens next year Unidentified speaker [00:10:16-00:10:18 (2 sec)] because traders are actually pricing in Unidentified speaker [00:10:18-00:10:19 (1 sec)] three interest rate hikes from the Unidentified speaker [00:10:19-00:10:21 (2 sec)] European Central Bank. Now, that may be Unidentified speaker [00:10:21-00:10:23 (2 sec)] a bit on the excessive side and that Unidentified speaker [00:10:23-00:10:25 (2 sec)] could be where there's room to do some Unidentified speaker [00:10:25-00:10:27 (2 sec)] fading. Not so much for October, but if Unidentified speaker [00:10:27-00:10:30 (3 sec)] you look into next year to go pricing Unidentified speaker [00:10:30-00:10:32 (2 sec)] that aggressively could be too much, but Unidentified speaker [00:10:32-00:10:34 (2 sec)] in the meantime, nothing too much is Unidentified speaker [00:10:34-00:10:36 (2 sec)] going to change straight away. But it Unidentified speaker [00:10:36-00:10:38 (2 sec)] does look as though December is when Unidentified speaker [00:10:38-00:10:40 (2 sec)] people really think the ECB will raise Unidentified speaker [00:10:40-00:10:43 (3 sec)] interest rates again. Unidentified speaker [00:10:43-00:10:44 (1 sec)] Yeah, indeed. We're going to get the Unidentified speaker [00:10:44-00:10:46 (2 sec)] latest European PMI figures out this Unidentified speaker [00:10:46-00:10:48 (2 sec)] morning. Of course, questions about how Unidentified speaker [00:10:48-00:10:50 (2 sec)] energy prices are going to feed into the Unidentified speaker [00:10:50-00:10:52 (2 sec)] outlook for central banks very much in Unidentified speaker [00:10:52-00:10:53 (1 sec)] question, as you say, not just for the Unidentified speaker [00:10:53-00:10:56 (3 sec)] ECB, but we've also had Thomas Barkin Unidentified speaker [00:10:56-00:10:57 (1 sec)] from the Fed warning about the Unidentified speaker [00:10:57-00:10:59 (2 sec)] persistence of inflationary pressures or Unidentified speaker [00:10:59-00:11:01 (2 sec)] the risk that they will take some time Unidentified speaker [00:11:01-00:11:12 (11 sec)] to ease. Unidentified speaker [00:11:12-00:11:13 (1 sec)] Mark, I'm not sure if you can still hear Unidentified speaker [00:11:13-00:11:14 (1 sec)] me there, but I wonder what your take Unidentified speaker [00:11:14-00:11:17 (3 sec)] would be on the uh challenges facing the Unidentified speaker [00:11:17-00:11:19 (2 sec)] European economy given the higher energy Unidentified speaker [00:11:19-00:11:21 (2 sec)] prices situation and I suppose what Unidentified speaker [00:11:21-00:11:23 (2 sec)] might be illustrated in those PMIs this Unidentified speaker [00:11:23-00:11:25 (2 sec)] morning. Unidentified speaker [00:11:25-00:11:27 (2 sec)] >> Yeah, definitely. I mean, that is a Unidentified speaker [00:11:27-00:11:28 (1 sec)] problem that's going to go on for an Unidentified speaker [00:11:28-00:11:30 (2 sec)] extended period of time. I mean, as Unidentified speaker [00:11:30-00:11:32 (2 sec)] we've had some very detailed stories Unidentified speaker [00:11:32-00:11:34 (2 sec)] here on Bloomberg recently about gas Unidentified speaker [00:11:34-00:11:35 (1 sec)] prices in particular, that's a real Unidentified speaker [00:11:35-00:11:37 (2 sec)] headache for Europe, possibly even more Unidentified speaker [00:11:37-00:11:40 (3 sec)] so than oil prices, and it doesn't seem Unidentified speaker [00:11:40-00:11:41 (1 sec)] to be an easy solution for that. There's Unidentified speaker [00:11:41-00:11:44 (3 sec)] a lot of infrastructure issues which are Unidentified speaker [00:11:44-00:11:47 (3 sec)] going to keep gas prices extremely high. Unidentified speaker [00:11:47-00:11:48 (1 sec)] And you add into that, you have the Unidentified speaker [00:11:48-00:11:50 (2 sec)] difficulties of trying to get the French Unidentified speaker [00:11:50-00:11:53 (3 sec)] budget through before April's Unidentified speaker [00:11:53-00:11:55 (2 sec)] presidential elections next year, and Unidentified speaker [00:11:55-00:11:56 (1 sec)] that's going to keep bond yields high Unidentified speaker [00:11:56-00:11:58 (2 sec)] anyway. So you've got this double whammy Unidentified speaker [00:11:58-00:12:00 (2 sec)] here for investors. They're worried Unidentified speaker [00:12:00-00:12:02 (2 sec)] about inflation, energy costs. They're Unidentified speaker [00:12:02-00:12:04 (2 sec)] also worried about the bond market Unidentified speaker [00:12:04-00:12:06 (2 sec)] because France is going to have a real Unidentified speaker [00:12:06-00:12:08 (2 sec)] fight to get that budget agreed. And Unidentified speaker [00:12:08-00:12:10 (2 sec)] then there's going to be uncertainty all Unidentified speaker [00:12:10-00:12:12 (2 sec)] the way through to April next year. That Unidentified speaker [00:12:12-00:12:14 (2 sec)] will keep a a premium in terms of the Unidentified speaker [00:12:14-00:12:16 (2 sec)] spreads between France and the rest of Unidentified speaker [00:12:16-00:12:18 (2 sec)] the European markets as well. So there's Unidentified speaker [00:12:18-00:12:20 (2 sec)] no end in sight really for people who Unidentified speaker [00:12:20-00:12:22 (2 sec)] are concerned about what happens in the Unidentified speaker [00:12:22-00:12:24 (2 sec)] debt market in Europe. And once again, Unidentified speaker [00:12:24-00:12:26 (2 sec)] France is right at the center of that. Unidentified speaker [00:12:26-00:12:28 (2 sec)] So no easy solution in the near term. Unidentified speaker [00:12:28-00:12:30 (2 sec)] That will keep the euro under pressure Unidentified speaker [00:12:30-00:12:32 (2 sec)] as well. And so you can expect that Unidentified speaker [00:12:32-00:12:34 (2 sec)] European assets in general will probably Unidentified speaker [00:12:34-00:12:36 (2 sec)] be underperforming what you see in the Unidentified speaker [00:12:36-00:12:38 (2 sec)] US and especially in Asia where there's Unidentified speaker [00:12:38-00:12:40 (2 sec)] a much more optimistic outlook at the Unidentified speaker [00:12:40-00:12:41 (1 sec)] moment. Unidentified speaker [00:12:41-00:12:43 (2 sec)] >> Okay, Mark Cranfield, Markets Live Unidentified speaker [00:12:43-00:12:44 (1 sec)] Strategist. Thank you very much for Unidentified speaker [00:12:44-00:12:47 (3 sec)] joining us. Well, still ahead, will so Unidentified speaker [00:12:47-00:12:49 (2 sec)] those surging energy prices we've just Unidentified speaker [00:12:49-00:12:50 (1 sec)] been discussing hit momentum across Unidentified speaker [00:12:50-00:12:52 (2 sec)] Europe. We'll be looking ahead to this Unidentified speaker [00:12:52-00:12:54 (2 sec)] morning's key economic update with ING Unidentified speaker [00:12:54-00:12:58 (4 sec)] senior economist Charlotte de Melier. Unidentified speaker [00:12:58-00:13:00 (2 sec)] But first, a key vote in the Swiss Unidentified speaker [00:13:00-00:13:02 (2 sec)] Parliament with UBS signaling the chance Unidentified speaker [00:13:02-00:13:04 (2 sec)] for compromise after years of argument Unidentified speaker [00:13:04-00:13:07 (3 sec)] over capital rules. That's next. This is Unidentified speaker [00:13:07-00:13:23 (16 sec)] Bloomberg. Unidentified speaker [00:13:23-00:13:26 (3 sec)] [music] Unidentified speaker [00:13:26-00:13:27 (1 sec)] Welcome back to Bloomberg Daybreak Unidentified speaker [00:13:27-00:13:29 (2 sec)] Europe. Now, the long-running Unidentified speaker [00:13:29-00:13:31 (2 sec)] controversy over Swiss capital Unidentified speaker [00:13:31-00:13:33 (2 sec)] requirements faces a key parliamentary Unidentified speaker [00:13:33-00:13:35 (2 sec)] vote later today. It's been rumbling Unidentified speaker [00:13:35-00:13:37 (2 sec)] since the credit Swiss crisis in 2023. Unidentified speaker [00:13:37-00:13:39 (2 sec)] Let's bring in Bloomberg's Stephen Arens Unidentified speaker [00:13:39-00:13:41 (2 sec)] for more who leads our European finance Unidentified speaker [00:13:41-00:13:43 (2 sec)] coverage. Stephen, the Swiss upper house Unidentified speaker [00:13:43-00:13:46 (3 sec)] is set to vote on three proposals today. Unidentified speaker [00:13:46-00:13:49 (3 sec)] What are we expecting? Unidentified speaker [00:13:49-00:13:50 (1 sec)] So, you're right. There's three Unidentified speaker [00:13:50-00:13:53 (3 sec)] proposals on the table. Um, one is very Unidentified speaker [00:13:53-00:13:55 (2 sec)] burdensome on UBS. That's the one that Unidentified speaker [00:13:55-00:13:58 (3 sec)] the government wants to uh turn into Unidentified speaker [00:13:58-00:14:00 (2 sec)] law. And then there's two others. one is Unidentified speaker [00:14:00-00:14:02 (2 sec)] slightly less honorous on UBS and one Unidentified speaker [00:14:02-00:14:04 (2 sec)] that's the one that UBS is supporting Unidentified speaker [00:14:04-00:14:06 (2 sec)] would is considered to be the least Unidentified speaker [00:14:06-00:14:08 (2 sec)] costly one for the bank. Um and it's Unidentified speaker [00:14:08-00:14:10 (2 sec)] going to be a crucial vote to see which Unidentified speaker [00:14:10-00:14:13 (3 sec)] one of these three the lawmakers will um Unidentified speaker [00:14:13-00:14:14 (1 sec)] support today. Unidentified speaker [00:14:14-00:14:16 (2 sec)] >> Now we heard from UBS a little bit Unidentified speaker [00:14:16-00:14:19 (3 sec)] earlier in the week supporting this Unidentified speaker [00:14:19-00:14:22 (3 sec)] option that relies more on AT1s as you Unidentified speaker [00:14:22-00:14:25 (3 sec)] say. What do the prospects of success Unidentified speaker [00:14:25-00:14:27 (2 sec)] look like? And and is this an important Unidentified speaker [00:14:27-00:14:29 (2 sec)] signal that the bank is supporting one Unidentified speaker [00:14:29-00:14:31 (2 sec)] in terms of looking for compromise on Unidentified speaker [00:14:31-00:14:35 (4 sec)] what has been a very thorny issue? Unidentified speaker [00:14:35-00:14:37 (2 sec)] >> Yes. So you're right. The bank is now Unidentified speaker [00:14:37-00:14:40 (3 sec)] ready to say that this AT1 proposal is Unidentified speaker [00:14:40-00:14:42 (2 sec)] the one that they want to see uh be Unidentified speaker [00:14:42-00:14:44 (2 sec)] turned into law. Uh again, it's the one Unidentified speaker [00:14:44-00:14:46 (2 sec)] that's least ownorous on the bank and so Unidentified speaker [00:14:46-00:14:48 (2 sec)] they are throwing the weight behind it. Unidentified speaker [00:14:48-00:14:51 (3 sec)] It's a bit of a coin toss at this point Unidentified speaker [00:14:51-00:14:53 (2 sec)] which one will