Trump says the White House technology accord is morally binding

Trump, Musk, AI CEOs Meet; OpenAI Eyes $1.4 Trillion Value. >> LIVE FROM BRUSSELS, THIS IS BLOOMBERG "DAYBREAK: EUROPE." I’M STEPHEN CARROLL WITH YOUR TOP STORIES. TREASURY YIELDS THEIR HEIST SINCE 2002. OIL’S BIGGEST FALL IN MORE THAN A WEEK. MIDDLE EAST CRUDE FLOWS ARE CLOSE TO PREWAR LEVELS. PRESIDENT TRUMP SIGNS A DEAL WITH THE TITANS OF TECH TO ADDRESS CONCERNS ABOUT AI SAFETY DESCRIBING IT AS MORALLY BINDING. GOOD MORNING TO YOU. WE HAVE SHARES IN ASIA TRADING HIGHER. OF 11 SECTORS ARE MOVING HIGHER THIS MORNING. EUROPEAN STOCK FUTURES POINTING TO A STRONGER OPEN AFTER FENG SLIGHTLY HIGHER YESTERDAY. S&P AND WALL STREET ALSO A LITTLE HIGHER THIS MORNING AFTER TWO DAYS OF LOSSES ON THE S&P 500. IF WE TAKE A LOOK AT THE OTHER ASSETS, OIL PRICES ARE IN FOCUS. A LITTLE HIGHER THIS MORNING. BRENT OVER $103 A BARREL. ALL EYES ON THE MIDDLE EAST ENERGY FLOWS. THE BLOOMBERG DOLLAR INDEX HAS BEEN STRENGTHENING. UP 1.9%. 10-YEAR TREASURY YIELDS. HOLDING NEAR A 19-YEAR HIGH. WE HAVE MORE INFLATION DATA COMING FROM EUROPE. 7:45. 8:45 IN FRANCE. GERMAN CPIAT 1:00 P.M. U.K. TIME. DATA KEY TO THE MOVES WE’RE SEEING, EXPECT I GUESSES AROUND THE FEDERAL RESERVE. THAT IS TO COME. THATCH SETS UP THE DAY AHEAD. THE -- THAT SETS UP THE DAY AHEAD. STEPHEN: TRADERS ARE WAITING ON A CRUCIAL U.S. INFLATION RATING AFTER YIELDS ON THE TREASURY HIT THE HIGHEST SINCE 2002. ADDING TO THE HAWK IRCHORUS, MICHAEL BARR IS AGAIN WARNING THAT MORE HIKES ARE LIKELY NEEDED. >> IN MY BASE CASE, FURTHER POLICY ADJUSTMENTS ARE LIKELY TO BE NEEDED TO ENSURE THAT INFLATION COMES DOWN TO TARGET IN A TIMELY FASHION. WE WANT TO SUPPORT SUSTAINABLE GROWTH IN SUPPORT OF MAXIMUM EMPLOYMENT AND PRICE STABILITY IS CRUCIAL TO THAT. STEPHEN: LET’S BRING IN DAVID SAVAGE FOR MORE. HOW SIGNIFICANT NOW WILL THIS PCEDATA BE TODAY? >> WELL, I THINK THERE IS A HIGH BAR FOR A DOWNSIDE SURPRISE THAT WOULD BE NEEDED AND LATER FROM PAYROLLS IN THE WEEK TO REVERSE THE FRIEND WE’RE SEEING IN HIGHER YIELDS. WE HAVE SEEN YIELDS STEADY OVERNIGHT. PART OF THAT IS BECAUSE WE HEARD FROM THE FEDERAL RESERVE BANK OF NEW YORK, PRESIDENT WILLIAMS WHO SAID NAY MIGHT NEED ONE MORE HIKE LATE THIS YEAR. 50-50 ODDS OF A SECOND HIKE COMING LATER THIS YEAR. IT IS FLUID IN TERMS OF WHAT EXPECTATIONS SHOULD LOOK LIKE IN THE NEAR TERM. AND WHAT HE WHAT WE GET LATER TONIGHT COULD DICTATE THAT PRICING. BUT THE PRESSURES ARE REALLY STRUCTURAL PARTICULARLY ON THE ENERGY SIDE. IT IS GOING TO BE VERY DIFFICULT TO JUSTIFY REALLY SEEING A REVERSAL TO HAVE TREND AND HIGHER YIELDS. >> YOU MENTIONED THE JOBS REPORT ON FRIDAY. THE JOB OPENINGS DATA YESTERDAY SHOWING A DROP IN VACANCIES. IN TERMS OF WHAT TO EXPECT FROM FRIDAY’S PAYROLLS REPORT IS THAT MORE LIKELY TO HAVE A GREATER INFLUENCE ON FED DECISION MAKING? >> YEAH, I THINK SO. I THINK IT WILL HAVE MORE BEARING THAN PCE REPORT WE SEE LATER TODAY. THE WEAL DRIVE IN HIGHER YIELDS IS BECAUSE NOT ONLY ARE WE SEEING RATE OF CHANGE ACCELERATION AND INFLATION, U.S. GROWTH STILL LOOKS REALLY RESILIENT. WE SAW THAT WITH THE P.M.I. DATA. WE’RE STARTING TO SEE A POINT WHERE REAL YIELDS HAVE TO MOVE HI, SUFFICIENT TO SOME LEVEL OF DEMAND DESTRUCTION TO GET THE FEDERAL RESERVE AND MARKETS MORE COMFORTABLE. WE’RE IF WE STILL SEEING VERY STRONG OR DECENT EMPLOYMENT DATA THEN THAT’S GOING TO BE VERY DUEL DIFFICULT TO AGAIN JUSTIFY SLOWING THE PACE OF RATE HIKES. IN AUGUST, WE SAW AN UPSIDE SURPRISE. IT WILL BE THERE GO TO SEE WHAT GET HOMERS IN PAYROLL DATA ON FRIDAY. STEPHEN: WE’LL BE WATCHING CLOSELY TO SEE WHAT’S IN THAT DATA. THANK YOU FOR JOIN US. BONDS IN ASIA -- STOCKS ARE GAINING. LET’S GET AN UPDATE FROM WINNIE HSU IN HONG KONG. GOOD MORNING. WINNIE: GOOD MORNING. AS YOU MENTIONED WE ARE SEEING BONDS IN ASIA STABILIZING ESPECIALLY WITH THE FRONT END YIELD FALLING ACROSS THE REGION. SPECIFICALLY FOR AUSTRALIA YOU ALSO HAVE THE INFLATION NUMBERS WHICH IS SUPPORTIVE OF INVESTORS -- THEIR BETS AROUND THE FURTHER RATE HIKES AND JAPAN WE HAD SOLID DEMAND AROUND THE AUCTION EARLIER TODAY. INVESTORS STILL HAVE THAT APPETITE GIVEN HOW HIGH YIELDS ARE IN JAPAN NOW. WHEN IT COMES TO THE YEN SEEING A BIT OF A STRENGTHENING TODAY AT ONE UPON THE THROUGH THAT 157 LEVEL AGAINST