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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: They say it's the Bloomberg Daybreak. Youurate podcast available every

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Speaker 2: morning on Apple, Spotify or wherever you listen. It's Monday,

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Speaker 2: the seventh of April in London. I'm Stephen Carroll coming

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Speaker 2: up today. The global stock market route deepens as reciprocal tariffs,

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Speaker 2: recession fears, and growing retaliation concerns sent investors fleeing from

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Speaker 2: risk assets. Donald Trump rejects the reaction from traders as

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Speaker 2: he remains defiant on his global tariff barrage. Plus, the

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Speaker 2: only certainty is uncertainty. Bill Ackman warns of an economic

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Speaker 2: nuclear winter, as Cairs Starmer says, the world as we

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Speaker 2: knew it has gone. Let's start with a roundup of

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Speaker 2: our top stories. Global equities are plummeting again today as

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Speaker 2: investors continue to fear Trump's tariff salvo could lead to

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Speaker 2: a recession. Hong Kong's benchmark index has seen its biggest

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Speaker 2: intra day drop in more than sixteen years, and the

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Speaker 2: losses on Japan's main index triggered it's circuit breaker. The

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Speaker 2: MASCI specific index is set for its worst drop since

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Speaker 2: the financial crisis. Futures are pointing to heavy losses in

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Speaker 2: Europe and in the United States with drops of more

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Speaker 2: than three percent ahead of the market open. Head of

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Speaker 2: economics at Renaissance Macro Research, Neildutta says markets are sending

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Speaker 2: a clear message.

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Speaker 3: You're getting to a point now where I think the

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Speaker 3: market will take on more of a role of like

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Speaker 3: an active informant, where it begins aggregating macro risk factors

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Speaker 3: and outcomes and it tells you about the future, and

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Speaker 3: then the stock market does kind of take on this

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Speaker 3: macro role, and that's kind of where we are. So

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Speaker 3: if the stock market goes down, that creates a way

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Speaker 3: of tightening financial conditions, exacerbating the uncertainty that's already out there,

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Speaker 3: and you continue to have a negative feedback loop until

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Speaker 3: policy gets investors to shift their attention.

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Speaker 2: L Jetta was speaking as the global right in equities

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Speaker 2: is matched by a surge in the so called fear

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Speaker 2: index the VIX, which is now at levels not seen

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Speaker 2: since the pandemic. After the events of recent days, economists

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Speaker 2: that Goldman's sacks have raised the probability of the US

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Speaker 2: recession from thirty five to forty five percent. They now

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Speaker 2: expect the FED to deliver three consecutive twenty five basis

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Speaker 2: point insurance cuts starting in June, but war in the

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Speaker 2: Central Bank could deliver much deeper cuts in the event

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Speaker 2: of a recession. The analysis underscore is the heightened concerns

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Speaker 2: across markets as Trump attempts to reshape global trade in

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Speaker 2: Washington's favor. Here's Bloomberg opinion columnst. Muhammadalarian.

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Speaker 4: I think the hardest thing for the markets right now

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Speaker 4: is not only to try to evaluate where the destination is,

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Speaker 4: but how bumpy will the journey be. And I'm saying

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Speaker 4: that because we have technicals playing in margin calls are there,

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Speaker 4: people are in fact reducing winners and losers across the

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Speaker 4: board to waste cash. Fund managers are worried about actual

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Speaker 4: and expected outflows.

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Speaker 2: Maminalarians, speaking there as Goldman Sachs economists, said their baseline

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Speaker 2: forecast for some growth still rests on the assumption that

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Speaker 2: US tariffs will be reduced from their current level. Meanwhile,

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Speaker 2: President Trump and his team are doubling down on their

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Speaker 2: tariff plan as he and his economic team dismissed investors'

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Speaker 2: fears of inflation and recession. Speaking on Air Force one yesterday,

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Speaker 2: the US leader struck a determined tone and repeatedly defended

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Speaker 2: the tariff barrage unveiled last week.

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Speaker 5: I don't want anything to go down, but sometimes you

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Speaker 5: have to take meticine to fiction something.

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Speaker 2: In comments that may fuel further market fears, Trump said

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Speaker 2: he wouldn't strike deals to cut the highest tariff rates

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Speaker 2: unless the countries in question eliminate their trade deficits with

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Speaker 2: the US.

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Speaker 5: I spoke to a lot of leaders, European agent from

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Speaker 5: all over the world. They're dying to make a deal,

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Speaker 5: but I said, we're not going to have deficits.