prevail in parliament in Unidentified speaker [00:14:53-00:14:56 (3 sec)] the upper house of parliament today. Um Unidentified speaker [00:14:56-00:14:59 (3 sec)] there um each one has backing from Unidentified speaker [00:14:59-00:15:02 (3 sec)] several factions in the chamber and so Unidentified speaker [00:15:02-00:15:04 (2 sec)] it's really impossible to say at this Unidentified speaker [00:15:04-00:15:05 (1 sec)] point which one will be the one that Unidentified speaker [00:15:05-00:15:08 (3 sec)] they uh the majority of the upper house Unidentified speaker [00:15:08-00:15:10 (2 sec)] will support today. Unidentified speaker [00:15:10-00:15:12 (2 sec)] >> What's been the broader investor Unidentified speaker [00:15:12-00:15:14 (2 sec)] sentiment regarding this debate? because Unidentified speaker [00:15:14-00:15:16 (2 sec)] it has as we say been running uh for Unidentified speaker [00:15:16-00:15:18 (2 sec)] years but coming to a head now with Unidentified speaker [00:15:18-00:15:20 (2 sec)] major implications for the Swiss banking Unidentified speaker [00:15:20-00:15:22 (2 sec)] sector. Unidentified speaker [00:15:22-00:15:25 (3 sec)] >> Indeed indeed it's this particular Unidentified speaker [00:15:25-00:15:27 (2 sec)] prospect of higher capital coins on UBS Unidentified speaker [00:15:27-00:15:29 (2 sec)] has been weighing on its share price for Unidentified speaker [00:15:29-00:15:32 (3 sec)] at least 2 years now. Um investors are Unidentified speaker [00:15:32-00:15:35 (3 sec)] concerned that this would make UBS less Unidentified speaker [00:15:35-00:15:37 (2 sec)] profitable um because it would need it Unidentified speaker [00:15:37-00:15:40 (3 sec)] would raise its requirement to add Unidentified speaker [00:15:40-00:15:42 (2 sec)] capital um and that makes it less Unidentified speaker [00:15:42-00:15:44 (2 sec)] profitable. So, it's a it's a real Unidentified speaker [00:15:44-00:15:46 (2 sec)] concern for investors and everyone, you Unidentified speaker [00:15:46-00:15:48 (2 sec)] know, the investor community and the Unidentified speaker [00:15:48-00:15:51 (3 sec)] bank itself, obviously. Uh very um Unidentified speaker [00:15:51-00:15:54 (3 sec)] concerned about an outcome that would be Unidentified speaker [00:15:54-00:15:57 (3 sec)] too much for the bank. Unidentified speaker [00:15:57-00:15:58 (1 sec)] >> Okay. And this won't be the end of the Unidentified speaker [00:15:58-00:15:59 (1 sec)] story either. There's another vote to Unidentified speaker [00:15:59-00:16:01 (2 sec)] come in the lower house after today's Unidentified speaker [00:16:01-00:16:02 (1 sec)] vote in the upper house. But Stephen Unidentified speaker [00:16:02-00:16:03 (1 sec)] Arens, thank you very much for joining Unidentified speaker [00:16:03-00:16:05 (2 sec)] us and bringing us up to date uh with Unidentified speaker [00:16:05-00:16:07 (2 sec)] the latest as we watch for the outcome Unidentified speaker [00:16:07-00:16:09 (2 sec)] of that parliamentary vote in Unidentified speaker [00:16:09-00:16:11 (2 sec)] Switzerland. Unidentified speaker [00:16:11-00:16:13 (2 sec)] Now to some corporate news. Bloomberg Unidentified speaker [00:16:13-00:16:15 (2 sec)] has learned that SoftBank is offering Unidentified speaker [00:16:15-00:16:17 (2 sec)] record yields to entice investors to Unidentified speaker [00:16:17-00:16:19 (2 sec)] what's set to be one of the largest Unidentified speaker [00:16:19-00:16:21 (2 sec)] corporate junk bond sales ever. The Unidentified speaker [00:16:21-00:16:24 (3 sec)] group aims to raise more than 11 billion Unidentified speaker [00:16:24-00:16:26 (2 sec)] in the offering that includes a $10 Unidentified speaker [00:16:26-00:16:30 (4 sec)] billion part and a $1 billion portion. Unidentified speaker [00:16:30-00:16:33 (3 sec)] Understands that yields of up to 9.875% Unidentified speaker [00:16:33-00:16:37 (4 sec)] are being offered on the dollar portion. Unidentified speaker [00:16:37-00:16:39 (2 sec)] Anthropic has unveiled a new AI model Unidentified speaker [00:16:39-00:16:42 (3 sec)] called Claude Opus 5.5. The company says Unidentified speaker [00:16:42-00:16:44 (2 sec)] it delivers performance similar to the Unidentified speaker [00:16:44-00:16:47 (3 sec)] more advanced Fable 5.1 at a Unidentified speaker [00:16:47-00:16:49 (2 sec)] significantly lower cost. The release Unidentified speaker [00:16:49-00:16:51 (2 sec)] comes as Anthropic prepares for a public Unidentified speaker [00:16:51-00:16:53 (2 sec)] listing and looks to gain ground against Unidentified speaker [00:16:53-00:16:57 (4 sec)] rivals including OpenAI and Google. Unidentified speaker [00:16:57-00:16:59 (2 sec)] And Bloomberg has learned Apple is Unidentified speaker [00:16:59-00:17:01 (2 sec)] developing a screenless health and Unidentified speaker [00:17:01-00:17:03 (2 sec)] fitness tracker similar to the Unidentified speaker [00:17:03-00:17:05 (2 sec)] wristwatch device made by Whoop. We're Unidentified speaker [00:17:05-00:17:07 (2 sec)] told the project has support from top Unidentified speaker [00:17:07-00:17:09 (2 sec)] executives, but Apple hasn't decided Unidentified speaker [00:17:09-00:17:12 (3 sec)] whether to release it. If it goes ahead, Unidentified speaker [00:17:12-00:17:14 (2 sec)] the device likely won't debut before Unidentified speaker [00:17:14-00:17:17 (3 sec)] 2028. Unidentified speaker [00:17:17-00:17:18 (1 sec)] And Apollo is capping withdrawals from Unidentified speaker [00:17:18-00:17:22 (4 sec)] its 26 billion private credit fund for a Unidentified speaker [00:17:22-00:17:24 (2 sec)] third straight quarter after investors Unidentified speaker [00:17:24-00:17:27 (3 sec)] sought to pull almost 15% of outstanding Unidentified speaker [00:17:27-00:17:29 (2 sec)] shares. A letter to shareholders stated Unidentified speaker [00:17:29-00:17:32 (3 sec)] the limit will remain at 5%. Black Unidentified speaker [00:17:32-00:17:33 (1 sec)] Rockck and Cliff Water have also Unidentified speaker [00:17:33-00:17:35 (2 sec)] continued to restrict withdrawals from Unidentified speaker [00:17:35-00:17:39 (4 sec)] their private credit funds. Unidentified speaker [00:17:39-00:17:41 (2 sec)] Now, coming up, President Zilinski says Unidentified speaker [00:17:41-00:17:43 (2 sec)] Ukraine is ready [music] for an energy Unidentified speaker [00:17:43-00:17:46 (3 sec)] ceasefire if Russian forces stop Unidentified speaker [00:17:46-00:17:48 (2 sec)] attacking its facilities. We'll have the Unidentified speaker [00:17:48-00:17:57 (9 sec)] details next. This is Bloomberg. Unidentified speaker [00:17:57-00:18:05 (8 sec)] [music] Unidentified speaker [00:18:05-00:18:07 (2 sec)] Welcome back to Bloomberg Daybreak Unidentified speaker [00:18:07-00:18:09 (2 sec)] Europe. President Zilinski says Ukraine Unidentified speaker [00:18:09-00:18:12 (3 sec)] is ready for an energy ceasefire if Unidentified speaker [00:18:12-00:18:14 (2 sec)] Russian forces stop attacking its power Unidentified speaker [00:18:14-00:18:16 (2 sec)] and water systems. He met President Unidentified speaker [00:18:16-00:18:18 (2 sec)] Trump after the US leader again called Unidentified speaker [00:18:18-00:18:21 (3 sec)] for an end to the war during his speech Unidentified speaker [00:18:21-00:18:24 (3 sec)] to the UN General Assembly. Donald Trump [00:18:24-00:18:26 (2 sec)] We continue to seek and end the Donald Trump [00:18:26-00:18:29 (3 sec)] disastrous war between Russia and Donald Trump [00:18:29-00:18:32 (3 sec)] Ukraine which is killing, as I said, Donald Trump [00:18:32-00:18:35 (3 sec)] thousands and thousands of people every Donald Trump [00:18:35-00:18:37 (2 sec)] month. Last week, in honor of Senator Donald Trump [00:18:37-00:18:40 (3 sec)] Lindsey Graeme, I signed a powerful new Donald Trump [00:18:40-00:18:42 (2 sec)] law passed by Congress providing me with Donald Trump [00:18:42-00:18:45 (3 sec)] enormous new tariff authorities, and if Donald Trump [00:18:45-00:18:48 (3 sec)] necessary, I will have to use them. It's Donald Trump [00:18:48-00:18:52 (4 sec)] time to stop the killing. Unidentified speaker [00:18:52-00:18:54 (2 sec)] >> Our chief of correspondent Oliver Crook Unidentified speaker [00:18:54-00:18:57 (3 sec)] is here for more on this story. Oliver, Unidentified speaker [00:18:57-00:18:58 (1 sec)] we've been talking about sustained Unidentified speaker [00:18:58-00:19:00 (2 sec)] energy attacks by Russia and Ukraine on Unidentified speaker [00:19:00-00:19:03 (3 sec)] energy facilities in recent weeks. So, Unidentified speaker [00:19:03-00:19:05 (2 sec)] was there any progress from the meeting Unidentified speaker [00:19:05-00:19:06 (1 sec)] between Presidents Trump and Zilinski? Unidentified speaker [00:19:06-00:19:08 (2 sec)] >> Well, certainly for Zilinsky, this was a Unidentified speaker [00:19:08-00:19:09 (1 sec)] positive meeting, it seems, with the Unidentified speaker [00:19:09-00:19:11 (2 sec)] president of the United States made some Unidentified speaker [00:19:11-00:19:13 (2 sec)] progress on some of the key issues. We Unidentified speaker [00:19:13-00:19:15 (2 sec)] did not get this sort of a ceasefire or Unidentified speaker [00:19:15-00:19:16 (1 sec)] the sort of energy ceasefire that was Unidentified speaker [00:19:16-00:19:18 (2 sec)] potentially going to be discussed there Unidentified speaker [00:19:18-00:19:20 (2 sec)] between the two of them. But we did get Unidentified speaker [00:19:20-00:19:21 (1 sec)] this idea from President Trump, Unidentified speaker [00:19:21-00:19:22 (1 sec)] according to Zalinsky, that he's not Unidentified speaker [00:19:22-00:19:24 (2 sec)] actually asking for a unilateral ceasing Unidentified speaker [00:19:24-00:19:27 (3 sec)] on the Ukrainian side of energy Unidentified speaker [00:19:27-00:19:28 (1 sec)] infrastructure strikes, but that Unidentified speaker [00:19:28-00:19:29 (1 sec)] Zalinsky and the Ukrainians would be Unidentified speaker [00:19:29-00:19:31 (2 sec)] willing to put a halt on those strikes Unidentified speaker [00:19:31-00:19:32 (1 sec)] that have brought, you know, part of the Unidentified speaker [00:19:32-00:19:34 (2 sec)] pressure onto the diesel market across Unidentified speaker [00:19:34-00:19:35 (1 sec)] the world, which obviously is a big Unidentified speaker [00:19:35-00:19:37 (2 sec)] concern for the president of the United Unidentified speaker [00:19:37-00:19:38 (1 sec)] States. So that was one of the sort of Unidentified speaker [00:19:38-00:19:40 (2 sec)] big conversations there