DOLLAR. INVESTORS ARE SAYING WE’RE SEEING UP FURTHER FUND FLOWS AT THE QUARTER END. HOW THIS STABILIZATION IN BONDS IS REALLY SUPPORTING ASIAN STOCKS. MSCI ASIA UP ALMOST 1%. WE’RE SEEING TECH SHARES LEADING GAINS TODAY GIVEN THE MOVE THE U.S. PEERS OVERNIGHT. THE TECH HEAVY LEADING GAINS TODAY. YOU CAN SEE THAT ACTUALLY IS A BIT OF A DRAG IN PROPERTY SHARES EARLIER IN THE MORNING. QUITE SOME DISAPPOINTMENT WHEN IT COMES TO BEIJING’S NEW STIMULUS PACKAGE ESPECIALLY AROUND THE MORTGAGE SUBSIDY PROGRAM. YOU SEE A BIT OF A SELLOFF THERE AND YOU’RE ALSO SEEING HARDWARE SHARES IN CHINA DRAGGING TODAY, ESPECIALLY AHEAD OF THEIR LONG HOLIDAY STARTING TOMORROW. BACK TO YOU. STEPHEN: LOOKING FORWARD TO THAT. WINNIE HSU IN HONG KONG. THANK YOU. NOW OIL IS HOLDING STEADY AFTER ITS BIGGEST DROP IN MORE THAN A WEEK ON SIGNS THAT MILITARY EAST SUPPLIES ARE PRETTY MUCH BACK TO WHERE IT WAS BEFORE THE IRAN WAR STARTED. LET’S GET THE LATEST FROM ABEER ABU OMAR WHO JOINS US FROM DUBAI. WHAT ARE WE LEARNING ABOUT ENERGY FLOWS? WHAT DIFFERENCE DOES THIS MAKE TO THE MARKET? ABEER: GOOD MORNING, STEPHEN. FIRST, JPMORGAN AND GOLDMAN SACHS ARE NOTING THAT FLOWS, CRUDE FLOWS THROUGH STRAIT OF HORMUZ ARE 90% OF WHAT THEY WERE PREWAR. THAT IS A HUGE NUMBER. THAT IS ALMOST ALL OF IT. DIESEL OF COURSE AND OTHER CRUDE PRODUCTS ARE LOWER. WHAT WE’RE SEEING IS THIS IS NOT SAFETY RETURNING. SHIP OWNERS ARE ABLE TO GO THROUGH STRAIT OF HORMUZ WITH SUSTAINED RISK AND LACK OF SAFETY THAT WE’RE SEEING ACROSS THE WATER WAY. WHEN YOU LOOK AT THESE NUMBERS, 98% THAT, SHOULD SUGGEST TO YOU OR LEAD THAT BRENT CRUDE PRICES SHOULD BE DROPPING. WE’RE STILL SEEING THEM AROUND $103 PER BARREL. THE REASON BEHIND THE ELEVATED LEVELS IS BECAUSE OF COURSE OF THE MONTHS IN DEFICIT THAT WE WERE SEEING THROUGHOUT THE COURSE OF THIS WAR AND THE HIGH PEAK OF THIS WAR. SOME OF THE NUMBERS WE HAVE VEEN QUITE STAGGERING. 17.5 MILLION BARRELS OF PURE CRUDE THAT ARE CROSS THE STRAIT OF HORMUZ AND WE’RE SEEING POSITIVE SIGNS OUT OF SAUDI ARABIA. 50% CAPACITY. STEPHEN: POSITIVE SIGNAL. THANK YOU FOR POINTING OUT THE DEFICIT. ABEER ABU OMAR LIVE IN DUBAI FOR US. THANK YOU. STILL AHEAD, MANCHESTER CITY DEFIANT AFTER BEING FOUND GOVERNMENT ARTIFICIALLY BOOSTING ITS FINANCIAL RESULTS. MORE ON THAT LATER. FIRST A LOOK AT THE INFLATION DATA AND HIGH ENERGY COSTS. THAT IS NEXT. THIS IS BLOOMBERG. ♪ STEPHEN: WELCOME BACK TO BLOOMBERG "DAYBREAK: EUROPE." WE GOT THE LATEST INFLATION DATA FROM FRANCE, GERMANY AND ITALY TODAY. IT WILL BE WATCHED FOR KLUSE HOW MUCH MORE THE EUROPEAN CENTRAL BANKS COULD RAISE RATES AFTER THE SPANISH DATA CAME IN HIGHER THAN EXPECTED YESTERDAY. 8:45 LOCAL TIME. EXPECTING TO SEE THE INFLATION RATE TICK UP IN FRANCE. THIS COMES AFTER STRONG PRIVATE SECTOR ACTIVITY DATA AND WE HAVE A BUDGET UNVEILING BY THE GOVERNMENT COMING TOMORROW AS WELL. WHAT SORT OF PICTURE ARE WE EXPECTING? >> WE HAVE TO SEE TO SAY IT IS THE POLITICAL RISK IS FRONT AND CENTER. TRYING TO GET ALL OF THOSE THINGS IN CONTROL IN THE FORM OF THE BUDGET IS THE GREAT DEBATE THAT IS HAPPENING. THE DIFFERENCE YOU HAVE WITH FRANCE AND OTHER EUROPEAN ECONOMYS IS WHILE INFLATION IS ELEVATING, IT IS GOING FROM THE WRONG DIRECTION, IT IS NOT AT A CRITICAL LEVEL. THE ECB POLICY NOW IS MORE IF CUSSED ON CONTAINING INFLATION THAN A FACILE TAKING IT GROWTH. FRANCE IS NOT NECESSARILY MOVING THE DIRECTION THEY WANT TO MOVE PARTICULARLY WITH THE RATES GOING UP NOT JUST BECAUSE OF THE ECB BUT THE BOND MARKET SELLOFF. WHEN YOU THINK ABOUT THE FUTURE FOR FRANCE AND POTENTIAL NEXT PRESIDENT AND THE FISCAL PICTURE GOING FORWARD, THEY WANT TO ISSUE 340 BILLION EUROS WORTH OF DEBT NEXT YEAR, A 10% INCREASE FROM THIS YEAR. THAT IS A RECORD HIGH. THAT MAKES A BIG DIFFERENCING WHEN YOU’RE THINKING OVER THE BORROWING COSTS IN FRANCE. WHEN YOU LOOK AT THE SPREAD BRYAN BETWEEN GERMANY AND FRANCE, THERE IS NO BIGGER SPREAD IN EUROZONE THAN FRANCE. REALLY FRONT AND CENTER. A HUGE AMOUNT OF POLITICAL RISK AND MORE AND MORE, IT IS NOT GOING TO BE THE KMEC STORY. IT IS GOING TO BE THE MARKET STORY. IT IS GOING TO BE THE BOND MARKET. STEPHEN: LOOKING TO SEE THE DETAILS FROM THE GOVERNMENT THERE TOMORROW. THE PICTURE IS SLIGHTLY DIFFERENT AGAIN. WE HAVE POSITIVE P.M.I. SURVEYS POINTING TO