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Speaker 2: With your country. Trump's insistence the trade deficits need to

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Speaker 2: be balanced to gain tariff relief will cause concern in

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Speaker 2: many countries, as on that aim would be entirely separate

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Speaker 2: from eliminating any trade barriers or tariffs they may have

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Speaker 2: on the US. Trump's comments are the latest in a

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Speaker 2: parade of defined signals from the President and his top

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Speaker 2: economic advisors. On Sunday, US Treasury secretaries got Besson struck

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Speaker 2: a defiant tone in the face of sharp declines in

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Speaker 2: global financial markets. Speaking to NBC's Meet the Press, he

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Speaker 2: rejected the idea that they would cause a protracted US contraction.

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Speaker 6: I reject that the assumption there doesn't have to be

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Speaker 6: a recession. Who knows how the market is going to

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Speaker 6: react in a day, in a week. What we are

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Speaker 6: looking at is building the long term economic fundamentals for

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Speaker 6: prosperity that I think the previous administration had put us

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Speaker 6: on the course toward financial calamity.

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Speaker 2: Treasury secretaries got basin. Speaking there to NBC's Meet the Press,

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Speaker 2: Besen said that more than fifty countries had cold the administration,

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Speaker 2: but any talks are going to take time. Prominent investors

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Speaker 2: and traders have also been taking to social media to

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Speaker 2: make their views on the tariffs clear. Bloomberg's Ewan Parts

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Speaker 2: has more.

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Speaker 7: After two trading sessions which saw five trillion dollars wiped

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Speaker 7: off the value of US stocks. America's of S class

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Speaker 7: is coming to terms with its new diminished status in

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Speaker 7: the era of President Trump's trade offensive. Bill Lackman, the

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Speaker 7: founder of Pershing Square and vocal Trump supporter, posted on

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Speaker 7: x that he strongly believes launching tariffs against the entire

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Speaker 7: world is a mistake. Ray Dalio, the founder of Bridgewater,

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Speaker 7: the world's largest hedge fund, warns the tariff package will

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Speaker 7: be significantly stagflationary for the United States. Ackmann went on

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Speaker 7: to say the White I should call time out on

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Speaker 7: the plans. He says, otherwise we're heading for a self

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Speaker 7: induced economic nuclear winter in London, I'm une pots Bloomberg Radio.

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Speaker 2: The UK's Prime Minister Kris Starmer says he'll announced new

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Speaker 2: measures to support businesses in the face of the global

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Speaker 2: trade war we Writing in a newspaper over the weekend,

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Speaker 2: he said the world as we knew it has gone.

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Speaker 2: Treasury Minister Darren Jones says the support package will involve

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Speaker 2: investment in industrial policy and public services.

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Speaker 8: Globalization as we've known it for the last number of

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Speaker 8: decades has come to an end. That's why we need

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Speaker 8: Britain to be strong and resilient, also build out our

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Speaker 8: relationships with our allies and partners around the world. But

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Speaker 8: also why we have to invest in the domestic economy,

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Speaker 8: both the UK businesses but also our public services, so

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Speaker 8: that we have workers and communities who are well skilled

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Speaker 8: able to take advantages of jobs.

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Speaker 2: Jones gave no details, but after he spoke, the UK

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Speaker 2: government announced it would ease its green targets for car makers.

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Speaker 2: Britain is so far said it won't retaliate against Trump's

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Speaker 2: tariffs as it helps it can secure a deal with

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Speaker 2: the United States. Finance ministers from Metally in Spain have

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Speaker 2: warned against reacting too aggressively to Donald Trump's tariffs. Their

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Speaker 2: remarks contrast with a push by France and Germany for

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Speaker 2: a more forceful reaction. Miguel Berger, the German ambassa to

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Speaker 2: the UK, says trade ministers are drawing up a list

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Speaker 2: of potential countermeasures.

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Speaker 9: I think it's the biggest assault we have seen since

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Speaker 9: the end of the Second World.

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Speaker 10: War on global trade.

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Speaker 9: We all will have to find a way to deal

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Speaker 9: with it, and European trade min iss going to meet

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Speaker 9: on Monday and then take a decision on how to react.