between those Unidentified speaker [00:19:40-00:19:41 (1 sec)] two men. There was another conversation Unidentified speaker [00:19:41-00:19:43 (2 sec)] also about this idea of licensing of the Unidentified speaker [00:19:43-00:19:44 (1 sec)] Patriot missiles and being able to Unidentified speaker [00:19:44-00:19:46 (2 sec)] create those domestically within Unidentified speaker [00:19:46-00:19:48 (2 sec)] Ukraine. Zilinsky sounded positive about Unidentified speaker [00:19:48-00:19:49 (1 sec)] that. He said that they could be Unidentified speaker [00:19:49-00:19:51 (2 sec)] building them in Ukraine as soon as a Unidentified speaker [00:19:51-00:19:52 (1 sec)] year and a year and a half from now. Unidentified speaker [00:19:52-00:19:54 (2 sec)] That's obviously fundamentally crucial Unidentified speaker [00:19:54-00:19:56 (2 sec)] right now when the Ukrainians are Unidentified speaker [00:19:56-00:19:57 (1 sec)] obviously trying to get these Russian Unidentified speaker [00:19:57-00:19:59 (2 sec)] cruise missiles out of the sky have Unidentified speaker [00:19:59-00:20:01 (2 sec)] effectively very very low supply of Unidentified speaker [00:20:01-00:20:02 (1 sec)] those Patriot batteries and there's no Unidentified speaker [00:20:02-00:20:04 (2 sec)] supply in the world because there are Unidentified speaker [00:20:04-00:20:05 (1 sec)] too many wars going on. The Europeans Unidentified speaker [00:20:05-00:20:07 (2 sec)] don't have anymore and that is going to Unidentified speaker [00:20:07-00:20:08 (1 sec)] be the big problem for the Ukraine. So Unidentified speaker [00:20:08-00:20:10 (2 sec)] positive meeting overall. I think that Unidentified speaker [00:20:10-00:20:11 (1 sec)] also for the United States, what we're Unidentified speaker [00:20:11-00:20:13 (2 sec)] also seeing is that opening for Unidentified speaker [00:20:13-00:20:15 (2 sec)] diplomatic talks between the Russians Unidentified speaker [00:20:15-00:20:17 (2 sec)] and the United States. We expect Lavrov, Unidentified speaker [00:20:17-00:20:18 (1 sec)] the Russian foreign minister, to meet Unidentified speaker [00:20:18-00:20:20 (2 sec)] with Marco Rubio, the US Secretary of Unidentified speaker [00:20:20-00:20:21 (1 sec)] State at the UNGA a little bit later Unidentified speaker [00:20:21-00:20:23 (2 sec)] today. And that follows all this flurry Unidentified speaker [00:20:23-00:20:25 (2 sec)] of activity from Kushner, Whitov, Unidentified speaker [00:20:25-00:20:27 (2 sec)] Ratcliffe, all speaking with the Unidentified speaker [00:20:27-00:20:28 (1 sec)] Russians. And we heard from Alexander Unidentified speaker [00:20:28-00:20:30 (2 sec)] Stub yesterday that this might be a Unidentified speaker [00:20:30-00:20:31 (1 sec)] moment because the Russians are under Unidentified speaker [00:20:31-00:20:33 (2 sec)] pressure obviously um in terms of the Unidentified speaker [00:20:33-00:20:34 (1 sec)] economy and the diesel prices and that Unidentified speaker [00:20:34-00:20:36 (2 sec)] sort of thing. But Alexander Stub saying Unidentified speaker [00:20:36-00:20:38 (2 sec)] that the sort of killing ratio on the Unidentified speaker [00:20:38-00:20:40 (2 sec)] battlefield in Ukraine with the Russians Unidentified speaker [00:20:40-00:20:42 (2 sec)] is 5 to1. I.e. for every lost Ukrainian Unidentified speaker [00:20:42-00:20:44 (2 sec)] soldier the Russians are suffering five Unidentified speaker [00:20:44-00:20:46 (2 sec)] and that may be putting the pressure Unidentified speaker [00:20:46-00:20:47 (1 sec)] forward for the Russians. Unidentified speaker [00:20:47-00:20:48 (1 sec)] >> Yeah. The Finnish president Alexander Unidentified speaker [00:20:48-00:20:50 (2 sec)] speaking to Bloomberg at the UN General Unidentified speaker [00:20:50-00:20:52 (2 sec)] Assembly. In New York though there was Unidentified speaker [00:20:52-00:20:53 (1 sec)] also we're told a tense meeting between Unidentified speaker [00:20:53-00:20:55 (2 sec)] the European Commission President Ursula Unidentified speaker [00:20:55-00:20:58 (3 sec)] Vanderline and Vladimir Zalinski as Unidentified speaker [00:20:58-00:20:59 (1 sec)] well. What's an at issue there? Unidentified speaker [00:20:59-00:21:01 (2 sec)] >> Yeah. So basically this is about the Unidentified speaker [00:21:01-00:21:03 (2 sec)] sort of reforms within Ukraine that need Unidentified speaker [00:21:03-00:21:05 (2 sec)] to be sort of progressed forward not Unidentified speaker [00:21:05-00:21:06 (1 sec)] just to get some of the money released Unidentified speaker [00:21:06-00:21:08 (2 sec)] and that is what the uh the EU was Unidentified speaker [00:21:08-00:21:10 (2 sec)] talking about was in order to get more Unidentified speaker [00:21:10-00:21:11 (1 sec)] and more of this money released we need Unidentified speaker [00:21:11-00:21:13 (2 sec)] to see progress on rule of law we need Unidentified speaker [00:21:13-00:21:15 (2 sec)] to see uh progress on anti-corruption we Unidentified speaker [00:21:15-00:21:16 (1 sec)] need to see progress in all of these Unidentified speaker [00:21:16-00:21:18 (2 sec)] other domains to get higher tax revenues Unidentified speaker [00:21:18-00:21:21 (3 sec)] within Ukraine you know cringing down on Unidentified speaker [00:21:21-00:21:23 (2 sec)] the shadow economy all of those sorts of Unidentified speaker [00:21:23-00:21:25 (2 sec)] things and sort of sort of reminding the Unidentified speaker [00:21:25-00:21:27 (2 sec)] Ukraines that there are still strings Unidentified speaker [00:21:27-00:21:28 (1 sec)] attached to some of this money and of Unidentified speaker [00:21:28-00:21:29 (1 sec)] course this is the money that has kept Unidentified speaker [00:21:29-00:21:31 (2 sec)] the Ukraine in the game that will keep Unidentified speaker [00:21:31-00:21:33 (2 sec)] Ukraine in the game um for the coming Unidentified speaker [00:21:33-00:21:35 (2 sec)] sort of of years. But it also is a Unidentified speaker [00:21:35-00:21:36 (1 sec)] reminder that the Europeans do have a Unidentified speaker [00:21:36-00:21:38 (2 sec)] certain limit to what they can do. And Unidentified speaker [00:21:38-00:21:39 (1 sec)] it's sort of epitomized I think by the Unidentified speaker [00:21:39-00:21:41 (2 sec)] fact that the biggest financial backer Unidentified speaker [00:21:41-00:21:43 (2 sec)] to the Ukrainians uh the Germans uh Unidentified speaker [00:21:43-00:21:45 (2 sec)] Friedick Mertz is not present at the Unidentified speaker [00:21:45-00:21:47 (2 sec)] UNGA because he is under such intense Unidentified speaker [00:21:47-00:21:49 (2 sec)] political pressure at home in part by Unidentified speaker [00:21:49-00:21:51 (2 sec)] the right-wing in Germany that wants to Unidentified speaker [00:21:51-00:21:53 (2 sec)] give zero funding to Ukraine. So that Unidentified speaker [00:21:53-00:21:55 (2 sec)] again sort of illustrates the stake for Unidentified speaker [00:21:55-00:21:57 (2 sec)] the Ukrainians and for and for Valinsky Unidentified speaker [00:21:57-00:21:59 (2 sec)] as he's talking to to Vanderline. Again, Unidentified speaker [00:21:59-00:22:00 (1 sec)] they're probably going to get this money Unidentified speaker [00:22:00-00:22:02 (2 sec)] dispersed, but this is about getting Unidentified speaker [00:22:02-00:22:04 (2 sec)] that money to them in a timely fashion. Unidentified speaker [00:22:04-00:22:05 (1 sec)] They have these budget issues and of Unidentified speaker [00:22:05-00:22:06 (1 sec)] course the question about whether or not Unidentified speaker [00:22:06-00:22:07 (1 sec)] they're going to be able to get it Unidentified speaker [00:22:07-00:22:09 (2 sec)] through the sum the winter uh amid all Unidentified speaker [00:22:09-00:22:10 (1 sec)] these attacks on that energy Unidentified speaker [00:22:10-00:22:11 (1 sec)] infrastructure. Unidentified speaker [00:22:11-00:22:13 (2 sec)] >> Yeah, indeed a crucial moment in that Unidentified speaker [00:22:13-00:22:14 (1 sec)] conflict. Oliver, for now, thank you our Unidentified speaker [00:22:14-00:22:16 (2 sec)] chief Europe correspondent Oliver Crook. Unidentified speaker [00:22:16-00:22:18 (2 sec)] Well, we mentioned there the Finnish Unidentified speaker [00:22:18-00:22:20 (2 sec)] president Alexander Stub calling for an Unidentified speaker [00:22:20-00:22:22 (2 sec)] agreement between Russia and Ukraine to Unidentified speaker [00:22:22-00:22:24 (2 sec)] try and stop the ongoing attacks on Unidentified speaker [00:22:24-00:22:26 (2 sec)] energy sites. Stub has said there was a Unidentified speaker [00:22:26-00:22:28 (2 sec)] need for a transactional deal. He spoke Unidentified speaker [00:22:28-00:22:32 (4 sec)] to Bloomberg at the UN General Assembly. Unidentified speaker [00:22:32-00:22:34 (2 sec)] If there was a partial ceasefire, then Unidentified speaker [00:22:34-00:22:36 (2 sec)] the message would probably be okay. If Unidentified speaker [00:22:36-00:22:39 (3 sec)] Ukraine doesn't hit oil refineries, then Unidentified speaker [00:22:39-00:22:42 (3 sec)] Russia should not hit energy and Unidentified speaker [00:22:42-00:22:44 (2 sec)] electricity installations in Ukraine, Unidentified speaker [00:22:44-00:22:47 (3 sec)] especially as winter is coming. So, you Unidentified speaker [00:22:47-00:22:49 (2 sec)] know, you can't it's 601, half a dozen Unidentified speaker [00:22:49-00:22:50 (1 sec)] of the other and has to be a Unidentified speaker [00:22:50-00:22:54 (4 sec)] transactional deal. Unidentified speaker [00:22:54-00:22:56 (2 sec)] Now, President Trump says the US will Unidentified speaker [00:22:56-00:22:58 (2 sec)] start building two military bases on Unidentified speaker [00:22:58-00:23:01 (3 sec)] Greenland after signing a security deal Unidentified speaker [00:23:01-00:23:03 (2 sec)] with Denmark and the Arctic Island. The Unidentified speaker [00:23:03-00:23:05 (2 sec)] agreement expands Washington's military Unidentified speaker [00:23:05-00:23:07 (2 sec)] role in Greenland while leaving it under Unidentified speaker [00:23:07-00:23:10 (3 sec)] Danish sovereignty. Unidentified speaker [00:23:10-00:23:12 (2 sec)] Bloomberg has learned Venezuelan Unidentified speaker [00:23:12-00:23:14 (2 sec)] opposition leader Maria Karina Machado Unidentified speaker [00:23:14-00:23:16 (2 sec)] tried three times in the past 24 hours Unidentified speaker [00:23:16-00:23:18 (2 sec)] to return home but was unable to Unidentified speaker [00:23:18-00:23:20 (2 sec)] complete the journey. The attempts came Unidentified speaker [00:23:20-00:23:22 (2 