RECOVERY THERE AS WELL. >> REMARKABLY IT IS WHAT MAKES A THE CLAIM FOR US, THEY ARE EXPECTED SAME RATE OF INFLATION FRANCE AND GERMANY. A THROWING ONE TRILLION AT THE ECONOMY IS CRAIG HUGE AMOUNT OF MOMENTUM. -- CREATING A HUGE AMOUNT OF MOMENTUM. YOU CANNOT OVERSTATE HOW DISLIKED FREDERIC MERZ IS IN GERMANY. WE SAW AN END TO THE MANUFACTURING RECESSION FOR MANY YEARS. SERVICES ARE STARTING TO TURNED A AS WELL. THINGS ARE GETTING BETTER THIS GERMANY. AFTER THIS RATE HIKE THE ECB IS GOING TO BE BRINGING THE ECONOMY INTO RESTRICTED TERRITORY. ONCE RATES GO UP HIGHER, THAT IS GOING TO DEPARTMENT THE EUROPEAN ECONOMY TOO. INTEREST RATES ARE GOING TO START HITTING GROWTH. GROWTH HAS REMAINED RESILIENT EUROPE. THAT MAY END. STEPHEN: THANK YOU. WE WILL BRING YOUR INTERVIEW WITH THE LIT WANEON PRIME MINISTER LATER IN THE PROGRAM. COMING UP, TRUMP AND THE TECH TITANS SIGN AN AGREEMENT ON THE SAFETY OF AI. THAT IS NEXT. THIS IS BLOOMBERG. ♪ >> WHOEVER WINS AI, I THINK THAT IS VERY IMPORTANT BUT I THINK THE TECHNOLOGY HAS VERY REAL RISKS. THE MECHANISM, HOW WE ADDRESS THOSE RISKS IS STILL UP FOR DISCUSSION BUT WWE ALL NEED TO WORK TOGETHER TO MAKE SURE THAT WE WIN AND IF WE DO THIS RIGHT AND WORK WITH THE PRESIDENT AND EVERYONE HERE, THIS IS THE LARGEST INDUSTRIAL REVOLUTION IN HISTORY. WE’RE GOING THROUGH SINGLE LARGEST INFRASTRUCTURE BUILDOUT IN HISTORY. IT IS CREATING A MILLION JOBS HERE IN THE UNITED STATES. WE HAVE CHIP PLANT COMING UP, COMPUTER PLANTS COMING UP, FACTORIES COMING UP. >> THE BASIC IDEA IS THAT WE WANT TO GIVE THE AMERICAN PEOPLE AND OUR CUSTOMERS CONFIDENCE THAT THE TOLL WORKS IN THE WAY THAT WE INTEND. >> JOBS ARE GOING TO CHANGE. JOBS HAVE ALWAYS CHANGED. >> NOW WE HAVE DIGITAL COMPUTERS DO THOSE TASKS. I DON’T THINK ANYONE IS PINING TO GO BACK AND DO DO CALCULATION. STEPHEN: THE COAST OVER THE BIGGEST U.S. TECH COMPANIES AFTER MEETING WITH PRESIDENT TRUMP AT THE WHITE HOUSE TO DISCUSS ABOUT SAFETY. AT THAT MEETING PRESIDENT TRUMP REJECTED AN IDEA OF REDUCING REGULATION ON AI. HE SAID THEY WOULD CONDUCT SAFETY ASSESSMENTS. PRES. TRUMP: ALMOST LIKE A CONSTITUTION IN A WAY. THE BIGGEST PEOPLE IN THE WORLD SIGNED THAT AND I SIGNED IT AS PRESIDENT AND IT REALLY IS A FORM OF PROTECTION. >> IS THIS BINDING IN ANY WAY. PRES. TRUMP: I THINK IT IS MORALLY BINDING, YEAH. STEPHEN: LET’S BRING IN BLOOMBERG’S SENIOR STRATEGIST. WE HEARD PRESIDENT TRUMP SAY IT THERE, ALMOST LIKE A CONSTITUTION WERE HIS WORDS. WHAT DOES THIS AGREEMENT SAY? >> ONE OF THE THINGS HE DID SAY IT WAS MORALLY BINDING. IN OTHER WORDS THIS COURT CARRIES NO LEGAL WEIGHT. IT IS AN AGREEMENT. IT IS A POSITIVE STEP FOR THE COMPANIES THEMSELVES BECAUSE THERE IS NO -- IF YOU HAVE RESTRICTED GUARDRAILS ON THEIR ABILITY TO DRIVE THE BUSINESS AND REVENUE GROWTH WHICH IS ESSENTIAL FOR THE INDUSTRY. THIS IS A POSITIVE IN THAT THERE IS AN AGREEMENT AND THERE ARE THESE CONTROLS THEY ARE TALKING ABOUT. THEY TALKED ABOUT -- FOUR DIFFERENT LAYERS OF CONTROLS. IT MIGHT MAKE SENSE TO CODIFY REGULATIONS IN IF FUTURE. IT IS GOOD THERE IS AN AGREEMENT AND GOOD THERE IS THEY ARE GOING TO HAVE THESE ASSESSMENTS ON A WEEKLY BASIS. AI IS MOVING SO QUICKLY, CAN THE ASSESSMENTS KEEP UP WITH THE PACE OF THE TECHNOLOGY SHIFTS? THAT REMAINS TO BE SEEN. THERE ARE SOME THAT REMAIN CYNICAL ABOUT THIS SITUATION WHICH IS STILL A POLITICAL HOT POTATO AS FAR AS CONSUMERS ARE CONCERNED. DESCRIBED AS SUPERFICIAL INTELLIGENCE. IN OTHER WORDS BASICALLY WHETHER AI REPRESENTS AN EXISTENTIAL THREAT OR NOT, WE KNOW THIS POLICY RESPONSE SEEMS LIKE A SUPERFICIAL REBRANDING ATTEMPT FOR THE RISKS PEOPLE SEE. THERE IS POSITIVES FOR THE INDUSTRY AND SOME REMAIN SKEPTICAL ABOUT WHETHER THERE IS GOING TO BE A BIG IMPROVEMENT IN SAFETY GUARDRAILS. STEPHEN: THAT CONVERSATION CONTINUES. LOOKING AT THIS NEWS THAT OPENAI AIMS TO RAISE $30 BILLION IN A NEW ROUND OF FUNDING ACCORDING TO SOURCES. WHAT DOES THIS TELL US ABOUT THE COMPANY’S FUTURE? >> IT TELLS US A FEW FASCINATING INSIGHTES INTO THIS. THE FACT IS OPENAI AND ANTHROPIC ARE OBVIOUSLY BURNING A LOT OF CASH AT THE MOMENT TO MOVE FORWARD IN THE FRONT END MODELS. THEY NEED THIS REQUIREMENT. THE MARKETS SUGGEST THEIR IPO ITSELF HAS BEEN PUSHED BACK. THE ANNUALIZED REVENUE THEY ARE ON CURRENTLY IS A STUNNING MASSIVE