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Speaker 2: Germany's ambassards to the UK Mcgilberger. They're speaking ahead of

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Speaker 2: the meeting of EU trade ministers in Luxembourg today. His

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Speaker 2: comments come after the European Central Banks Executive Board member

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Speaker 2: is about Schnabel suggest that the US tariffs may signify

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Speaker 2: that the era of free flowing global commerce is over.

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Speaker 2: And those are your top stories on the markets. The

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Speaker 2: MSCIASA Pacific Index seven point seven percent lower, then Hangsng

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Speaker 2: in Hong Kong, eleven point four percent lower, eurostocks, fifty

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Speaker 2: futures four percent lower, SMP Miani's on Wall Street three

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Speaker 2: point three percent lower. The Brent crew to price bren

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Speaker 2: Crew down by two and a half percent to sixty

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Speaker 2: three dollars and ninety three cents barrel. The ten year

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Speaker 2: treasury yield down seven basis points to three point nine

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Speaker 2: two percent. On currency markets, the Japanese end strengthening six

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Speaker 2: tenths against the dollar. The euro is a touch stronger

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Speaker 2: today at one oh nine to eighty three, the pound

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Speaker 2: at one twenty nine going into Monday's trading session. With

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Speaker 2: continuing full coverage of the market reaction to Donald Trump's

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Speaker 2: tariffs today, we'll get into details of that in a

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Speaker 2: moment and tell you more about how major economic powers

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Speaker 2: are thinking of responding. But if you want to take

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Speaker 2: a step back and perhaps think about how to understand

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Speaker 2: everything that's happening at the moment, I'd recommend Sean Donnan's

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Speaker 2: weekend essay from Bloomberg, looking at the title the Chaos

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Speaker 2: is Not Going to End, and looking at how the

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Speaker 2: effects of life, as he puts it, in what it

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Speaker 2: describes as the perpetual uncertainty machine. So that we've had

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Speaker 2: this blizzard of policy moves. It seems like every day

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Speaker 2: the global policy sands are shifting and they've created a

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Speaker 2: situation which is one exhausting and two has no end

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Speaker 2: in sight. As Shawn points out, if you're managing money today,

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Speaker 2: you're looking at a fracturing global economy where it's hard

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Speaker 2: to find a pattern. If you're building a business, you

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Speaker 2: need to be nimble, and if you're waiting for the

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Speaker 2: uncertainty to end, where he could be waiting for a

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Speaker 2: long time as well. Looking at how economists are trying

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Speaker 2: to deal with this as well. What Seawan Donald's writing

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Speaker 2: about is because the policy itself keeps moving makes it

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Speaker 2: very difficult to try and make predictions, which we're already

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Speaker 2: getting very tricky given the complexity of the global economists,

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Speaker 2: and hats off to our economists here at Bloomberg have

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Speaker 2: been doing their best to give us an assessment of

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Speaker 2: what the economic damage is from these tariffs as well.

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Speaker 2: There is, as Sean Wright's, no longer a sleepy technocratic

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Speaker 2: middle ground or any order to lean into in moments

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Speaker 2: like this, well worth the read. You'll find Sean Donald's

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Speaker 2: essay on Bloomberg Dot com or on the terminal. Well,

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Speaker 2: let's get back to that traumatic sell off on markets,

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Speaker 2: equities and Asia plunging futures pointing to a sharply lower

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Speaker 2: open here in Europe and on Wall Street investors continuing

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Speaker 2: to flee risk assets. Let's get too our market's live stratus,

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Speaker 2: Mary Nicola for the latest. Mary, give us a sense

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Speaker 2: of today's session. Where are we seeing the biggest moves

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Speaker 2: and how do they fit into the cell off we've

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Speaker 2: seen so far.

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Speaker 1: Yeah, it's been a really ugly day in Asia. We've

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Speaker 1: seen MSCI Asia Pacific having its worst day since October

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Speaker 1: two thousand and eight. China equities are really getting hammered

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Speaker 1: this morning, almost catching down to the route that's already

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Speaker 1: had the fallen equity markets. Remember they were closed on Friday,

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Speaker 1: so they're sort of catching down to what we've already seen,

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Speaker 1: but are also reacting to the retaliation that we've seen

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Speaker 1: from China and they've been severely hit by it. And

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Speaker 1: I think sentiment is likely to remain under pressure, especially

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Speaker 1: across Asia, as investors just take go move to the

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Speaker 1: sidelines for now in terms of how and see how

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Speaker 1: this really plays out.