sec)] as acting President Deli Rodriguez Unidentified speaker [00:23:22-00:23:24 (2 sec)] visited New York for the United Nations Unidentified speaker [00:23:24-00:23:26 (2 sec)] General Assembly where she met US Unidentified speaker [00:23:26-00:23:29 (3 sec)] President Donald Trump. Unidentified speaker [00:23:29-00:23:32 (3 sec)] Well, coming up, today's flash PMI data Unidentified speaker [00:23:32-00:23:33 (1 sec)] is set to give an indication of how the Unidentified speaker [00:23:33-00:23:35 (2 sec)] prolonged energy shock is affecting Unidentified speaker [00:23:35-00:23:38 (3 sec)] Europe's economies. We'll get a sense of Unidentified speaker [00:23:38-00:23:40 (2 sec)] what to expect as we're also looking at Unidentified speaker [00:23:40-00:23:41 (1 sec)] the looming budget battle to [music] Unidentified speaker [00:23:41-00:23:43 (2 sec)] come in France. We'll be discussing that Unidentified speaker [00:23:43-00:23:48 (5 sec)] next. This is Bloomberg. Unidentified speaker [00:23:48-00:24:06 (18 sec)] [music] Unidentified speaker [00:24:06-00:24:13 (7 sec)] >> [music] Unidentified speaker [00:24:13-00:24:15 (2 sec)] [music] Unidentified speaker [00:24:15-00:24:17 (2 sec)] >> Live from Brussels, this is Bloomberg Unidentified speaker [00:24:17-00:24:19 (2 sec)] Daybreak Europe. I'm Steven Carroll with Unidentified speaker [00:24:19-00:24:21 (2 sec)] your top stories. Oil slides with Brent Unidentified speaker [00:24:21-00:24:23 (2 sec)] crude on track for its longest losing Unidentified speaker [00:24:23-00:24:26 (3 sec)] streak in a year after President Trump Unidentified speaker [00:24:26-00:24:29 (3 sec)] described talks with Iran as very good. Unidentified speaker [00:24:29-00:24:30 (1 sec)] And Saudi Arabia said it was restarting Unidentified speaker [00:24:30-00:24:33 (3 sec)] a key oil pipeline. Unidentified speaker [00:24:33-00:24:35 (2 sec)] Bundesbank President Yokim Nagel warns Unidentified speaker [00:24:35-00:24:37 (2 sec)] he can't rule out hiking ECB rates to a Unidentified speaker [00:24:37-00:24:39 (2 sec)] level that hits economic growth. We'll Unidentified speaker [00:24:39-00:24:41 (2 sec)] get an update on that growth this Unidentified speaker [00:24:41-00:24:43 (2 sec)] morning with the latest PMI data from Unidentified speaker [00:24:43-00:24:45 (2 sec)] across the continent. Unidentified speaker [00:24:45-00:24:46 (1 sec)] Plus, President Zilinski [music] says Unidentified speaker [00:24:46-00:24:49 (3 sec)] Ukraine is ready for an energy ceasefire Unidentified speaker [00:24:49-00:24:52 (3 sec)] if Russia stops attacks on its power and Unidentified speaker [00:24:52-00:24:54 (2 sec)] water infrastructure. Unidentified speaker [00:24:54-00:24:56 (2 sec)] Well, let's check in on how markets are Unidentified speaker [00:24:56-00:24:58 (2 sec)] trading this morning. We do have some Unidentified speaker [00:24:58-00:25:00 (2 sec)] moderate gains on the MSI as Asia Unidentified speaker [00:25:00-00:25:01 (1 sec)] Pacific index. Japanese markets are Unidentified speaker [00:25:01-00:25:03 (2 sec)] still closed for a holiday, but we are Unidentified speaker [00:25:03-00:25:05 (2 sec)] seeing the earlier momentum behind some Unidentified speaker [00:25:05-00:25:07 (2 sec)] of those AI trades slightly easing as we Unidentified speaker [00:25:07-00:25:08 (1 sec)] go further into the trading session. Unidentified speaker [00:25:08-00:25:09 (1 sec)] European stock futures are pointing Unidentified speaker [00:25:09-00:25:11 (2 sec)] higher though as well. And on Wall Unidentified speaker [00:25:11-00:25:12 (1 sec)] Street after the record finish on the Unidentified speaker [00:25:12-00:25:14 (2 sec)] NASDAQ yesterday, but the drop in S&P Unidentified speaker [00:25:14-00:25:16 (2 sec)] 500 financials as traders try to parse Unidentified speaker [00:25:16-00:25:18 (2 sec)] the latest AI developments. We do have Unidentified speaker [00:25:18-00:25:20 (2 sec)] S&P E- Mini futures slightly higher this Unidentified speaker [00:25:20-00:25:22 (2 sec)] morning. In terms of the energy prices, Unidentified speaker [00:25:22-00:25:23 (1 sec)] the other key board that we're watching Unidentified speaker [00:25:23-00:25:25 (2 sec)] for you today, we do have Brent crude Unidentified speaker [00:25:25-00:25:28 (3 sec)] lower this morning in trading as we are Unidentified speaker [00:25:28-00:25:29 (1 sec)] looking at the effects of both the Unidentified speaker [00:25:29-00:25:31 (2 sec)] diplomatic efforts and the practical Unidentified speaker [00:25:31-00:25:33 (2 sec)] restart of flows through that East West Unidentified speaker [00:25:33-00:25:35 (2 sec)] pipeline in Saudi Arabia. And focus for Unidentified speaker [00:25:35-00:25:36 (1 sec)] markets too. European gas futures coming Unidentified speaker [00:25:36-00:25:38 (2 sec)] down another 2%. That's the third day of Unidentified speaker [00:25:38-00:25:40 (2 sec)] declines on the TTF index and the Unidentified speaker [00:25:40-00:25:42 (2 sec)] Bloomberg dollar spot index Unidentified speaker [00:25:42-00:25:44 (2 sec)] strengthening further today. Bloomberg Unidentified speaker [00:25:44-00:25:45 (1 sec)] dollar spot index hitting its highest Unidentified speaker [00:25:45-00:25:49 (4 sec)] level since the end of July. Unidentified speaker [00:25:49-00:25:51 (2 sec)] Well, now later this morning we will get Unidentified speaker [00:25:51-00:25:52 (1 sec)] the latest PMI surveys for France, Unidentified speaker [00:25:52-00:25:55 (3 sec)] Germany, the UK and the wider Euro area Unidentified speaker [00:25:55-00:25:56 (1 sec)] which will give us an indication of how Unidentified speaker [00:25:56-00:25:58 (2 sec)] the recent spike in energy prices is Unidentified speaker [00:25:58-00:26:00 (2 sec)] affecting Europe's biggest economies. Unidentified speaker [00:26:00-00:26:02 (2 sec)] The French readings are expected to show Unidentified speaker [00:26:02-00:26:04 (2 sec)] weakness ahead of a fractious budget Unidentified speaker [00:26:04-00:26:07 (3 sec)] debate which will begin in earnest next Unidentified speaker [00:26:07-00:26:08 (1 sec)] week. Joining me now to discuss in the Unidentified speaker [00:26:08-00:26:10 (2 sec)] Brussels studio, Charlotte de Mel, Unidentified speaker [00:26:10-00:26:11 (1 sec)] senior economist at IMG Belgium. Great Unidentified speaker [00:26:11-00:26:12 (1 sec)] to have you with us this morning, Unidentified speaker [00:26:12-00:26:14 (2 sec)] Charlotte. Um, I want to start with this Unidentified speaker [00:26:14-00:26:17 (3 sec)] question of PMIs as well. We're looking Unidentified speaker [00:26:17-00:26:19 (2 sec)] at energy prices down, but still oil not Unidentified speaker [00:26:19-00:26:21 (2 sec)] far off $100 a barrel and these high Unidentified speaker [00:26:21-00:26:23 (2 sec)] levels, multi-month highs for gas prices Unidentified speaker [00:26:23-00:26:24 (1 sec)] as well. What are you expecting from the Unidentified speaker [00:26:24-00:26:25 (1 sec)] PMIs today? Unidentified speaker [00:26:25-00:26:27 (2 sec)] >> Yeah, I think the situation is worse Unidentified speaker [00:26:27-00:26:29 (2 sec)] than one month ago, right? So it means Unidentified speaker [00:26:29-00:26:31 (2 sec)] that PMIs will probably go down a bit. I Unidentified speaker [00:26:31-00:26:34 (3 sec)] don't expect a very big slowdown and Unidentified speaker [00:26:34-00:26:35 (1 sec)] that would be a surprise. If you would Unidentified speaker [00:26:35-00:26:38 (3 sec)] see PMIs going below 50 and that would Unidentified speaker [00:26:38-00:26:40 (2 sec)] definitely be a surprise. But clearly we Unidentified speaker [00:26:40-00:26:42 (2 sec)] can say that the sentiment in the Euro Unidentified speaker [00:26:42-00:26:44 (2 sec)] zone as a whole has worsened uh during Unidentified speaker [00:26:44-00:26:46 (2 sec)] the past few weeks. Uh clearly there Unidentified speaker [00:26:46-00:26:48 (2 sec)] there are much more risk on growth Unidentified speaker [00:26:48-00:26:50 (2 sec)] because of those high level of gas Unidentified speaker [00:26:50-00:26:53 (3 sec)] prices and oil prices and this uh will Unidentified speaker [00:26:53-00:26:55 (2 sec)] probably be very clear in the PMI data. Unidentified speaker [00:26:55-00:26:57 (2 sec)] There's been a lot of discussion about Unidentified speaker [00:26:57-00:26:59 (2 sec)] the energy challenges going into winter. Unidentified speaker [00:26:59-00:27:00 (1 sec)] Gas storage levels aren't where they Unidentified speaker [00:27:00-00:27:03 (3 sec)] have been in previous years. I mean, are Unidentified speaker [00:27:03-00:27:04 (1 sec)] you expecting to see this weighing on Unidentified speaker [00:27:04-00:27:06 (2 sec)] activity further as we go towards the Unidentified speaker [00:27:06-00:27:08 (2 sec)] colder periods of the year? Unidentified speaker [00:27:08-00:27:09 (1 sec)] >> Yeah, I mean, this is a big risk for Unidentified speaker [00:27:09-00:27:11 (2 sec)] Europe, right? The gas prices because we Unidentified speaker [00:27:11-00:27:14 (3 sec)] need more more gas and that we cannot Unidentified speaker [00:27:14-00:27:16 (2 sec)] produce it. So, it will probably Unidentified speaker [00:27:16-00:27:17 (1 sec)] continue to wait on growth uh going Unidentified speaker [00:27:17-00:27:19 (2 sec)] forward. We know that for instance Unidentified speaker [00:27:19-00:27:22 (3 sec)] industry uh they really rely on gas and Unidentified speaker [00:27:22-00:27:24 (2 sec)] the fact that gas prices are high means Unidentified speaker [00:27:24-00:27:26 (2 sec)] basically that they produce less. So all Unidentified speaker [00:27:26-00:27:30 (4 sec)] in all I think it will lead to a lower Unidentified speaker [00:27:30-00:27:32 (2 sec)] slower growth uh going ahead and Unidentified speaker [00:27:32-00:27:35 (3 sec)] probably much lower than what the ECB is Unidentified speaker [00:27:35-00:27:37 (2 sec)] expecting and very and the ECB is very Unidentified speaker [00:27:37-00:27:40 (3 sec)] ambitious I would say on growth. uh this Unidentified speaker [00:27:40-00:27:42 (2 sec)] seems given the current level of energy Unidentified speaker [00:27:42-00:27:45 (3 sec)] prices even with the uh recent uh Unidentified speaker [00:27:45-00:27:48 (3 sec)] decrease probably this is too ambitious Unidentified speaker [00:27:48-00:27:49 (1 sec)] and I I don't think we are going to Unidentified speaker [00:27:49-00:27:50 (1 sec)] reach that point. Unidentified speaker [00:27:50-00:27:52 (2 sec)] >> I