INCREASE OF 70% GROWTH FROM THE PREVIOUS MONTH NUMBER THAT WE HAD. THAT 70 IS JUST ABOVE WHERE ANTHROPIC WE HEARD ABOUT $65 BILLION PREVIOUSLY. INVESTORS ARE WILLING TO PAY UP FOR THE MOD IT WILL YOU LIKE THAT. YOU NEED TO HAVE THAT PASSIVE GROWTH TRAJECTORY. THEY NEED THE CASH TO INVEST IN TECHNOLOGY. THAT IS VERY CLEAR. IT IS COMFORT IN TERMS OF THE SIZE OF GROWTH THAT THEY ARE SEEING FROM THE TOP LINE IN SOME OF THESE REPORTS. YOU WOULD EXPECT THAT BECAUSE OF COURSE SEPTEMBER ALSO REPRESENTS THE MONTH THEY LAUNCHED THEIR ASTRA AI MODEL WHICH HAS HAD A HUGE AMOUNT OF SUCCESS AND AN UPTAKE IF YOU LIKE. AND WE HEARD OPENAI YESTERDAY TALK ABOUT THE NEW PERM ASSISTANT AIMED AT PROFESSIONAL USERS. THIS IS THE KEY SHOWING LOOK FOR AGAIN, IT SHOULD PROPEL THE GROWTH AGAIN GOING FORWARD. IT IS A COME FOR THE FOR INVESTORS. YOU SEEING REFLECTED IN OPENAI. STOCKS IN TOKYO ARE RISING THIS MORNING IN TO TOKE TRADING. STEPHEN: THANK YOU VERY MUCH. WE’LL STAY WITH THE TECH CHEAP. SAM ALTMAN HAS BEEN SPEAKING WITH BLOOMBERG ABOUT AI SAFETY CONCERNS AND THE DECISION TO PUSH BACK ON ITS IPO UNTIL AT LEAST NEXT YEAR. >> GIVEN THAT OUR WHOLE MISSION IS TO BUILD THIS FOR PEOPLE AND EMPOWER PEOPLE AND SAFETY AND WHEN WE NEED TO MAKE A DECISION ABOUT SLOWING DOWN OUR TRAINING OR OUR MODEL RELEASE SO THAT WE CAN MAKE MORE PROGRESS AND MUTT MORE OF OUR ATTENTION INTO SAFETY ALIGNMENT SECURITY, WE WILL HAPPILY DO THAT. OF COURSE WE’RE GOING TO DON’T MAKE PROGRESS. BUT THE WORLD SHOULD ALWAYS HAVE CONFIDENCE IN OUR SAFETY CASES, IN OUR SAFETY CLAIMS AND THAT WE ARE GOING TO BE RESPONSIBLE WITH THIS TECHNOLOGY AND WE DON’T WANT TOP DO THIS THING WHERE WE’RE LIKE WE NEED OUR REGULATION OR COMPETITORS TO DO X, Y OR Z. WE WANT THE WORLD TO HAVE THAT CONFIDENCE. THERE ARE STILL THINGS THAT WE CAN RELEASE. LIKE A FASTER VERSION OF ASTRA OR A CHEAPER VERSION UP. WE CAN TOTALLY DO WITH THESE WONDERFUL NEW PRODUCTS BUT I THINK LIKE -- I UNDERSTAND WHY SOME PEOPLE ARE LIKE FULLY PEDAL TO MEDAL GO. WE’RE GOING TO HAVE TO BE RESPONSIBLE. >> THERE ARE SOME DIFFICULT QUESTIONS BASED ON THE DEVELOPER AUDIENCE. YOU SAID THAT THERE ARE THE TWO MAIN THINGS THEY WANT ARE SPEED AND PERFORMANCE. YOU RELEASED NEW MECHANISMS TO ACHIEVE THAT WITH THE EXISTING GENERATION MODEL. WHY IS THAT BETTER AS A TECHNIQUE THAN RELEASING A MORE CAPABLE MODEL? >> THEY WANT THAT TOO. I THINK ALL OF THOSE THINGS ARE GOOD. SPEED, PRICE AND CAPE LIQUIDITY THREE OF THE THINGS PEOPLE ASK FOR THE MOST OFTEN. -- CAPABILITY THERE ARE THE THINGS THAT PEOPLE ASK FOR MOST OFTEN. ULTRAFAST. I DID NOT APPRECIATE HOW MUCH I WAS GOING TO LIKE IT. WE ALL WANT EVERYTHING TO BE FASTER. IT IS AWESOME. >> HAVE THE ECONOMICS BEEN GOOD FOR YOU? >> WELL, IT IS MUCH MORE EXPENSIVE TO RUN BUT WE DO CHARGE MORE FOR IT TOO. WE TRY TO MAKE IT SOMETHING -- >> WE CAN TALK TO SARAH ABOUT THE -- >> I THINK THE MARKET WILL LIKE IT AND IT IS REASONABLE FOR US. >> YOU WERE JUST ASKED ABOUT AN IPO AND WHAT YOU SAID IS YOU WANT TO BE PUBLIC ONE DAY. BUT ESSENTIALLY, THE DUTIES OF BEING A PUBLIC COMPANY ARE INCOME PATTLE WITH A DEDICATION TO FOCUS ON SAFETY. >> NOT QUITE. FOR US TO UNDERSTAND HOW TO LIVE LIFE AS A PUBLIC COMPANY WITH PRESSURE FROM INVESTORS AND THE -- ALL OF THE ADDITIONAL WEIGHT THAT COMES WITH THAT, WHILE WE ARE GOING THROUGH PERIOD OF ADJUSTING TO THIS NEW LEVEL OF CAPE AND THE NEW SAFETY REQUIREMENTS FOR THAT, WE JUST WANT TO GET OUR FEET UNDER US AND MAKE SURE WE UNDERSTAND HOW THE OPERATE IN THIS NEW WAVE AND MAKE THESE DECISION IN FRONT OF US. STEPHEN: SAM ALTMAN SPEAKING WITH ED LUDLOW. THE CONVERSATION CONTINUES THE OPENING TRADE AT 8:45 A.M. LONDON TIME. 9:45 HERE IN BRUSSELS. OTHER SHARES THE WE’RE FOLLOWING FOR YOU THIS MORNING. BLOOMBERG HAS LEARNED THE ANCHOR INVESTOR IN A 500 MILLION COLLATERALIZED LOAN OBLIGATION THAT CUT DEBT AT 15%. AN EXPLICIT RESTRICTION. PGIM IS WORKING WITH OTHERSES ON SIMILAR SAFEGUARDS. HIGH GRADE BOND SALE WAS MORE THAN THREE TIMES GREATER THAN EXPECTED. INVESTORRED PLACED $109 BILLION WORTH OF ORDERS. IT WILL FUND WARNER BROTHERS DISCOVERY. COMING UP, EUROPEAN INFLATION DATA, GETTING READ TIONZ FROM GERMANY, FRANCE AND ITALY TODAY. WHAT IT MEANS FOR ECB POLICY MAKERS NEXT. THIS IS BLOOMBERG. ♪ >> LIVE FROM BRUSSELS THIS IS BLOOMBERG DAYBREAK: EUROPE. I'M STEPHEN CARROLL WITH HER TOP STORIES. 