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Speaker 2: The message from Donald Trump that we heard is that

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Speaker 2: we should forget the markets and focus on the potential

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Speaker 2: benefits down the line. That doesn't seem to be a

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Speaker 2: message that investors are listening to, at least for the moment.

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Speaker 8: No, not at all.

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Speaker 1: And the problem is that President Trump seems resolute about

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Speaker 1: his tariff's tariff plans, describing the recent moves more as

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Speaker 1: medicine to fix something. So, but all this is creating

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Speaker 1: is fears of escalation, and these punitive tariffs are raising

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Speaker 1: fears of a global recession and obviously spurring this broad

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Speaker 1: global route. And then, of course what's adding to it,

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Speaker 1: unlike let's say in two thousand and eight or the

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Speaker 1: route in twenty twenty, in twenty twenty, is that there

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Speaker 1: seems very limited support on monetary and fiscal side to

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Speaker 1: stem these declines. So it's making it more difficult for

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Speaker 1: investors to catch this falling knife.

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Speaker 2: Mary, where are they going? I suppose we're seeing the

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Speaker 2: huge moves in bonds as well. I mean, what does

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Speaker 2: that choice from investors tell us about the perception of

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Speaker 2: recession risk.

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Speaker 1: Yeah, it's we've seen a massive deploy into haven asset.

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Speaker 1: So waking up this morning in Asia, the biggest outperformers

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Speaker 1: where the yen and where the Swiss franc. So clearly

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Speaker 1: people are looking for a haven. What we've also seen

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Speaker 1: is Australian bonds we're outperforming at the start of the

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Speaker 1: morning and that's likely to continue because at the end

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Speaker 1: of the day, no one is looking to deploy cash

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Speaker 1: with deploy assets into into risk assets, especially with all

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Speaker 1: this uncertainty. So what you're likely to see is more

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Speaker 1: support for the bond markets and more support for havens

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Speaker 1: across the board.

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Speaker 2: Mary talk us through some of the policy action that

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Speaker 2: we're seeing as well, because there's some talk in the

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Speaker 2: markets that China could be moving to d valley the yuan.

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Speaker 2: They've also then some policy moves today.

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Speaker 1: Yeah, it's interesting to see the rising speculation of a

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Speaker 1: sharp devaluation on the Chinese yuan because what we've seen

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Speaker 1: in terms of how they've played the fixing is that

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Speaker 1: it's been stay and we've seen that the currency has

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Speaker 1: been slowly weakened, but a lot of that has already

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Speaker 1: been warranted by domestic conditions, whether it's weak domestic demand

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Speaker 1: or deflation. And I think a sharp devaluation risks further

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Speaker 1: escalation and trade tensions with the US, and of course

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Speaker 1: further instability, especially when you have capital flight out of China,

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Speaker 1: so that any sharp devaluation seems unlikely at this point,

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Speaker 1: especially given the volatility in the market. And the key

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Speaker 1: thing is too, is to also look at how the

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Speaker 1: you want has been trading against its trading partners, and

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Speaker 1: since the start of the year it's actually been depreciating,

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Speaker 1: so it does offer some level of support for exports,

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Speaker 1: but obviously doesn't cushion the blow given how punitive the

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Speaker 1: tariffs are on China. So I think for now we're

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Speaker 1: going to see a lot more stability in the.

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Speaker 2: C and y Mary talk us through the indications that

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Speaker 2: we have for the session ahead in Europe and in

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Speaker 2: the US. What are the volatility indexes and other signs

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Speaker 2: telling us about what to expect.

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Speaker 1: Yeah, I think you pointed this also out earlier, is

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Speaker 1: that we're seeing that the VIX is now back up

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Speaker 1: to levels since the global pandemic, and of course when

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Speaker 1: you have those levels is just going to create and

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Speaker 1: ensue this negative sentiment that has already gripped the market.

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Speaker 1: So it's unlikely to see any sort of signs of reprieve,

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Speaker 1: barring any sort of you know, big announcement from the

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Speaker 1: Trump administration, but for now it looks like tariffs are

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Speaker 1: going to remain the key driver and concerns about a

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Speaker 1: global recession and the impact of these punitive tariffs are

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Speaker 1: going to remain in the driver's seat. So I think

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Speaker 1: in that sense we're going to see, as we're seeing

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Speaker 1: now just how European equity futures are lower, and that's

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Speaker 1: likely to persist.