mean Yokim Nago from the ECB granted Unidentified speaker [00:27:52-00:27:53 (1 sec)] one of the more hawkish members of the Unidentified speaker [00:27:53-00:27:55 (2 sec)] ECB governing council as well talking Unidentified speaker [00:27:55-00:27:57 (2 sec)] about the potential for having to raise Unidentified speaker [00:27:57-00:27:59 (2 sec)] rates to a level that restricts economic Unidentified speaker [00:27:59-00:28:01 (2 sec)] activity as well. I mean what's your Unidentified speaker [00:28:01-00:28:02 (1 sec)] expectation in terms of the ECB path Unidentified speaker [00:28:02-00:28:03 (1 sec)] ahead? Unidentified speaker [00:28:03-00:28:06 (3 sec)] >> Yeah, I think uh they will probably act Unidentified speaker [00:28:06-00:28:08 (2 sec)] one more time and that's very clear Unidentified speaker [00:28:08-00:28:10 (2 sec)] given their communication. I don't see Unidentified speaker [00:28:10-00:28:12 (2 sec)] them hiking further than that. The Unidentified speaker [00:28:12-00:28:14 (2 sec)] reason for that is basically because Unidentified speaker [00:28:14-00:28:16 (2 sec)] growth is probably not going to be as Unidentified speaker [00:28:16-00:28:18 (2 sec)] strong as they expect. They expect Unidentified speaker [00:28:18-00:28:21 (3 sec)] growth to be around 03 to 04% each and Unidentified speaker [00:28:21-00:28:24 (3 sec)] every quarter in 2027 and 2028. This is Unidentified speaker [00:28:24-00:28:27 (3 sec)] very optimistic I would say and with the Unidentified speaker [00:28:27-00:28:28 (1 sec)] current level of uh interest rate but Unidentified speaker [00:28:28-00:28:32 (4 sec)] also uh energy prices it seems uh not Unidentified speaker [00:28:32-00:28:34 (2 sec)] feasible. I and then this would mean Unidentified speaker [00:28:34-00:28:36 (2 sec)] that growth will be lower. This will Unidentified speaker [00:28:36-00:28:38 (2 sec)] then mean that inflationary pressure Unidentified speaker [00:28:38-00:28:41 (3 sec)] will probably be a bit more subdued that Unidentified speaker [00:28:41-00:28:43 (2 sec)] what the ECB is expecting and what one Unidentified speaker [00:28:43-00:28:45 (2 sec)] one more rate is probably enough then Unidentified speaker [00:28:45-00:28:47 (2 sec)] >> so we're talking about a situation with Unidentified speaker [00:28:47-00:28:48 (1 sec)] higher energy prices we've also got Unidentified speaker [00:28:48-00:28:50 (2 sec)] higher yields which is part of that Unidentified speaker [00:28:50-00:28:52 (2 sec)] story as well and the fiscal constraints Unidentified speaker [00:28:52-00:28:53 (1 sec)] in so many parts of Europe I see an Unidentified speaker [00:28:53-00:28:54 (1 sec)] announcement from France yesterday Unidentified speaker [00:28:54-00:28:57 (3 sec)] another 450 million euros in fuel aid Unidentified speaker [00:28:57-00:29:00 (3 sec)] being announced how much of a risk are Unidentified speaker [00:29:00-00:29:02 (2 sec)] more energy supports going to be to the Unidentified speaker [00:29:02-00:29:03 (1 sec)] fiscal trajectory Unidentified speaker [00:29:03-00:29:05 (2 sec)] >> yeah that that's that's one big risk of Unidentified speaker [00:29:05-00:29:09 (4 sec)] And the longest uh the the energy crisis Unidentified speaker [00:29:09-00:29:11 (2 sec)] last the the biggest the risk is Unidentified speaker [00:29:11-00:29:14 (3 sec)] clearly. Uh but the thing is that it Unidentified speaker [00:29:14-00:29:16 (2 sec)] makes the things even worse for 2027 and Unidentified speaker [00:29:16-00:29:19 (3 sec)] 2028 because everything that is spent Unidentified speaker [00:29:19-00:29:21 (2 sec)] right now then we will need to see some Unidentified speaker [00:29:21-00:29:24 (3 sec)] savings further away and this is clearly Unidentified speaker [00:29:24-00:29:26 (2 sec)] the case especially for France which is Unidentified speaker [00:29:26-00:29:28 (2 sec)] already starting with a very bad Unidentified speaker [00:29:28-00:29:30 (2 sec)] starting point. So if there is more Unidentified speaker [00:29:30-00:29:33 (3 sec)] support, no uh this may help growth a Unidentified speaker [00:29:33-00:29:35 (2 sec)] bit right now. But this is clearly will Unidentified speaker [00:29:35-00:29:37 (2 sec)] have a negative impact going ahead in Unidentified speaker [00:29:37-00:29:38 (1 sec)] 2027. Definitely. Unidentified speaker [00:29:38-00:29:39 (1 sec)] >> Let's talk a little bit more about the Unidentified speaker [00:29:39-00:29:41 (2 sec)] outlook for France. We're expecting the Unidentified speaker [00:29:41-00:29:42 (1 sec)] detailed budget plan from the government Unidentified speaker [00:29:42-00:29:43 (1 sec)] there next week. They've already said Unidentified speaker [00:29:43-00:29:46 (3 sec)] it's going to be 54 billion euros worth Unidentified speaker [00:29:46-00:29:48 (2 sec)] of measures. I mean bond spreads 100 Unidentified speaker [00:29:48-00:29:50 (2 sec)] basis points between French and German Unidentified speaker [00:29:50-00:29:52 (2 sec)] bonds at the moment. Do you see that Unidentified speaker [00:29:52-00:29:54 (2 sec)] going much wider if this budget debate Unidentified speaker [00:29:54-00:29:56 (2 sec)] gets as ugly as we think it might be? Unidentified speaker [00:29:56-00:29:58 (2 sec)] >> Yeah, exactly. I mean there is a Unidentified speaker [00:29:58-00:30:01 (3 sec)] likelihood, right? I mean we cannot um Unidentified speaker [00:30:01-00:30:02 (1 sec)] every scenario is possible for the Unidentified speaker [00:30:02-00:30:04 (2 sec)] French budget because at this stage it's Unidentified speaker [00:30:04-00:30:06 (2 sec)] such a mess that every scenario is Unidentified speaker [00:30:06-00:30:08 (2 sec)] possible. I think there is quite uh a Unidentified speaker [00:30:08-00:30:11 (3 sec)] lot already priced into the the spread. Unidentified speaker [00:30:11-00:30:14 (3 sec)] So probably a further widening is likely Unidentified speaker [00:30:14-00:30:16 (2 sec)] but not a big one. I would expect that Unidentified speaker [00:30:16-00:30:19 (3 sec)] spread go to 100 to 125 in the in the Unidentified speaker [00:30:19-00:30:22 (3 sec)] current period. Clearly can go worse Unidentified speaker [00:30:22-00:30:24 (2 sec)] than that but it's not the best case. Uh Unidentified speaker [00:30:24-00:30:27 (3 sec)] I think we get the bad news already. We Unidentified speaker [00:30:27-00:30:30 (3 sec)] know that uh deficit is already going to Unidentified speaker [00:30:30-00:30:32 (2 sec)] be worse in 2026 than what was announced Unidentified speaker [00:30:32-00:30:36 (4 sec)] and planned. So uh 5.4% uh deficit um Unidentified speaker [00:30:36-00:30:39 (3 sec)] versus GDP. Then for next year we Unidentified speaker [00:30:39-00:30:41 (2 sec)] already know that it will be 6.5 if Unidentified speaker [00:30:41-00:30:43 (2 sec)] nothing is done. Uh the budget plan is Unidentified speaker [00:30:43-00:30:46 (3 sec)] quite ambitious probably will not land Unidentified speaker [00:30:46-00:30:48 (2 sec)] as such because uh there is no majority Unidentified speaker [00:30:48-00:30:50 (2 sec)] in the parliament. So very difficult to Unidentified speaker [00:30:50-00:30:52 (2 sec)] pass it through. Uh but all those risk Unidentified speaker [00:30:52-00:30:54 (2 sec)] has in a sense already priced into the Unidentified speaker [00:30:54-00:30:55 (1 sec)] market. Unidentified speaker [00:30:55-00:30:57 (2 sec)] If we were to get to 125 of a spread, I Unidentified speaker [00:30:57-00:30:58 (1 sec)] mean, is that a point where we have to Unidentified speaker [00:30:58-00:31:00 (2 sec)] see action from the ECB? Unidentified speaker [00:31:00-00:31:02 (2 sec)] >> No, I don't think so. I think uh the ECB Unidentified speaker [00:31:02-00:31:05 (3 sec)] I mean the the the need for them to Unidentified speaker [00:31:05-00:31:08 (3 sec)] intervene will be much higher than that. Unidentified speaker [00:31:08-00:31:10 (2 sec)] The reason being also that the reason Unidentified speaker [00:31:10-00:31:13 (3 sec)] wide spread do uh widen is because of Unidentified speaker [00:31:13-00:31:16 (3 sec)] the fiscal situation and the ECB is Unidentified speaker [00:31:16-00:31:19 (3 sec)] supposed to act only uh if the the Unidentified speaker [00:31:19-00:31:21 (2 sec)] widening is not due to a fiscal Unidentified speaker [00:31:21-00:31:23 (2 sec)] situation. So in this situation there is Unidentified speaker [00:31:23-00:31:25 (2 sec)] no reason for them to in to act. They Unidentified speaker [00:31:25-00:31:29 (4 sec)] will uh if uh things get very much worse Unidentified speaker [00:31:29-00:31:32 (3 sec)] but at this stage probably not and uh Unidentified speaker [00:31:32-00:31:34 (2 sec)] they would also need a bit more clarity Unidentified speaker [00:31:34-00:31:36 (2 sec)] on the willingness of the future Unidentified speaker [00:31:36-00:31:38 (2 sec)] president to actually do something about Unidentified speaker [00:31:38-00:31:40 (2 sec)] the public finance situation. Unidentified speaker [00:31:40-00:31:41 (1 sec)] >> Just briefly on next year's presidential Unidentified speaker [00:31:41-00:31:43 (2 sec)] election then we have uh the far left Unidentified speaker [00:31:43-00:31:45 (2 sec)] and the far right candidates looking Unidentified speaker [00:31:45-00:31:47 (2 sec)] could potentially be the two of them in Unidentified speaker [00:31:47-00:31:49 (2 sec)] the runoff election. I mean which is the Unidentified speaker [00:31:49-00:31:51 (2 sec)] biggest risk for markets? Yeah, I I Unidentified speaker [00:31:51-00:31:54 (3 sec)] think the the issue is the the biggest Unidentified speaker [00:31:54-00:31:55 (1 sec)] issue probably at this stage is the far Unidentified speaker [00:31:55-00:31:58 (3 sec)] left because uh they do not have any Unidentified speaker [00:31:58-00:32:01 (3 sec)] willingness to go into a more uh Unidentified speaker [00:32:01-00:32:02 (1 sec)] sustainable public finance trajectory. Unidentified speaker [00:32:02-00:32:05 (3 sec)] Uh they were discussing consolation of Unidentified speaker [00:32:05-00:32:07 (2 sec)] depth. So you see but uh the most Unidentified speaker [00:32:07-00:32:11 (4 sec)] important pro point is whether they have Unidentified speaker [00:32:11-00:32:12 (1 sec)] a majority in the parliament or not Unidentified speaker [00:32:12-00:32:13 (1 sec)] because probably we will have Unidentified speaker [00:32:13-00:32:15 (2 sec)] presidential election and then Unidentified speaker [00:32:15-00:32:18 (3 sec)] parliamentary