30 YEAR TREASURY YIELD HALTED NEITHER HIGHEST SINCE 2002. TRADERS NOW EIGHT TODAY'S U.S. PCE INFLATION DATA. OIL STEADIES AFTER ITS BIGGEST FALL IN MORE THAN A WEEK ON SIGNS THAT MIDDLE EAST CRUDE FLOWS HAVE RISEN CLOSE TO PREWAR LEVELS. PLUS, PRESIDENT TRUMP SIGNS A DEAL WITH THE TITANS OF TECH TO ADDRESS CONCERNS ABOUT AI SAFETY , DESCRIBING IT AS MORALLY BINDING. SHARES GAMING IN ASIA WITH THE INDEX UP BY A 10TH OF 1% OF THE MOMENT. EUROPEAN STOCK FUTURES ALSO POINTING HIGHER AFTER WE DID SEE SLIGHTLY HIGHER FINISH ON EUROPEAN MARKET YESTERDAY. TAKING A LOOK AT THE CROSS ACCESS -- AS A PICTURE, DROPPED OPTIMISM ABOUT THE UPTICK IN FLOWS OUT OF THE MIDDLE EAST. THE STRENGTH IN THE DOLLAR IS CONTINUING, AROUND 1.9% STRONGER SO FAR THIS MONTH AND THE STORY OF THE SAME ACROSS THE YIELD CURVE AS WELL AS WE ARE TALKING ABOUT THE MULTI-DECADE HIGHS BEING HIT ON U.S. TREASURIES, THE 10 YEAR YIELD CLOSE TO ITS HIGHEST IN 19 YEARS. THAT PRESSURE ON LONG-TERM EUROS TREASURIES FORMED THE BACKDROP TO THAT ALL-IMPORTANT CORE PCE READING TODAY. THE SEPTEMBER CONSUMER PRICE DATA FOR FRANCE, GERMANY AND ITALY GIVES US A CLEARER PICTURE OF HOW HIGHER ENERGY COSTS ARE FEEDING INTO PRICE RISES. WE CAN DISCUSS ALL OF THIS WITH SABRINA, SENIOR ECONOMIST. GREAT TO HAVE YOU WITH US THIS MORNING. I WANT TO START WITH THIS QUESTION OF THE PRESSURE ON LONG-TERM YIELDS AS WELL. GIVEN THE BACKDROP THAT WE HAVE WE ARE OF COURSE LOOKING TO TODAY'S CORE PCE DATA, HOW MUCH HIGHER DO YOU THINK YIELDS CAN GO FROM HERE? SABRINA: THAT'S A VERY GOOD QUESTION AND IT'S DIFFICULT TO SAY WHAT COULD BE THE LEVEL WHICH BY THE 10 YEAR YIELD. OBVIOUSLY THE INFLATION PRINT TODAY WOULD HAVE AN IMPLICATION ON THE REAL YIELDS IN THE U.S., BECAUSE IT WILL GIVE MORE INDICATION ABOUT WHAT THE THAT IS GOING TO DO, HIKE OR NOT. THE RECENT COMMENTS HAVE BEEN QUITE HAWKISH AND THEREFORE PUSHING UP THE 10 YEAR YIELDS, KEEPING IN MIND THAT THE U.S. IS MOSTLY REFLECTING SOME FISCAL CONCERNS. STEPHEN: WHAT DID YOU MAKE OF THE COMMENTARY THAT WE HAD OUT OF THAT RANGE OF FED SPEAKERS YESTERDAY? JOHN WILLIAMS PULLING BACK A LITTLE BIT ON THAT LATER IN THE DAY TALKING ABOUT HOW WE NEED JUST ONE MORE HIKE BEING ON THE FRAME. SABRINA: INDEED, SO IT HELPS TO IN CORE THE FRONT END OF THE CURVE. OBVIOUSLY WITH HIGHER YIELDS. AND THEN FOR THE REST, IT WILL HELP TO STABILIZE 10 YEAR YIELDS GOING FORWARD. STEPHEN: LOOKING AT THE EUROPEAN PICTURE, HIGHER YIELDS VERY MUCH A DILEMMA FOR GOVERNMENTS AS THEY ARE PLANNING THEIR BUDGETS TO AND THE IMPACT OF HIGHER DEBT COSTS ON THEM AS WELL. DO YOU SEE THAT HAVING A MATERIAL ECONOMIC IMPACT THAT GOVERNMENTS ARE GOING TO HAVE TO PAY A LOT MORE TO SERVICE THEIR DEBT? SABRINA: INDEED, IT BECOMES A RISK. YOU MENTIONED THE U.S., WE SAW BOND YIELDS INCREASING ACROSS THE BOARD, SO IT IS MOSTLY DRIVEN BY REAL YIELDS WHEN WE LOOK AT INFLATION EXPECTATIONS. AND THEN WE HAVE HIGHER TERM PREMIUMS. IF WE LOOK AT THE EURO ZONE, WE HAVE COUNTRIES SUCH AS FRANCE WITH THE TERM PREMIUM HAS INCREASED, MOSTLY REFLECTING FISCAL RISK. IN THE END, THIS IS A TIGHTENING OF FINANCING CONDITIONS AND FOR COUNTRIES WITH PUBLIC FINANCES, IT MEANS THAT THE HIGHER COST OF THE DEBT ADDS TO THE FISCAL DEFICIT AND IN THE END, HIGHER DEBT TO GDP RATIO. STEPHEN: WE ARE LOOKING AT THE SPREAD BETWEEN FRENCH AND GERMAN YIELDS NOW. 118 BASIS POINTS. TOMORROW WE GET THE BUDGET ANNOUNCEMENT COMING OUT OF THE FRENCH GOVERNMENT AS WELL. WHAT CAN THE FRENCH GOVERNMENT DO AT THIS STAGE TWO, I SUPPOSE, CONVINCED THE BOND MARKETS THAT THERE IS SOME CONTROL OVER THE DEFICIT? SABRINA: WELL, THAT IS TRICKY. THE GOVERNMENT OBJECTIVE IS TO REDUCE THE DEFICIT FROM 5.1% TO 5%, BUT THE GOVERNMENT AT THE SAME TIME IS AWARE THAT GIVEN THE FRAGMENTATION, THE POLITICAL FRAGMENTATION, IT IS DIFFICULT TO COMMIT TO A STRONG FISCAL CONSOLIDATION. AT THE SAME TIME ON THE ONE HAND, A STRONG FISCAL CONSOLIDATION WOULD HAVE A NEGATIVE IMPACT ON THE ECONOMIC ACTIVITY. ON THE OTHER HAND, IT WOULD INCREASE THE COST OF THE DEBT AND AGAIN, IMPAIRING THE PUBLIC FINANCES. HAVING SAID THAT, THE GOVERNMENT HAS ANNOUNCED SOME MEASURES, NOTABLY $13 BILLION IN SPENDING CUTS IN ORDER TO REDUCE THAT TO 5% NEXT YEAR. STEPHEN: