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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Day Bake You At podcast, available every morning on Apple,

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Speaker 1: Spotify or wherever you listen. It's Wednesday, the Seventh Brugs

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Speaker 1: here in London. I'm Caroline Hepki and.

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Speaker 2: I'm Stephen Carroll. Coming up today. The Bank of Japan's

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Speaker 2: deputy governor says interest rate hikes are off the table

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Speaker 2: while markets are unstable.

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Speaker 1: Goldman Sachs as David Solomon tells Bloomberg that markets shouldn't

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Speaker 1: expect any emergency FED rate.

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Speaker 2: Cuts, plus extra police forces are deployed in the UK

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Speaker 2: as far right rioters make plans for further unrest tonight.

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Speaker 1: Let's start with a roundup of our top story. The

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Speaker 1: Bank of Japan's deputy governor says that policymakers shouldn't raise

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Speaker 1: interest rates until markets stabilize. The strong dubbish signal from

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Speaker 1: Shinichi Uchidah comes after major moves in the yen and

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Speaker 1: record breaking swings in Japanese stocks in the wake of

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Speaker 1: a rate hike last week. The yen has weakened more

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Speaker 1: than two percent immediately after Achieda's comments. Namura's executive of

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Speaker 1: a certain head of wholesale Christopher Wilcox defended the Central Bank.

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Speaker 3: I would say that the BOJ has been completely vindicated.

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Speaker 3: They always knew that this unwind was going to be

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Speaker 3: very difficult. That's why they've been so slow and so cautious.

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Speaker 3: And yes, that puts some pressure on the end for

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Speaker 3: a little while. And think about the carry trade. The

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Speaker 3: point of the carry trade is that if they didn't

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Speaker 3: start to move, the carry trade would only have got bigger.

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Speaker 3: The end disruption of the unwinding of the carrent trade

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Speaker 3: would have been even bigger. So I think the BOJ

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Speaker 3: is playing it extremely smartly.

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Speaker 1: The Mirror's Christopher Wilcox there, who added that he sees

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Speaker 1: us a recession risk as the primary market driver. The

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Speaker 1: three day meltdown in Japan's stocks, though, has been tallied

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Speaker 1: at one point one trillion dollars, the equivalent size of

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Speaker 1: Sweden's entire stock market.

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Speaker 2: Goldman Sachs CEO David Staloman says markets shouldn't count on

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Speaker 2: the FED stepping in with an emergency ratecost. It comes

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Speaker 2: as future as in Upson's data to traders are cashing

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Speaker 2: in on aggressive rate cut bets. In an interview for

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Speaker 2: the upcoming episode of the David Rubinstein Show Peer to

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Speaker 2: Peer Conversations, Solomon says he doubts the Fed would act

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Speaker 2: before September.

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Speaker 4: The market expectation is certainly for cuts in the fall.

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Speaker 4: I've been more cautious around inter straight cuts all year.

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Speaker 4: As you remember, the market expectation early in the year

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Speaker 4: was for six of seven cuts based on the economic

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Speaker 4: data we're seen now in the messaging from the Fed.

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Speaker 4: You know, I think it's likely that we'll see a

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Speaker 4: cut or two in the fall, but I think you've

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Speaker 4: still got to wait and see as things unfold.

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Speaker 2: The boss of Goldman added he felt the stock market

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Speaker 2: correction could might be healthy and forecasts more volatility to come.

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Speaker 2: Markets are pricing in around forty basis points in cuts

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Speaker 2: from the Fed in September. Meanwhile, Bloomberg opinion columnist and

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Speaker 2: former FED official Bill Dudley says he switched to advocating

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Speaker 2: for rate cuts two weeks ago. Not a moment too soon,

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Speaker 2: he writes this morning, the Fed should cut rates immediately,

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Speaker 2: but an emergency move by Pal is unlikely.

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Speaker 1: UK police forces have deployed extra officers because of concerns

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Speaker 1: about further unrest today after what the Metropolitan Police is

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Speaker 1: called the worst bate of violent disorder in the country

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Speaker 1: in the last decade. Far right activists are circulating calls

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Speaker 1: online for demonstrations at refugee and immigration centers and law

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Speaker 1: firms representing asylum seekers. Last night, the Prime Minister held

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Speaker 1: his second emergency security meeting in two days over the

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Speaker 1: anti migrant and anti Muslim disorder. Keir Starmer says that

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Speaker 1: appropriate action is being taken.