election and there I would Unidentified speaker [00:32:18-00:32:20 (2 sec)] expect that there is no no majority. So Unidentified speaker [00:32:20-00:32:22 (2 sec)] it means that whoever is the president Unidentified speaker [00:32:22-00:32:25 (3 sec)] will have not so much uh power in order Unidentified speaker [00:32:25-00:32:28 (3 sec)] to uh to go through with their budgetary Unidentified speaker [00:32:28-00:32:30 (2 sec)] plan. So it means that probably in a Unidentified speaker [00:32:30-00:32:33 (3 sec)] case of an extreme victory, it will a Unidentified speaker [00:32:33-00:32:36 (3 sec)] bit um diminish the risk I would say uh Unidentified speaker [00:32:36-00:32:38 (2 sec)] for uh for France and the growth outlook Unidentified speaker [00:32:38-00:32:40 (2 sec)] and going ahead for the budget. Unidentified speaker [00:32:40-00:32:41 (1 sec)] >> Okay. Well, I'm sure we'll have plenty Unidentified speaker [00:32:41-00:32:43 (2 sec)] of conversations about the French Unidentified speaker [00:32:43-00:32:44 (1 sec)] elections before next year. But for now, Unidentified speaker [00:32:44-00:32:45 (1 sec)] Charlotte, thank you very much for Unidentified speaker [00:32:45-00:32:46 (1 sec)] joining us. Charlotte Pelia there, Unidentified speaker [00:32:46-00:32:49 (3 sec)] senior economist at ING. Unidentified speaker [00:32:49-00:32:51 (2 sec)] Coming up, talks take place on ending Unidentified speaker [00:32:51-00:32:53 (2 sec)] the Iran war just hours before the Unidentified speaker [00:32:53-00:32:56 (3 sec)] summits between President Trump and she. Unidentified speaker [00:32:56-00:32:58 (2 sec)] We'll look ahead to that superpower get Unidentified speaker [00:32:58-00:33:04 (6 sec)] together next. This is Bloomberg. Unidentified speaker [00:33:04-00:33:15 (11 sec)] [music] Donald Trump [00:33:15-00:33:17 (2 sec)] The United States also totally rejects Donald Trump [00:33:17-00:33:20 (3 sec)] any attempt to construct a globalist Donald Trump [00:33:20-00:33:23 (3 sec)] scheme to control for the artificial Donald Trump [00:33:23-00:33:27 (4 sec)] intelligence being spoken of so much now Donald Trump [00:33:27-00:33:30 (3 sec)] here and after officially called super Donald Trump [00:33:30-00:33:35 (5 sec)] intelligence. Unidentified speaker [00:33:35-00:33:37 (2 sec)] >> President Trump rejecting calls for Unidentified speaker [00:33:37-00:33:39 (2 sec)] international AI regulation at his Unidentified speaker [00:33:39-00:33:41 (2 sec)] speech at the UN General Assembly in New Unidentified speaker [00:33:41-00:33:44 (3 sec)] York. Meanwhile, the UK Prime Minister Unidentified speaker [00:33:44-00:33:45 (1 sec)] who's leading efforts to establish Unidentified speaker [00:33:45-00:33:47 (2 sec)] international standards on AI has Unidentified speaker [00:33:47-00:33:49 (2 sec)] accused Russia of spreading lies and Unidentified speaker [00:33:49-00:33:52 (3 sec)] disinformation. In his first speech, the Unidentified speaker [00:33:52-00:33:54 (2 sec)] UN General Assembly, Andy Bernham, Unidentified speaker [00:33:54-00:33:58 (4 sec)] described it as an attack on society. Unidentified speaker [00:33:58-00:34:00 (2 sec)] In recent years, we have seen Unidentified speaker [00:34:00-00:34:04 (4 sec)] industrialcale assault by hostile actors Unidentified speaker [00:34:04-00:34:08 (4 sec)] on the information environment in the UK Unidentified speaker [00:34:08-00:34:11 (3 sec)] and that of many of our allies. Unidentified speaker [00:34:11-00:34:13 (2 sec)] Russian agencies have used every means Unidentified speaker [00:34:13-00:34:15 (2 sec)] at their disposal to spread lies and Unidentified speaker [00:34:15-00:34:17 (2 sec)] disinformation Unidentified speaker [00:34:17-00:34:20 (3 sec)] and prey on people's fears. They've used Unidentified speaker [00:34:20-00:34:23 (3 sec)] bots and fake websites, falsified Unidentified speaker [00:34:23-00:34:25 (2 sec)] newspaper articles, Unidentified speaker [00:34:25-00:34:28 (3 sec)] forged the branding of 28 British Unidentified speaker [00:34:28-00:34:31 (3 sec)] organizations, including universities Unidentified speaker [00:34:31-00:34:34 (3 sec)] and the BBC. Unidentified speaker [00:34:34-00:34:38 (4 sec)] They've amplified far-right narratives Unidentified speaker [00:34:38-00:34:40 (2 sec)] and we have evidence that they tried to Unidentified speaker [00:34:40-00:34:44 (4 sec)] interfere with the 2019 general Unidentified speaker [00:34:44-00:34:48 (4 sec)] election. Unidentified speaker [00:34:48-00:34:49 (1 sec)] Special Prime Minister Andy Barnham Unidentified speaker [00:34:49-00:34:51 (2 sec)] speaking in New York. Well, also at the Unidentified speaker [00:34:51-00:34:53 (2 sec)] UN General Assembly, Donald Trump Unidentified speaker [00:34:53-00:34:56 (3 sec)] reviving hopes for diplomatic progress Unidentified speaker [00:34:56-00:34:57 (1 sec)] in the Iran war after what he described Unidentified speaker [00:34:57-00:35:00 (3 sec)] as those very good talks with Iranian Unidentified speaker [00:35:00-00:35:02 (2 sec)] envoys in New York. and he was speaking Unidentified speaker [00:35:02-00:35:04 (2 sec)] ahead of his meeting with the Chinese Unidentified speaker [00:35:04-00:35:07 (3 sec)] president as well. Let's discuss all of Unidentified speaker [00:35:07-00:35:09 (2 sec)] this now with Lizzie Galbrath who is Unidentified speaker [00:35:09-00:35:11 (2 sec)] senior political economist at Aberdine. Unidentified speaker [00:35:11-00:35:13 (2 sec)] Lizzie, good morning. Great to have you Unidentified speaker [00:35:13-00:35:14 (1 sec)] with us. I want to start with this Unidentified speaker [00:35:14-00:35:16 (2 sec)] question of Iran. First of all, how much Unidentified speaker [00:35:16-00:35:18 (2 sec)] weight can we put on Donald Trump's Unidentified speaker [00:35:18-00:35:20 (2 sec)] comments, these positive signals around Unidentified speaker [00:35:20-00:35:22 (2 sec)] potentially making progress toward the Unidentified speaker [00:35:22-00:35:26 (4 sec)] deescalation? Unidentified speaker [00:35:26-00:35:28 (2 sec)] >> So talks are obviously better than the Unidentified speaker [00:35:28-00:35:30 (2 sec)] absence of talks. But really the key Unidentified speaker [00:35:30-00:35:32 (2 sec)] question for me is whether or not Unidentified speaker [00:35:32-00:35:34 (2 sec)] there's actually any substantive change Unidentified speaker [00:35:34-00:35:37 (3 sec)] in the negotiating positions being put Unidentified speaker [00:35:37-00:35:41 (4 sec)] forward by the US and Iran. And we don't Unidentified speaker [00:35:41-00:35:43 (2 sec)] have a clear answer on that at the Unidentified speaker [00:35:43-00:35:44 (1 sec)] moment. Um we obviously have these Unidentified speaker [00:35:44-00:35:47 (3 sec)] positive noises from the US side, from Unidentified speaker [00:35:47-00:35:49 (2 sec)] President Trump and from Steve Wickoff Unidentified speaker [00:35:49-00:35:51 (2 sec)] who was part of the US uh delegation Unidentified speaker [00:35:51-00:35:54 (3 sec)] there. Uh but for the Iranians, they're Unidentified speaker [00:35:54-00:35:56 (2 sec)] describing a meeting where they're just Unidentified speaker [00:35:56-00:35:58 (2 sec)] putting forward their own negotiating Unidentified speaker [00:35:58-00:36:00 (2 sec)] demands, and it's not entirely clear Unidentified speaker [00:36:00-00:36:04 (4 sec)] whether those have shifted um at all Unidentified speaker [00:36:04-00:36:07 (3 sec)] from the previously very incompatible Unidentified speaker [00:36:07-00:36:09 (2 sec)] demands that we've been seeing up until Unidentified speaker [00:36:09-00:36:13 (4 sec)] now. So until we see any meaningful Unidentified speaker [00:36:13-00:36:16 (3 sec)] shift in those two positions which were Unidentified speaker [00:36:16-00:36:19 (3 sec)] very very far apart only a few weeks ago Unidentified speaker [00:36:19-00:36:20 (1 sec)] then while this is a positive Unidentified speaker [00:36:20-00:36:23 (3 sec)] development and it might limit immediate Unidentified speaker [00:36:23-00:36:26 (3 sec)] escalation risks it's not necessarily an Unidentified speaker [00:36:26-00:36:28 (2 sec)] indicator that we're on a path towards Unidentified speaker [00:36:28-00:36:30 (2 sec)] something more sustainable that would Unidentified speaker [00:36:30-00:36:32 (2 sec)] allow shipping and energy exports to Unidentified speaker [00:36:32-00:36:36 (4 sec)] normalize through the Gulf as of yet. Unidentified speaker [00:36:36-00:36:39 (3 sec)] Now Iran's president is in New York and Unidentified speaker [00:36:39-00:36:40 (1 sec)] Donald Trump has signaled that he would Unidentified speaker [00:36:40-00:36:43 (3 sec)] be open to meeting with Sudeskin. Is Unidentified speaker [00:36:43-00:36:45 (2 sec)] that the event that could perhaps see a Unidentified speaker [00:36:45-00:36:49 (4 sec)] more significant shift? Do you think Unidentified speaker [00:36:49-00:36:50 (1 sec)] >> it would certainly be very significant Unidentified speaker [00:36:50-00:36:52 (2 sec)] if it were to take place? The Iranians Unidentified speaker [00:36:52-00:36:55 (3 sec)] and the US uh delegations don't normally Unidentified speaker [00:36:55-00:36:58 (3 sec)] meet directly. Um and it would be Unidentified speaker [00:36:58-00:37:00 (2 sec)] something that uh would be quite Unidentified speaker [00:37:00-00:37:01 (1 sec)] significant therefore if it were to Unidentified speaker [00:37:01-00:37:03 (2 sec)] happen. But it is important to remember Unidentified speaker [00:37:03-00:37:06 (3 sec)] that uh the the Iranian president has Unidentified speaker [00:37:06-00:37:08 (2 sec)] generally been more on the side of Unidentified speaker [00:37:08-00:37:10 (2 sec)] advocating for diplomacy throughout this Unidentified speaker [00:37:10-00:37:13 (3 sec)] conflict and he would have to go home Unidentified speaker [00:37:13-00:37:17 (4 sec)] and sell any uh any proposals any any Unidentified speaker [00:37:17-00:37:21 (4 sec)] compromise to a very very hawkish uh Unidentified speaker [00:37:21-00:37:24 (3 sec)] regime uh now with the IRGC kind of Unidentified speaker [00:37:24-00:37:27 (3 sec)] fairly firmly in charge of military and Unidentified speaker [00:37:27-00:37:30 (3 sec)] uh domestic policy. So while it would be Unidentified speaker [00:37:30-00:37:32 (2 sec)] very significant if it were to happen, Unidentified speaker [00:37:32-00:37:34 (2 sec)] um it would be certainly very unusual, Unidentified speaker [00:37:34-00:37:35 (1 