WE DO HAVE THOSE KEY INFLATION READINGS FOR GERMANY AND ITALY COMING OUT TODAY AS WELL. YESTERDAY WAS QUITE A SURPRISE AT 5% ON THE HEADLINE RATE. HOW MUCH DO YOU EXPECT TO SEE OF THE ENERGY PRICE SHOCK IN TODAY'S READINGS? SABRINA: WELL OBVIOUSLY, HIGHER ENERGY PRICES HAVE EXERTED PRESSURE ON HIGH INFLATION. AND THIS IS GOING TO BE THE CASE GIVEN THE LEVEL OF ENERGY PRICES CURRENTLY. AND THIS IS A RISK FOR THE ECB ACTION GOING FORWARD, SO WE SAW THIS REPORT THAT INFLATION WAS NOT DRIVEN BY ENERGY PRICES, BUT ALSO SAID THIS IS INFLATION THAT HAS COME DOWN. THIS IS EXERTING SOME PRESSURE. THE RISK IS TO SEE THE TRANSITION TO CORE INFLATION WHICH IS GOING TO GUIDE ECB FUTURE MOVES. STEPHEN: WE ARE ALSO LOOKING AT A STRONGER DOLLAR BEING PART OF THE PICTURE THAT IS COMING FROM HIGHER ENERGY PRICES AND THE MOVE IN YIELDS. THE EURO, A 16 MONTH LOW. HOW MUCH DOES THAT FACTOR INTO THE INFLATIONARY PICTURE, BUT ALSO THE BROADER ECONOMIC PICTURE? SABRINA: IT ADDS SOME PRESSURE ON INFLATION. WE SO RECENTLY THAT GOOD INFLATION IS INCREASED, MOSTLY REFLECTING HIGHER ENERGY PRICES. ON TOP OF THAT WAS A WEAKER EURO ON INFLATIONARY PRESSURES. OBVIOUSLY, WHAT CAN BE SAID REGARDING ECONOMIC ACTIVITY IS THE LONGER WE SEE THOSE ENERGY PRICES, THE RISK IS TO SEE THIS STAGFLATIONARY SCENARIO RESURFACING WELL FOR THE TIME BEING, THE ECONOMY HAS BEEN PRETTY RESILIENT FACING THE RISE IN ENERGY PRICES. STEPHEN: PLENTY OF PRESSURES ON THOSE INFLATION READINGS AS WE GET THEM THIS MORNING. SABRINA, THEY DIFFERED DROGHEDA. -- THANK YOU FOR JOINING US. ANDY BURNHAM HAS A RADICAL VISION TO CHANGE THE COUNTRY, PLUNGING HEADFIRST INTO SOME OF ITS MOST CONTROVERSIAL AND DIVISIVE ISSUES. >> DEINDUSTRIALIZATION, DEREGULATION, PRIVATIZATION, AUSTERITY, BREXIT. AND WHAT HASN'T GIVEN US? A COUNTRY OF VESTED INTEREST, NOT IN THE PUBLIC INTEREST, WITH POWER HELD IN TWO FEW HANDS AND TOO MANY PLACES LEFT ADRIFT. I AM READY TO DO THINGS MY PREDECESSORS WOULDN'T. I AM WILLING TO BREAK WITH THE DIRECTION OF THE PAST 40 YEARS AND PUT BRITAIN ON A NEW PATH. BUILD A NEW ECONOMY AND A NEW POLITICS. THAT IS THE CASE I MAKE FOR YOU TODAY. STEPHEN: BLOOMBERG'S JAMES WILCOCK'S LIFE THE LABOR CONFERENCE IN LIVERPOOL FOR US THIS MORNING. JAMES, THIS WAS A WIDE-RANGING POLICY PITCH FROM THE PRIME MINISTER. HOW BIG A GAMBLE IS IT FOR ANDY BURNHAM? JAMES: IT WILL GO DOWN AS ONE OF THE MOST CONSEQUENTIAL ELECTION SPEECHES IN MODERN POLITICAL HISTORY. I SAY THE WORD ELECTION BECAUSE I WAS TALKING TO ONE POLLSTER LAST NIGHT WHO SAID HOW COULD HE ANNOUNCE SUCH A BIG AGENDA, TALKING ABOUT POTENTIAL NATIONALIZATION OF UTILITIES, TOTAL ELECTORAL REFORM, AND THEN NOT HAVING AN ELECTION UNTIL 2029? THAT IS WHY WE USE THE WORD GAMBLE. ANDY BURNHAM HAS UNITED THE LABOUR PARTY, 94% TOLD US THEY BACK THIS LABOR LEADER. THE QUESTION IS WHAT DOES THE REST OF THE COUNTRY THINK ABOUT SUCH A BOLD, RADICAL AGENDA? ALREADY YOU HAVE THE CONSERVATIVES AND REFORM SAYING THAT VERNON IS GOING TO CUT YOUR PENSIONS RATHER THAN DEAL WITH THE MASSIVE WELFARE BILL, AND ALL THIS FOUR WEEKS OUT FROM THE BUDGET. STEPHEN: BLOOMBERG ECONOMICS SAYS THAT BURNHAM IS FOCUSING ON THE LONG-TERM. THAT WAS A LOT OF THE CONVERSATION WITH THAT HE WAS SETTING THE 2030 HORIZON. WHAT ABOUT THE SHORT TERM FOR THE PRIME MINISTER? JAMES: THAT IS THE BUDGET. THE QUESTIONS HE OR ANDY BURNHAM WANTS TO TELL A STORY. HIS JOB WAS TO ANNOUNCE HIMSELF AS LEADER OF THE PARTY, CLAIMED THE PARTY THAT HE TOOK FROM KEIR STARMER JUST A FEW MONTHS AGO, AND PAINT HIS VISION OF WHAT BURNHAM'S BRITAIN WOULD LOOK LIKE. TO ALL THE DELEGATES I'VE BEEN SPEAKING TO HERE, HE'S BEEN A MASSIVE HIT. I THINK THE QUESTION IS HOW DO THE SUMS MATCH UP TO THE VIBES? THE VIBES HAVE BEEN OVERWHELMINGLY POSITIVE BUT THE BUSINESS DELEGATES SAY BEHIND THE SCENES THEY SET BEEN REMARKABLY LIGHT ON DETAIL. AND AS WE HEAD INTO THIS BUDGET, BLOOMBERG ECONOMICS ESTIMATES MAY BE 10 BILLION POUNDS OF HEADROOM. SO THAT LEAVES A LOT OF BUSINESSES WONDERING WHAT TAX DECISIONS ARE GOING TO BE COMING OUT IN THE VERY SHORT TERM. THERE IS A DIFFICULT, HARDER QUESTION FOR BURNING TO ANSWER. STEPHEN: REPORTER JAMES WILCOCK LIVE FOR US THIS MORNING, THANK YOU. THE PREMIER LEAGUE SAYS THAT MANCHESTER CITY ARTIFICIALLY BOOSTED ITS FINANCIAL