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Speaker 5: We obviously went through the available intelligence the deployment of

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Speaker 5: officers because our first duties to ensure that our communities

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Speaker 5: are safe. And that's why I say again anybody involving

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Speaker 5: themselves in this disorder is going to feel full force

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Speaker 5: of the law.

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Speaker 1: The Prime Minister, speaking their Home Secretary Yvette Cooper has

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Speaker 1: confirmed that police will get government support for overtime pay

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Speaker 1: and any other resources they need. Her office says that

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Speaker 1: almost three hundred and eighty people involved in volin disorder

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Speaker 1: have been arrested and about one hundred have been charged.

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Speaker 2: To the US, where Kamala Harris is kicking off a

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Speaker 2: crucial part of her campaign alongside new running mate Tim Waltz.

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Speaker 2: The current Vice President, is aiming to put rival Donald

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Speaker 2: Trump on the defensive in key swing states. Speaking alongside

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Speaker 2: Harris on stage for the first time, Minnesota Governor Tim

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Speaker 2: Walts criticized the Republican candidate.

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Speaker 1: Donald Trump's not fighting for you or your family.

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Speaker 6: He never said at that kitchen table like the one

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Speaker 6: I grew up at, wondering how we were going to

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Speaker 6: pay the bills.

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Speaker 7: He said his country club up in mar.

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Speaker 4: Lago, wondering how he can cut taxes for his rich friends.

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Speaker 2: As Democratic vice presidential candidate Tim Waltz speaking there Paul's show,

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Speaker 2: Harris has eliminated the advantage Trump held for much of

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Speaker 2: the summer when he faced Donald excuse me, when he

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Speaker 2: faced President Joe Biden. Survey released yesterday shows the vice

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Speaker 2: president leading Trump fifty one percent of forty eight percent

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Speaker 2: among registers photos nationally.

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Speaker 1: Hamas has named Yea Sinhwa, the alleged mastermind of the

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Speaker 1: group's October seventh attack on Israel, as its new political leader.

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Speaker 1: Sinoa succeeds Ismailhaneir, a key moderator of whose assassination last

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Speaker 1: week has set back cease Far talks. Despite that, the

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Speaker 1: US Sectory of State Anthony Blincoln says that a deal

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Speaker 1: could be near.

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Speaker 8: The negotiations have now reached a final stage, and they

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Speaker 8: agreed on the urgency of bringing this process to closure.

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Speaker 8: Concluding that agreement and avoiding any action that.

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Speaker 7: Could somehow disrupt it is the only path ending the

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Speaker 7: conflict in Gaza and bringing calm to the region. It's

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Speaker 7: critical that all parties work to finalize an agreement as

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Speaker 7: soon as possible.

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Speaker 1: Blincoln has been one of these central figures urging talks

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Speaker 1: between Israel and Hamas, designated a terrorist organization by the

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Speaker 1: US and Europe, but choosing sin while the group appears

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Speaker 1: to be sending a message of defiance to Israel, the US,

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Speaker 1: and countries in the region.

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Speaker 2: Novonordosk has nodged up its sales outlook for the year

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Speaker 2: as it increases supply of its blockbustered diabetes and weight

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Speaker 2: glass drugs a Zempic and Weegavy. The Europe's largest company,

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Speaker 2: says revenue for the year will rise from twenty two

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Speaker 2: to twenty eight percent at constant exchange rates. Its shares

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Speaker 2: have gained twenty seven percent this year ahead of today's open.

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Speaker 1: Now, just in terms of other stocks that we're watching,

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Speaker 1: shares of Airbnb tumbled by more than sixteen percent after

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Speaker 1: the company warned of slowing demand from American holiday makers.

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Speaker 1: Second quarter figures for sales missed analyst estimates in what

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Speaker 1: is normally the home rental platform's peak quarter. If the

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Speaker 1: declines hold when the stock opens later, it could not

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Speaker 1: its biggest inter day drop on record. Now in a moment,

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Speaker 1: we're going to get more on the markets and what's

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Speaker 1: happening today after the mountdown on Monday, and also we'll

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Speaker 1: get to the earning story around Nova Nordisk, of course

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Speaker 1: most valuable company in Europe, so that'll be interesting. But

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Speaker 1: this caught my eye as well as we're talking about

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Speaker 1: this extraordinary week in August for markets, the abrupt departure

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Speaker 1: of Marko Kolonovitch JP Morgan Chase, of course, the Strashus,

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Speaker 1: remember we reported on it only about a month ago.