sec)] there would still be a lot of other Unidentified speaker [00:37:35-00:37:37 (2 sec)] actors in Iran that would need Unidentified speaker [00:37:37-00:37:41 (4 sec)] convincing um of any deal um if uh talks Unidentified speaker [00:37:41-00:37:43 (2 sec)] were to take place and proposals put Unidentified speaker [00:37:43-00:37:46 (3 sec)] forward. So again, positive, potentially Unidentified speaker [00:37:46-00:37:47 (1 sec)] fairly significant, [clears throat] but Unidentified speaker [00:37:47-00:37:52 (5 sec)] not a done deal um as of uh one meeting. Unidentified speaker [00:37:52-00:37:53 (1 sec)] Well, let's turn to a meeting that we do Unidentified speaker [00:37:53-00:37:55 (2 sec)] know is happening, and that's the Unidentified speaker [00:37:55-00:37:56 (1 sec)] Chinese President Xi Jinping, who's Unidentified speaker [00:37:56-00:37:58 (2 sec)] arriving in Washington later today. He's Unidentified speaker [00:37:58-00:38:01 (3 sec)] going to be having this much anticipated Unidentified speaker [00:38:01-00:38:03 (2 sec)] summit with President Trump. Now, the Unidentified speaker [00:38:03-00:38:04 (1 sec)] signals going into this from the Unidentified speaker [00:38:04-00:38:06 (2 sec)] preliminary talks have been quite Unidentified speaker [00:38:06-00:38:08 (2 sec)] positive. But what are the biggest risks Unidentified speaker [00:38:08-00:38:12 (4 sec)] from this encounter? Unidentified speaker [00:38:12-00:38:14 (2 sec)] >> So, as we see it, um we're expecting Unidentified speaker [00:38:14-00:38:16 (2 sec)] things to be fairly uh limited in terms Unidentified speaker [00:38:16-00:38:18 (2 sec)] of the outcome of this. We think there Unidentified speaker [00:38:18-00:38:20 (2 sec)] might be some positive moves on trade, Unidentified speaker [00:38:20-00:38:22 (2 sec)] an extension of the of the current trade Unidentified speaker [00:38:22-00:38:25 (3 sec)] truth. That's um that's absolutely a Unidentified speaker [00:38:25-00:38:26 (1 sec)] good thing. But we do see under the Unidentified speaker [00:38:26-00:38:30 (4 sec)] surface of this some fairly uh mutually Unidentified speaker [00:38:30-00:38:32 (2 sec)] incompatible priorities that we think Unidentified speaker [00:38:32-00:38:35 (3 sec)] that this summit is likely not going to Unidentified speaker [00:38:35-00:38:37 (2 sec)] address is probably going to um avoid. Unidentified speaker [00:38:37-00:38:41 (4 sec)] So we see US uh China competition on AI Unidentified speaker [00:38:41-00:38:44 (3 sec)] continuing to uh to kind of move ahead Unidentified speaker [00:38:44-00:38:45 (1 sec)] in the background. that doesn't seem to Unidentified speaker [00:38:45-00:38:47 (2 sec)] be abating anytime soon. And you have Unidentified speaker [00:38:47-00:38:50 (3 sec)] these other issues um around things like Unidentified speaker [00:38:50-00:38:52 (2 sec)] critical minerals and uh strategic Unidentified speaker [00:38:52-00:38:55 (3 sec)] assets that uh do still seem to be sort Unidentified speaker [00:38:55-00:38:57 (2 sec)] of bubbling along underneath the surface Unidentified speaker [00:38:57-00:39:00 (3 sec)] without any real resolution. So, we're Unidentified speaker [00:39:00-00:39:02 (2 sec)] expecting some of the sort of the easier Unidentified speaker [00:39:02-00:39:05 (3 sec)] wins uh to really be the headlines out Unidentified speaker [00:39:05-00:39:06 (1 sec)] of this summit, but we're not expecting Unidentified speaker [00:39:06-00:39:09 (3 sec)] any sort of fundamental reset and that Unidentified speaker [00:39:09-00:39:12 (3 sec)] still leaves USChina relations on this Unidentified speaker [00:39:12-00:39:16 (4 sec)] uh fairly competitive pathway um that uh Unidentified speaker [00:39:16-00:39:18 (2 sec)] that isn't likely to be addressed Unidentified speaker [00:39:18-00:39:20 (2 sec)] anytime soon. Unidentified speaker [00:39:20-00:39:22 (2 sec)] and AI really has crept up the agenda Unidentified speaker [00:39:22-00:39:24 (2 sec)] for this meeting as well as we've had Unidentified speaker [00:39:24-00:39:26 (2 sec)] all of the the recent developments both Unidentified speaker [00:39:26-00:39:28 (2 sec)] from AI companies calling for a slowdown Unidentified speaker [00:39:28-00:39:30 (2 sec)] to Donald Trump as we just heard him uh Unidentified speaker [00:39:30-00:39:32 (2 sec)] rejecting calls for international Unidentified speaker [00:39:32-00:39:35 (3 sec)] regulation on this as well. I is that an Unidentified speaker [00:39:35-00:39:38 (3 sec)] issue where the Chinese may be able to Unidentified speaker [00:39:38-00:39:40 (2 sec)] actually advance their own agenda in a Unidentified speaker [00:39:40-00:39:41 (1 sec)] meeting with Donald Trump as well given Unidentified speaker [00:39:41-00:39:45 (4 sec)] the fluidity of the situation. Unidentified speaker [00:39:45-00:39:47 (2 sec)] I think if the Chinese can come out of Unidentified speaker [00:39:47-00:39:49 (2 sec)] this uh meeting and you know they've Unidentified speaker [00:39:49-00:39:51 (2 sec)] maybe uh they've maybe managed to Unidentified speaker [00:39:51-00:39:53 (2 sec)] discuss AI in terms of commercial Unidentified speaker [00:39:53-00:39:55 (2 sec)] opportunities rather than geopolitical Unidentified speaker [00:39:55-00:39:58 (3 sec)] risks then that would certainly be um a Unidentified speaker [00:39:58-00:40:00 (2 sec)] positive for them. Um and we've we've Unidentified speaker [00:40:00-00:40:03 (3 sec)] seen AI spoken about a lot in the Unidentified speaker [00:40:03-00:40:05 (2 sec)] context of geopolitical risks over the Unidentified speaker [00:40:05-00:40:07 (2 sec)] past few months. Um, you know, UK Prime Unidentified speaker [00:40:07-00:40:09 (2 sec)] Minister Andy Bernham certainly spoke Unidentified speaker [00:40:09-00:40:11 (2 sec)] about it in that context and I doubt Unidentified speaker [00:40:11-00:40:13 (2 sec)] that we've seen the last of those types Unidentified speaker [00:40:13-00:40:16 (3 sec)] of speeches, but President Trump doesn't Unidentified speaker [00:40:16-00:40:19 (3 sec)] seem particularly interested in engaging Unidentified speaker [00:40:19-00:40:21 (2 sec)] with AI in that type of context. So I Unidentified speaker [00:40:21-00:40:23 (2 sec)] think there is potentially a world in Unidentified speaker [00:40:23-00:40:25 (2 sec)] which um the the US and China can maybe Unidentified speaker [00:40:25-00:40:28 (3 sec)] discuss it in terms of commercial uh Unidentified speaker [00:40:28-00:40:31 (3 sec)] opportunities uh rather than um around Unidentified speaker [00:40:31-00:40:33 (2 sec)] these sort of more geopolitical risks um Unidentified speaker [00:40:33-00:40:35 (2 sec)] where potentially the there is an Unidentified speaker [00:40:35-00:40:37 (2 sec)] opening there but it's likely to be Unidentified speaker [00:40:37-00:40:39 (2 sec)] fairly small and we know that the you Unidentified speaker [00:40:39-00:40:41 (2 sec)] know the US still do have these these Unidentified speaker [00:40:41-00:40:44 (3 sec)] export controls um on uh on very Unidentified speaker [00:40:44-00:40:46 (2 sec)] advanced chips as an example. So there Unidentified speaker [00:40:46-00:40:48 (2 sec)] do appear to be limits to the extent to Unidentified speaker [00:40:48-00:40:51 (3 sec)] which the US is willing to to treat uh Unidentified speaker [00:40:51-00:40:54 (3 sec)] this as a purely commercial issue even Unidentified speaker [00:40:54-00:40:56 (2 sec)] as President Trump is unwilling to Unidentified speaker [00:40:56-00:40:59 (3 sec)] rhetorically um engage with some of the Unidentified speaker [00:40:59-00:41:02 (3 sec)] the substance of uh other Western actors Unidentified speaker [00:41:02-00:41:05 (3 sec)] um and on their concerns. Unidentified speaker [00:41:05-00:41:07 (2 sec)] >> How should we expect President Trump to Unidentified speaker [00:41:07-00:41:09 (2 sec)] address some of the red line issues for Unidentified speaker [00:41:09-00:41:12 (3 sec)] China? For example, Taiwan, Chinese Unidentified speaker [00:41:12-00:41:13 (1 sec)] officials are focused on trying to block Unidentified speaker [00:41:13-00:41:17 (4 sec)] this $14 billion proposed US weapons Unidentified speaker [00:41:17-00:41:21 (4 sec)] package for Taipei. Unidentified speaker [00:41:21-00:41:23 (2 sec)] >> So, we're not expecting uh Taiwan to Unidentified speaker [00:41:23-00:41:27 (4 sec)] necessarily get a direct um readout in Unidentified speaker [00:41:27-00:41:29 (2 sec)] uh in the joint communicate if there if Unidentified speaker [00:41:29-00:41:32 (3 sec)] there is one. But it is possible that uh Unidentified speaker [00:41:32-00:41:34 (2 sec)] uh those uh Chinese concerns will be Unidentified speaker [00:41:34-00:41:36 (2 sec)] conveyed again to President Trump. This Unidentified speaker [00:41:36-00:41:38 (2 sec)] has proven to be a little bit of a a Unidentified speaker [00:41:38-00:41:40 (2 sec)] sticking point recently. We're not Unidentified speaker [00:41:40-00:41:42 (2 sec)] expecting it to upend the summit, but it Unidentified speaker [00:41:42-00:41:44 (2 sec)] is again another one of those indicators Unidentified speaker [00:41:44-00:41:47 (3 sec)] of these underlying tensions that Unidentified speaker [00:41:47-00:41:49 (2 sec)] continue to exist in the US China Unidentified speaker [00:41:49-00:41:50 (1 sec)] relationship. Even as things on the Unidentified speaker [00:41:50-00:41:53 (3 sec)] surface have stabilized quite a lot Unidentified speaker [00:41:53-00:41:55 (2 sec)] since the early days of uh President Unidentified speaker [00:41:55-00:41:57 (2 sec)] Trump's presidency when it was all about Unidentified speaker [00:41:57-00:41:59 (2 sec)] tariffs and all about trade, you do Unidentified speaker [00:41:59-00:42:01 (2 sec)] still have these these underlying Unidentified speaker [00:42:01-00:42:04 (3 sec)] foreign policy issues that just aren't Unidentified speaker [00:42:04-00:42:07 (3 sec)] going to be smoothed over easily. So, Unidentified speaker [00:42:07-00:42:09 (2 sec)] we're we're expecting it to be brought Unidentified speaker [00:42:09-00:42:11 (2 sec)] up in private. We're not expecting it to Unidentified speaker [00:42:11-00:42:13 (2 sec)] necessarily be part of the the public Unidentified speaker [00:42:13-00:42:16 (3 sec)] communication around the summit. Um, Unidentified speaker [00:42:16-00:42:18 (2 sec)] again, as President Trump is looking for Unidentified speaker [00:42:18-00:42:20 (2 sec)] uh for those sort of easy wins in the