RESULTS BY MORE THAN 900 BILLION POUNDS. THE CLUB IS FOUND GUILTY ON ALL CHARGES RELATED TO SERIOUS BREACHES OF FINANCIAL RULES OVER A PERIOD OF NINE SEASONS. LET'S GET MORE NOW FROM WILL DAVIES. THIS HAS COME AFTER A YEARS-LONG INVESTIGATION INTO THE CLUB. WHAT HAVE THEY BEEN ACCUSED OF, FIRST OF ALL? >> THIS IS QUITE THE EXPLOSIVE VERDICT AFTER A VERY LENGTHY STORY. IT HAS BEEN THE KEY FINDING THAT HAS ARRANGED SHAM COMMERCIAL CONTRACTS, ESSENTIALLY, WHICH IS A BREACH OF FINANCIAL REGULATIONS TO THE TUNE OF ONE BILLION U.S. DOLLARS. AND OF COURSE FOR THAT, IT WOULD GET AN UNFAIR ADVANTAGE. RAMIFICATIONS ARE POTENTIALLY HUGE. OTHER CLUBS WILL OBVIOUSLY BE UPSET ABOUT MISSED OPPORTUNITIES, AND BEYOND THAT, MAN CITY HAS BEEN ACCUSED OF NOT COOPERATING WITH THE INVESTIGATION AND MAKING CONCERTED EFFORTS. IT IS A VERY DAMNING FINDING. STEPHEN: IT CERTAINLY IS. HOW HAS THE CLUB RESPONDED TO IT, THEN? >> THE CLUB SAYS IT IS INNOCENT AND HAS EVIDENCE TO SUPPORT THAT AND CAN APPEAL BY THE END OF THE WEEK. AND THE PUNISHMENTS AND THE SANCTIONS WILL BE DECIDED AT ANOTHER HEARING. SO LIKE I SAID, THERE'S LOTS TO RUN. THEY SAY THEY ARE INNOCENT. THERE HAS BEEN PROCEEDING FOR SOME PUNISHMENT IN THE PAST, BUT NEVER OF THE CASE OF THIS MAGNITUDE. THERE ARE VARIOUS SANCTIONS THAT IT COULD FACE, BUT WE WILL HAVE TO WAIT AND FIND OUT. THERE WILL BE A LOT OF VERY UPSET PEOPLE WITHIN FOOTBALL AND MAN CITY ITSELF. WE WILL SEE HOW IT PANS OUT, BUT NEXT UP IS LIVERPOOL WHEN THE TEAMS COME BACK FROM AN INTERNATIONAL BREAK IN A WEEK OR SO. THAT COULD BE AN INTERESTING ARENA TO SEE HOW THE RECEPTION IS. STEPHEN: WILL DAVIES, THANK YOU VERY MUCH FOR BRINGING US UP-TO-DATE ON THAT STORY. COMING UP, READY TO PAY THE BILL. LITHUANIA'S PRIME MINISTER TELLS BLOOMBERG HIS COUNTRY WOULD DEFINITELY HOST U.S. TROOPS ON A PERMANENT BASIS, IF WASHINGTON AGREES. THAT INTERVIEW IS NEXT. THIS IS BLOOMBERG. STEPHEN: WELCOME BACK TO BLOOMBERG "DAYBREAK: EUROPE." BLOOMBERG HAS LEARNED PRESIDENT TRUMP IS SET TO UNVEIL SOUTH KOREA'S PLAN TO INVEST ABOUT $200 BILLION IN THE U.S. UNDER LAST YEAR'S TRADE DEAL. WE ARE TOLD THAT INCLUDES 54 BILLION DOLLARS THE ALASKA LNG PROJECT WHICH WOULD TRANSPORT NATURAL GAS ACROSS THE STATE FOR EXPORT TO ASIAN BUYERS. BOEING HAS BEATEN -- TO WIN A CONTRACT TO PRODUCE THE NAVY'S NEXT TOP GUN FIGHTER JET. THE DEAL VALUED AT MORE THAN $20 BILLION IS THE SECOND MAJOR FIGHTER JET PROGRAM THAT BOEING HAS WON IN AS MANY YEARS. IT COMES AFTER NASA SAID THAT IT EXPECTS TO FLY AS MANY AS FIVE MISSIONS TO THE INTERNATIONAL SPACE STATION USING BOEING STARLINER CREW CAPSULE. AND GERMANY'S CHANCELLOR SAYS TALKS BETWEEN THE GERMAN AND RUSSIAN FOREIGN MINISTER'S ON THE SIDELINES OF THE YUAN GENERAL ASSEMBLY SHOW THE KREMLIN HAS NO INTEREST IN SERIOUS NEGOTIATIONS TO END THE WAR IN UKRAINE. HE SAYS GERMANY WILL INSTEAD FOCUS ON SUPPORTING UKRAINE AND ITS DEFENSE AGAINST RUSSIA'S INVASION. LITHUANIA'S PRIME MINISTER SAYS THE COUNTRY IS READY TO PAY THE BILL TO PERMANENTLY HOST U.S. TROOPS AND HAS RAISED THE ISSUE WITH WASHINGTON. WE SPOKE TO OLIVER CROOK. >> LITHUANIA IS AN EASTERN FLANK COUNTRY, THE EASTERN BORDER OF THE EUROPEAN UNION. AND WE SEE A TENDENCY, AND NOT A GOOD TENDENCY OF VARIOUS ATTACKS, MEDIA RADICAL BALLOONS FLYING IN, DRONES FLYING IN. WE ALSO FACE SO-CALLED INSTRUMENTALIZED MIGRATION. THE RUSSIAN REGIME IS PUSHING MIGRANTS TO ILLEGALLY CROSS THE BORDER ALSO VERY MUCH INTO THE PRIME MINISTER'S FINANCIAL FRAMEWORK. SO NEW DISCUSSIONS RELATED TO BUDGET. NEXT TO IT ALL, PRIORITIES AND TOPICS TO COVER. SECURITY AND BUDGET ARE THE MAIN ONES. >> ANOTHER TOPIC TAKING A LOT OF ATTENTION IS AMERICAN TROOP MOVEMENTS ACROSS THE DIFFERENT NATIONS OF EUROPE. WE KNOW THE TRUMP ADMINISTRATION IS GOING TO RESCALE, IN SOME WAY, THE TRUTH PICK -- PLACEMENT. HAVE CONFIRMATION THAT AMERICAN TROOPS ARE NOW BACK ON THEIR WAY TO LITHUANIA. CAN YOU DISCLOSE WHAT PROPORTION, HOW MANY, AND WHAT BASIS? IS THIS A PERMANENT STATIONING? >> WE ARE SEEKING PERMANENT STATIONING, BUT CURRENT DEPLOYMENT AS I BELIEVE IS NOT A PERMANENT ONE. THEY ARE SENDING APPROXIMATELY THE SAME NUMBER FROM WHAT WE ARE RECEIVING, IT IS UP TO 1000 TROOPS. WE ARE HAPPY ABOUT IT. WE ARE HAPPY THAT THE TRUMP ADMINISTRATION ACTUALLY REACTED TO OUR WISH