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Speaker 1: He stuck to his warnings that there was market trouble ahead.

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Speaker 1: Potentially notable War Street pessimist, he left abruptly on the

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Speaker 1: third of July after a nineteen year stint, and we've

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Speaker 1: reported on the Bloomberg terminor this morning around you know,

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Speaker 1: the chatter people at the time wondered whether it might

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Speaker 1: be the sign of a market top since he's gone

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Speaker 1: S and P five hundred down five percent.

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Speaker 2: No story about hindsight and there somewhere, I think a

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Speaker 2: little wonderful thing. Let's look forward though, to what's been

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Speaker 2: happening on markets today. We've seen further rallying on shares

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Speaker 2: in Asia, weakening of the Japanese yen after comments in

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Speaker 2: the Bank of Japan's deputy governor saying the bank won't

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Speaker 2: raise interest data shouldn't raise interest rates while markets are

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Speaker 2: on state our currency and right stratch, Van Ram joins

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Speaker 2: us for more than talk us through. What did these

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Speaker 2: comments from the deputy governor of the Bank of Japan

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Speaker 2: do to markets?

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Speaker 9: Owning Stephen, it kind of deters an immediate in mind

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Speaker 9: of the carry trades, and in that sense it restore

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Speaker 9: stability in the markets. Even before Uchia's comments, the markets

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Speaker 9: were kind of regaining the policy saw that with the

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Speaker 9: stock markets yesterday they came back big time in the US.

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Speaker 9: So Uchida's comments will boost risk sentiment even more on

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Speaker 9: the policy front. That means that the FED will be

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Speaker 9: no hurry to cut trades, and neither will the ECP.

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Speaker 9: So we're going to see these bond deals take higher

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Speaker 9: on the back of those remarks, and it kind of

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Speaker 9: Uchida is kind of say, signaling that you know, the

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Speaker 9: PUG is not in a hurry to raise raids, so

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Speaker 9: you know it is going to keep again on the

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Speaker 9: back foot for now.

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Speaker 1: Okay. In terms of how bearish the markets are, I'm

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Speaker 1: just thinking back to sell off six and a half

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Speaker 1: trillion dollars wiped off the value of markets, and that

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Speaker 1: has really shaken people around the world. How would you

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Speaker 1: assess the bullish versus bearish themes in markets now?

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Speaker 9: Then, Karlyn, I think that the markets are While the

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Speaker 9: markets have rebounded, no question, but it feels like a

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Speaker 9: very tenuous, very tentative kind of rebound. There is still

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Speaker 9: a lot of carry trade positioning that is yet to

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Speaker 9: be unmound. We know that we discussed yesterday about how

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Speaker 9: GP Morgan remarking that is still fifty percent of the

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Speaker 9: carry trades are yet to be unmound. So while those

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Speaker 9: traders will be kind of heaving a sigh of relief

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Speaker 9: at the turn of events over the past twenty four hours,

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Speaker 9: nervousness is still the buzz is still the watchword. I mean,

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Speaker 9: this volatility could be episodic, and our current fits and stops.

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Speaker 9: So despite toch he Tho's remarks were completely out of

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Speaker 9: the words. Yet we get the USCPI print next week,

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Speaker 9: so that'll really shape the path ahead for the markets

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Speaker 9: with regards to where we go with the FED funds

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Speaker 9: rate and what that implies for the rest of the

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Speaker 9: global markets.

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Speaker 2: Yeah, because indeed we've been bringing our listeners' comments from

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Speaker 2: Goldman Sachs CEO David Solomon speaking to Bloomberg talking about

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Speaker 2: the Fed, he doesn't think they're going to take any

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Speaker 2: emergency steps. What is the expectation now around where the

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Speaker 2: Fed goes from here? We've seen a slight pairing back

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Speaker 2: from those big move in bets that traders were making

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Speaker 2: earlier this week.

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Speaker 9: I think the first point to be made, Stephen is

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Speaker 9: that you know, there is no question for Fed emergency

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Speaker 9: rate cut. They are not going to come out of

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Speaker 9: the policy cycle and say, look, you know the markets

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Speaker 9: are in meltdown mode. If it continues, If the markets

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Speaker 9: are in meltdown mode, so we need to accommodate the market.