Unidentified speaker [00:42:20-00:42:22 (2 sec)] run-up to the midterms and to continue Unidentified speaker [00:42:22-00:42:25 (3 sec)] his uh reputation as a dealmaker on the Unidentified speaker [00:42:25-00:42:27 (2 sec)] global stage. Unidentified speaker [00:42:27-00:42:28 (1 sec)] >> Yeah, of course, the all important Unidentified speaker [00:42:28-00:42:30 (2 sec)] political context in the US as well. Unidentified speaker [00:42:30-00:42:31 (1 sec)] Lizzie Galbrath, senior political Unidentified speaker [00:42:31-00:42:33 (2 sec)] economist at Aberdine. Thank you very Unidentified speaker [00:42:33-00:42:35 (2 sec)] much for joining us this morning. And Unidentified speaker [00:42:35-00:42:37 (2 sec)] don't miss our interviews coming up from Unidentified speaker [00:42:37-00:42:39 (2 sec)] the UN General Assembly later today, Unidentified speaker [00:42:39-00:42:41 (2 sec)] including the Spanish Prime Minister, Unidentified speaker [00:42:41-00:42:42 (1 sec)] the Canadian Foreign Minister, and the Unidentified speaker [00:42:42-00:42:47 (5 sec)] Director General of the IAA. Unidentified speaker [00:42:47-00:42:49 (2 sec)] Now, Bloomberg has learned that SoftBank Unidentified speaker [00:42:49-00:42:51 (2 sec)] is offering record yields to entice Unidentified speaker [00:42:51-00:42:53 (2 sec)] investors to what's set to be one of the Unidentified speaker [00:42:53-00:42:56 (3 sec)] largest corporate junk bond sales ever. Unidentified speaker [00:42:56-00:42:57 (1 sec)] To clarify what we said earlier, that Unidentified speaker [00:42:57-00:43:00 (3 sec)] includes a€ 10 billion part and a1 Unidentified speaker [00:43:00-00:43:03 (3 sec)] billion euro portion. Unidentified speaker [00:43:03-00:43:05 (2 sec)] Now, the Polish president has told Unidentified speaker [00:43:05-00:43:07 (2 sec)] Bloomberg he hopes the US will finalize Unidentified speaker [00:43:07-00:43:09 (2 sec)] plans to establish a permanent military Unidentified speaker [00:43:09-00:43:11 (2 sec)] base in Poland. In an exclusive Unidentified speaker [00:43:11-00:43:13 (2 sec)] interview, Carl Levsky said he hopes Unidentified speaker [00:43:13-00:43:15 (2 sec)] construction will be complete before Unidentified speaker [00:43:15-00:43:18 (3 sec)] President Trump leaves office in 2029. Unidentified speaker [00:43:18-00:43:20 (2 sec)] And if so, it will be known as Fort Unidentified speaker [00:43:20-00:43:23 (3 sec)] Trump. Unidentified speaker [00:43:23-00:43:25 (2 sec)] >> The preparation of infrastructure is Unidentified speaker [00:43:25-00:43:28 (3 sec)] going on. Actually, the infrastructure Unidentified speaker [00:43:28-00:43:30 (2 sec)] is being chosen right now. consultants Unidentified speaker [00:43:30-00:43:33 (3 sec)] from the US have already visited Poland. Unidentified speaker [00:43:33-00:43:34 (1 sec)] So I think that when the work is Unidentified speaker [00:43:34-00:43:36 (2 sec)] finished by the US administration by Unidentified speaker [00:43:36-00:43:39 (3 sec)] both governments, I think that then Unidentified speaker [00:43:39-00:43:41 (2 sec)] President Trump will personally be able Unidentified speaker [00:43:41-00:43:43 (2 sec)] to participate in the inauguration of Unidentified speaker [00:43:43-00:43:46 (3 sec)] Fort Trump that is going to happen in Unidentified speaker [00:43:46-00:43:47 (1 sec)] the Republic of Poland. Unidentified speaker [00:43:47-00:43:49 (2 sec)] >> Are are there any sticking points at the Unidentified speaker [00:43:49-00:43:51 (2 sec)] moment that still need to iron out or Unidentified speaker [00:43:51-00:43:52 (1 sec)] are again are you confident that it's Unidentified speaker [00:43:52-00:43:56 (4 sec)] just a matter of time? Unidentified speaker [00:43:56-00:43:58 (2 sec)] We are confident that the declaration of Unidentified speaker [00:43:58-00:44:00 (2 sec)] President Trump, this is just a question Unidentified speaker [00:44:00-00:44:03 (3 sec)] of time. But we know that administrative Unidentified speaker [00:44:03-00:44:05 (2 sec)] issues, financial issues are still Unidentified speaker [00:44:05-00:44:07 (2 sec)] there. Poland is paying for its Unidentified speaker [00:44:07-00:44:09 (2 sec)] security. We are also paying for the Unidentified speaker [00:44:09-00:44:12 (3 sec)] stay of American troops in Poland. And Unidentified speaker [00:44:12-00:44:14 (2 sec)] to us, this is a very good solution Unidentified speaker [00:44:14-00:44:19 (5 sec)] because we know what we are paying for. Unidentified speaker [00:44:19-00:44:21 (2 sec)] The presence of US troops in Poland Unidentified speaker [00:44:21-00:44:23 (2 sec)] gives us the stability actually across Unidentified speaker [00:44:23-00:44:25 (2 sec)] the whole region of central and eastern Unidentified speaker [00:44:25-00:44:27 (2 sec)] Europe. I think that it's hard for me to Unidentified speaker [00:44:27-00:44:29 (2 sec)] give specific dates, but I think that Unidentified speaker [00:44:29-00:44:32 (3 sec)] this matter is for sure confirmed Unidentified speaker [00:44:32-00:44:34 (2 sec)] because President Trump is famous for Unidentified speaker [00:44:34-00:44:39 (5 sec)] keeping his word. Unidentified speaker [00:44:39-00:44:40 (1 sec)] >> That's Poland's president speaking to Unidentified speaker [00:44:40-00:44:42 (2 sec)] Francine Lacqua. Plenty more coming up Unidentified speaker [00:44:42-00:44:44 (2 sec)] on the program. Stay with us. This is Unidentified speaker [00:44:44-00:44:58 (14 sec)] Bloomberg. Unidentified speaker [00:44:58-00:45:03 (5 sec)] >> [music] Unidentified speaker [00:45:03-00:45:05 (2 sec)] >> Welcome back to Bloomberg Daybreak Unidentified speaker [00:45:05-00:45:06 (1 sec)] Europe. While tracking today's market Unidentified speaker [00:45:06-00:45:08 (2 sec)] moves on the Bloomberg terminal, we're Unidentified speaker [00:45:08-00:45:11 (3 sec)] looking at how Meta's Muse AI agent has Unidentified speaker [00:45:11-00:45:14 (3 sec)] hit some consumer inertia trades. So Unidentified speaker [00:45:14-00:45:15 (1 sec)] this is although we've seen the boost on Unidentified speaker [00:45:15-00:45:18 (3 sec)] AI infrastructure, um we're also looking Unidentified speaker [00:45:18-00:45:19 (1 sec)] at what the effect that's been having on Unidentified speaker [00:45:19-00:45:21 (2 sec)] some of the other stocks that these AI Unidentified speaker [00:45:21-00:45:23 (2 sec)] agents may be seen to disrupt. Perhaps Unidentified speaker [00:45:23-00:45:25 (2 sec)] getting people to address some of those Unidentified speaker [00:45:25-00:45:26 (1 sec)] maybe those subscriptions that they Unidentified speaker [00:45:26-00:45:28 (2 sec)] haven't uh cancelled or looking at Unidentified speaker [00:45:28-00:45:30 (2 sec)] choices for contracts as well. So in the Unidentified speaker [00:45:30-00:45:32 (2 sec)] white here we have uh the Goldman Sachs Unidentified speaker [00:45:32-00:45:34 (2 sec)] index tracking these so-called consumer Unidentified speaker [00:45:34-00:45:36 (2 sec)] inertia shares. That's the like of Unidentified speaker [00:45:36-00:45:38 (2 sec)] Planet Fitness, Allstate Insurance, even Unidentified speaker [00:45:38-00:45:40 (2 sec)] Netflix all saw their shares dropping Unidentified speaker [00:45:40-00:45:41 (1 sec)] yesterday as well. but also S&P Unidentified speaker [00:45:41-00:45:43 (2 sec)] financials uh seen as being affected by Unidentified speaker [00:45:43-00:45:45 (2 sec)] this too. That's the the turquoise line Unidentified speaker [00:45:45-00:45:47 (2 sec)] on this chart as well. So this is Unidentified speaker [00:45:47-00:45:50 (3 sec)] another effect of that Meta Muse AI Unidentified speaker [00:45:50-00:45:51 (1 sec)] agent announcement aside from the boost Unidentified speaker [00:45:51-00:45:53 (2 sec)] of course for AI infrastructure shares. Unidentified speaker [00:45:53-00:45:56 (3 sec)] Thinking about the drop in oil prices as Unidentified speaker [00:45:56-00:45:57 (1 sec)] well. We of course know that we've had Unidentified speaker [00:45:57-00:45:58 (1 sec)] the decline in Brent crude over the past Unidentified speaker [00:45:58-00:46:01 (3 sec)] few days coming below $100 a barrel Unidentified speaker [00:46:01-00:46:03 (2 sec)] eventually. But we're also seeing oil Unidentified speaker [00:46:03-00:46:06 (3 sec)] traders flock to options betting at a Unidentified speaker [00:46:06-00:46:08 (2 sec)] record pace on a further drop in Brent Unidentified speaker [00:46:08-00:46:09 (1 sec)] as well. This is the disruptions we've Unidentified speaker [00:46:09-00:46:11 (2 sec)] seen easing the East West pipeline in Unidentified speaker [00:46:11-00:46:13 (2 sec)] Saudi Arabia, but also the prospect for Unidentified speaker [00:46:13-00:46:15 (2 sec)] perhaps some diplomatic movement in the Unidentified speaker [00:46:15-00:46:17 (2 sec)] US Iran war. And I just wanted to Unidentified speaker [00:46:17-00:46:19 (2 sec)] mention copper as well, trading near Unidentified speaker [00:46:19-00:46:21 (2 sec)] record uh highs, but we're not seeing Unidentified speaker [00:46:21-00:46:23 (2 sec)] that accompanied by an increase in Unidentified speaker [00:46:23-00:46:25 (2 sec)] futures positioning as well. So perhaps Unidentified speaker [00:46:25-00:46:27 (2 sec)] an indication that down the line there's Unidentified speaker [00:46:27-00:46:29 (2 sec)] a question about physical supply versus Unidentified speaker [00:46:29-00:46:31 (2 sec)] the futures market that's gotten traders Unidentified speaker [00:46:31-00:46:33 (2 sec)] minds as well. Uh perhaps traders Unidentified speaker [00:46:33-00:46:35 (2 sec)] watching the optical technology Unidentified speaker [00:46:35-00:46:37 (2 sec)] developments uh seeing that maybe copper Unidentified speaker [00:46:37-00:46:39 (2 sec)] and data centers isn't necessarily the Unidentified speaker [00:46:39-00:46:41 (2 sec)] same trade they thought it was. Copper Unidentified speaker [00:46:41-00:46:43 (2 sec)] price is still near an echo high though. Unidentified speaker [00:46:43-00:46:45 (2 sec)] Coming up, Ian Pharaoh, the chief Unidentified speaker [00:46:45-00:46:47 (2 sec)] executive of Airtel Money, joins the Unidentified speaker [00:46:47-00:46:49 (2 sec)] opening trade to discuss the company's Unidentified speaker [00:46:49-00:46:51 (2 sec)] upcoming London IPO. That conversation Unidentified speaker [00:46:51-00:46:54 (3 sec)] 8:45 a.m. London time. The opening trade Unidentified speaker [00:46:54-00:47:02 (8 sec)] is up next. This is Bloomberg.