OF HAVING AMERICAN TROOPS ON THE GROUND. WE ARE FEELING SAFER ABOUT IT. OF COURSE, WE ARE LOOKING FOR NOT JUST THE AMERICAN TROOPS HERE, BUT ALSO THE GERMAN BRIGADE AT THE END OF NEXT YEAR WITH 5000 SOLDIERS, 5000 TROOPS. SO IN A WAY, I'M HAPPY THAT DESPITE ALL THE SITUATIONS BACK AND FORTH ABOUT NATO AND AMERICA'S PREVAILING IN NATO AND MOVES FORWARD AS A SOCIETY TO FEEL SAFER. >> COULD YOU SEE YOURSELVES OPENING UP AN AMERICAN BASE IN LITHUANIA? I KNOW THAT THE POLES HAVE TALKED ABOUT A FORT TRUMP. >> WE WOULD DEFINITELY GO FORWARD, WE WOULD ENSURE THE BEST POSSIBLE CONDITIONS FOR THE TROOPS, FOR THE BASE TO BE ESTABLISHED. ACTUALLY, WE ARE SEEKING THAT BECAUSE I WAS VISITING THE SPECIAL ENVOY TO NEGOTIATE THE TALK ABOUT THE RELEASE OF IMPRISONED ACTIVISTS AND THEREFORE I WAS ADDRESSING HIM OK, WE WOULD LIKE TO ACTUALLY HAVE THE AMERICAN TROOPS WITH A PERMANENT STATIONING. AND WE ARE READY TO PAY THE BILL IF THAT IS THE CASE. STEPHEN: LITHUANIA'S PRIME MINISTER SPEAKING TO OLIVER CROOK. ABU DHABI'S CROWN PRINCE IS SPENDING BILLIONS TRYING TO BYPASS IRAN'S GRID ON THE STRAIT OF HORMUZ. THE FERRY HUNDRED BILLION DOLLAR WEALTH FUND IS NOW A KEY PLAYER IN THE UAE'S SO-CALLED ZERO HORMUZ STRATEGY. LET'S GET MORE ON TODAY'S BIG TECH REPORT WITH ALEX TAYLOR. ALEX, TELL US MORE ABOUT WHAT THE CROWN PRINCE AND THE WIDER UAE IS TRYING TO DO HERE? >> SO THE UAE IS TRYING TO SPEND BILLIONS OF DOLLARS IN A BID TO BYPASS THE STRAIT OF HORMUZ, PARTICULARLY IN BUILDING OLD INFRASTRUCTURE, AND IT REALLY PUTS THE CROWN PRINCE RIGHT AT THE HEART OF THOSE EFFORTS BECAUSE HE IS THE CHAIRMAN OF A DOBBY'S LATEST SOVEREIGN WEALTH FUNDS -- ABU DHABI'S LATEST SOVEREIGN WEALTH FUND. THAT VALUES THE COMPANY AT AROUND $9 BILLION. THE COMPANY IS EXPECTED TO SPEND TENS OF BILLIONS OF DOLLARS IN THE COMING MONTHS AND YEARS ON REBUILDING AND BUILDING NEW INFRASTRUCTURE, SO IT IS REALLY A KEY ENTITY TO WATCH AS THE UAE PERCEIVES ZERO HORMUZ. STEPHEN: HOW DIFFICULT WITH ACHIEVING ZERO HORMUZ THE? -- BE? ALEX: IN THE WORDS OF SCOTT BESSENT, I THINK IT IS REALLY EASIER SAID THAN DONE. IRAN WAR STRETCHED ON FOR MONTHS WITH NO END IN SIGHT. EVEN THE ENERGY MINISTER DESCRIBED THE COMMENT AS COMPLETELY WRONG. I THINK SAUDI ARABIA REALLY TELLS A CAUTIONARY TALE OF THE DIFFICULTIES IN BYPASSING THE STRAIT OF HORMUZ. THE SAUDI CROWN PRINCE PUSHED TO BYPASS THE STRAIT BY EXPANDING A PIPELINE ON THE RED SEA, YET THE TEMPORARY -- KINGDOM HAS TEMPORARILY HAD THIS ALTERNATIVE AFTER ATTACKS FROM THE HOUTHIS IN YEMEN. IT REALLY IS A LOT EASIER SAID THAN DONE. I GUESS WE WILL HAVE TO SEE HOW THE WAR PANS OUT. STEPHEN: ALEX FROM ABU DHABI, THANK YOU. CONTEE MORE COMING UP NEXT. STAY WITH US. THIS IS BLOOMBERG. ♪ >> WE HAVE TO MAKE POLICY FOR THE ECONOMY AS WE UNDERSTAND IT TODAY. RUNNING MONETARY POLICY EASIER THAN IT SHOULD BE ON THIS EXPECTATION OF A FUTURE PRODUCTIVITY BOOM WITH AN UNCERTAIN ARRIVAL. STEPHEN: ST. LOUIS FED PRESIDENT SPEAKING AS WE ARE CONTINUING TO THINK ABOUT THE PRESSURE ON BONDS AS BECOME TOWARD THE END OF THE MONTH OF SEPTEMBER. TRADITIONALLY, THE WORST MONTH AT THIS CHART SHOWS THE PERFORMANCE OF BONDS, BUT BY THE LOOKS OF THIS AS WELL, OCTOBER COULD BE A LITTLE BIT ROUGH. NONE OF THOSE UNDERLYING PRESSURES BEING REMOVED FOR THE OUTLOOK FOR BONDS AS WELL. WE CAN TAKE A LOOK ABOUT HER TRADERS ARE POSITIONING AROUND THESE HIGHER YIELDS AS WE SEEN THESE MULTI-DECADE HIGHS AS WELL. TRADERS LOOKING FOR PROTECTION AGAINST A CONTINUED RISE IN YIELDS, THE PREMIUM PAID TO HEDGE FUTURES HAS DROPPED SHARPLY OVER THE PAST WEEK AS WELL AS TRADERS ARE STILL THINKING ABOUT THE CONTINUING PRESSURES WE ARE GOING TO SEE IN THIS SPACE AS WELL. THAT IS A CONTINUING THEME TO THINK ABOUT AHEAD OF THAT ESSENTIAL DATA WE ARE GOING TO GET LATER ON TODAY. AND IN THE EQUITY MARKETS IF WE JUST TAKE A LOOK AT HOW WE DID HAVE THOSE U.S. CONSUMER CONFIDENCE NUMBERS COMING AT YESTERDAY AS WELL WHICH REALLY UNDERLINED SOME OF THE CONSUMER CONCERNS IN THE ECONOMY, U.S. SEMICONDUCTORS LARGELY IGNORING THE CONSUMER AS WELL. THAT IS A PERFORMANCE TO WATCH GOING INTO TODAY'S TRADING SESSION WITH THOSE MICRON EARNINGS TO WATCH OUT FOR. COMING UP LATER, LUIGI LOVAGLIO WILL BE JOINING. "THE OPENING TRADE" IS UP NEXT FOR YOU NOW. THIS IS BLOOMBERG.