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Speaker 9: So here is a twenty five basis point rate cut

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Speaker 9: that's not going to happen. That's kind of preposterous idea

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Speaker 9: to start with, that was never going to be a starter.

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Speaker 9: The second point is going to be what the trajectory

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Speaker 9: is going to be, assuming that the markets settle. That

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Speaker 9: will be dependent. As I just mentioned on the USCPI print. Now,

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Speaker 9: cold PCE is already kind of converged to the Fed's

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Speaker 9: twenty twenty four target of two point six percent. So

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Speaker 9: you know, do do we need the FED mid mid

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Speaker 9: funds FED funds rate at five point thirty seven five

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Speaker 9: at the moment, we don't, And that policy rate is

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Speaker 9: kind of very real. Policy rate is very restrictive in

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Speaker 9: the US, and if inflation continues to mellow, we should

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Speaker 9: expect perhaps two rate cuts from the Fed this year.

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Speaker 1: Okay, so two rate cuts penciled in, then, thank you

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Speaker 1: so much for being with us. It's been both currency

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Speaker 1: and rate stretches. Then, ram I think giving us some

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Speaker 1: interesting context around well, what's been happening with markets in

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Speaker 1: the moves this morning, especially those Bank of Japan comments.

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Speaker 2: Also and Novnords because cut its profit forecast for the

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Speaker 2: years it's blockbuster weight loss drug Waga Vfel sure of

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Speaker 2: analysts expectations for quarterly sales now as he's operating profit

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Speaker 2: growing between twenty and twenty eight percent, which is down

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Speaker 2: slightly from its earlier forecast. Joining us now for more

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Speaker 2: from Copenhagen as our reporter son of us Sano, Good

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Speaker 2: morning to you. Novo racing to ramp up supplies. Talk

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Speaker 2: us through the headlines from this earnings report.

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Speaker 6: Yeah, good morning. Yes, as you say, it is a

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Speaker 6: big question at the moment, how quickly can Normal ramp

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Speaker 6: up supplies to meet the huge amoun for its blockbuster

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Speaker 6: drugs or Zempic and GOV. We are seeing sales going

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Speaker 6: up this quarter, so it indicates the Normal is somewhat

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Speaker 6: managing to increase supplies and that is extremely important. But

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Speaker 6: as you also say, it missed some analyst expectations on

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Speaker 6: with GOV sales for example, and we also saw that

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Speaker 6: Norval went out and said it would continue to enforce

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Speaker 6: a cap on sales of with Goovy started doses in

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Speaker 6: the US. So it shows also that there is some

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Speaker 6: way to go for Normal in terms of meeting this

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Speaker 6: high demand and also eating investor expectations.

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Speaker 1: Yes, absolutely huge investor expectations. So tell us about the

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Speaker 1: guidance then looking forwards to sales and revenue. What can

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Speaker 1: we take out of the report this morning?

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Speaker 6: Yeah, the market really has been waiting to see what

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Speaker 6: would happen this time around, because Normal in the last

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Speaker 6: few quarters has raised its financial guidance. So today we

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Speaker 6: saw Normal raised its sales guidance for the year, which

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Speaker 6: is of course good news for Normal, but it also

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Speaker 6: cut its guidance for its operating profit. So it really

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Speaker 6: shows that despite the popularity of its drugs, they are

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Speaker 6: facing some bumps in the road. It had to take

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Speaker 6: quite a big impairment charge in the past quarter because

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Speaker 6: of a failure in the late stage trial of an

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Speaker 6: experimental heart drug, so that of course has had a

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Speaker 6: dragon Normal profits. And then we also saw that R

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Speaker 6: and D costs were higher than analysts had expected to

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Speaker 6: These are likely to be some of the drivers made

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Speaker 6: Normal slightly lowers its profit expectations for the year.

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Speaker 2: What about competition in that space? Now, Novo has been

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Speaker 2: the leader in these drugs, these diabetes drugs, which of

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Speaker 2: course have been used for obesity as well. I mean,

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Speaker 2: how much I suppose it's that impacting the outlook for

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Speaker 2: the company.

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Speaker 6: Yeah, at the moment, Normal tends to say there is

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Speaker 6: a space for both itself and its competitors. Lily now

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Speaker 6: has a weight loss drug already on the market, but

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Speaker 6: the demand is so huge that that there's not true

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Speaker 6: competition just yet. But we are seeing other players into

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Speaker 6: this big market for weight loss drugs. Swiss pharmaceutical Giant Russia.

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Speaker 6: A couple of weeks ago, they announced that their weight

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Speaker 6: loss pill had shown some promise in an early stage study.

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Speaker 6: Also last week, US based Vikings Therapeutics said that they

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Speaker 6: would advance it's weight loss drug and also look to

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Speaker 6: explore a monthly dozing off this medicine. So competition is

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Speaker 6: intensifying and that could put pressure on normal down the road.

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Speaker 6: I'd say another risk probably that investors are especially following

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Speaker 6: kind of on the short term is regulators and ensures

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Speaker 6: that are now putting a lot of pressure on Norval

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Speaker 6: to lower its prices. So those are kind of the

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Speaker 6: two things, the competition and regulatory pressure.

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Speaker 1: Okay, that's very interesting. Yeah, and you mentioned Eli Lilly,

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Speaker 1: the competitor. Of course, they report earnings on Thursday. Sanna,

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Speaker 1: thank you so much for being with us this morning.

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Speaker 1: That is our reporter in Copenhagen, Sana Vas. Then on

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Speaker 1: the Nova Nordisk earnings, I mean, incredible, more than a

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Speaker 1: billion people living with obest in twenty twenty two. So

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Speaker 1: that's the driver for this market and this huge competition

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Speaker 1: over of course the most valuable company now in Europe.

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Speaker 2: They're here in the UK. The Prime Minister of Care

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Speaker 2: Starmer says rioters and keyboard warriors alike will face the

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Speaker 2: full force of the law if far right activists follow

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Speaker 2: through with plans to converge on immigration centers. Later tonight,

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Speaker 2: joining us now to discuss as Bloomberg's tewa Ada Bio Tea,

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Speaker 2: where let's just first of all start with WHI are

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Speaker 2: the situation with these rights in the UK is now?

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Speaker 10: So we're entering the ninth day of the unrest since

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Speaker 10: those three young girls were stabbed in Southport, and that

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Speaker 10: unrested start there in the northwest of England, but after

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Speaker 10: online misinformation it has slightly changed shape into a broader

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Speaker 10: anti migrant and violent demonstration. So over four hundred people

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Speaker 10: have been arrested so far. That's in the cities including

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Speaker 10: Liverpool and Manchester which have been affected. Also London we

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Speaker 10: saw one hundred people arrested in Westminster, for example. So

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Speaker 10: there are no reports of violence elsewhere in Wales and

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Speaker 10: Scotland so far. But where is the threat of more

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Speaker 10: to come. So police are actually saying now that there

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Speaker 10: are messages circulating online reportedly being shared by far right

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Speaker 10: activists and those are calling for demonstrations at refugee immigration

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Speaker 10: centers and law firms that also represent asylum seekers. So

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Speaker 10: much of is being made of the role in social

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Speaker 10: media actually in all of this platforms and messaging services

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Speaker 10: in sort of encouraging and fueling the proliferation of this violence.

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Speaker 10: And in response, actually the Prime Minister Kistarma has pledged

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Speaker 10: to prosecute those guilty of online incitement as well as

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Speaker 10: actual physical violence.

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Speaker 9: Yeah.

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Speaker 1: Absolutely, speaking of which what is the government and police

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Speaker 1: response them? What are they doing about it?

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Speaker 10: So kis Darma has been very clear in his assertion

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Speaker 10: that the perpetrators will face the full force.

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Speaker 1: Of the law.

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Speaker 10: So far, we've had two emergency security or COBRA meetings

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Speaker 10: in the last two days. The Prime Minister has emphasized

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Speaker 10: what's already been done, so he is driving home that

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Speaker 10: point that four hundred arrests have taken place, one hundred

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Speaker 10: have been charged. Some actually in relation to that online activity.

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Speaker 10: We've seen this week the first conviction for online involvement

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Speaker 10: through Facebook post Kistam is also emphasizing the speed with

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Speaker 10: which he's acting. He says he's expecting substantive sentencing before

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Speaker 10: the end of next week. And what stands out really

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Speaker 10: is that the Prime Minister alongside the government are very

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Speaker 10: keen to make clear that they are acting quickly and

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Speaker 10: that their criminal justice system will act in order to

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Speaker 10: bring those involved in this to justice.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: stories making news from London to Wall Street and beyond.

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Speaker 2: I'm Caroline Hipka and I'm Stephen Carol. Join us again

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