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Speaker 2: Okay, Mary Nicole, our Market's Live strategists, Thank you very much,

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Speaker 2: thank you your opin union. Trade ministers are meeting today

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Speaker 2: to discuss their response to Trump's tariff moves, which we'll

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Speaker 2: see a twenty percent blanket levy applied to EU goods

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Speaker 2: from Wednesday. Our Porte Jorge Valero is in Luxembourg for that, Messiah,

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Speaker 2: good morning, thank you for joining us. What options will

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Speaker 2: ministers there be discussing today.

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Speaker 5: Well, first of all, what the ministers need to do

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Speaker 5: is to forge unified messages as the negotiations starts with Washington.

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Speaker 10: There was a first call on Friday.

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Speaker 5: Between Seph Covich and his American quarter parts, and as

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Speaker 5: sef Covich set up after that call, the trade relationship

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Speaker 5: with the US NISSA fresh approach. And as you said,

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Speaker 5: one thing that they need to focus and to narrow

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Speaker 5: the differences is what countermeasures they could agree upon to retaliate.

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Speaker 5: But we are not there yet. First the ministers want

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Speaker 5: to focus on the negotiations and here what they need

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Speaker 5: to agree on, what concessions they are ready to give

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Speaker 5: to the Americans to get rid of of these studies

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Speaker 5: or our at least to reduce the tariff rate.

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Speaker 2: Do we have any idea of what that could look

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Speaker 2: like when we talk about the concession.

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Speaker 5: The issues that are especially targeted but the US administration

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Speaker 5: by the Trund team is both of the tariff rates

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Speaker 5: that they see on the European side. I mean, we

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Speaker 5: heard many times that the car tips between the EU

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Speaker 5: and the US.

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Speaker 10: There's a big difference.

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Speaker 5: They said that the Americans imposed are two point five

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Speaker 5: percent while the Europeans were ten percent. But what is

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Speaker 5: especially irking for Washington is what they called or what

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Speaker 5: is called the non tariff barriers. And they have mentioned

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Speaker 5: many times. They agree food regulations, they have mentioned the

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Speaker 5: European tech regulations. They even mentioned the vi T, the

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Speaker 5: European value added tax, which of course the Europeans insist

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Speaker 5: that this is a non discriminatory tax both for the

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Speaker 5: European makers and for American companies. So it's remains it

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Speaker 5: remains to be seen whether the Europeans, besides.

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Speaker 10: The trade part, they are willing to give.

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Speaker 5: Concessions on those non regular or non tariff regulations, which

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Speaker 5: I think really it's more complicated, especially for example, when

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Speaker 5: it comes to the tech part or to the vi

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Speaker 5: t Of course.

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Speaker 2: This question of unity that you've raised, for how much

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Speaker 2: divergence is they're among EU members about how they should respond.

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Speaker 2: We've talked about how some countries are pushing for something

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Speaker 2: more forceful whereas others are more recessance.

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Speaker 10: Exactly.

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Speaker 5: So, Moles, what you hear from sources is that there

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Speaker 5: is a sort of agreement on the overall strategy that

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Speaker 5: we need to first to negotiate, but then to stand

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Speaker 5: ready to hit back if the talks disrail, but also

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Speaker 5: for example, to strengthen our hand at the negotiating table.

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Speaker 5: But then, of course the devil is on the details.

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Speaker 5: And as you see, as you said, there are countries

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Speaker 5: that are more let's say, willing to speak about this

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Speaker 5: firm and robust response.

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Speaker 10: For example, we heard the remarks from France.

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Speaker 5: We heard remarks also from the from Habek, the German

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Speaker 5: Trade minister, while others are more conciliatory and emphasizing they

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Speaker 5: need to focus on the negotiations to de escalate.

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Speaker 10: For example, this is the case of Italy.

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Speaker 5: So it really remains to be seen how far the

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Speaker 5: Europeans are willing to go with these counter mersial There

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Speaker 5: is this so called BASUCA in the Trade arsenal of

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Speaker 5: the EU, the Antiquestion Instrument, which offers a broad set

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Speaker 5: of possibilities for the Europeans to retaliate, targeting not only

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Speaker 5: let's say goods and services, but also what we were

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Speaker 5: talking about, services of the American side, which is of

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Speaker 5: course for the Europeans really the easier target because that's

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Speaker 5: where the Americans have a trade surplus with the Europeans.

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Speaker 5: On the service side, of course, here the target will

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Speaker 5: be financial services tech services, and here the options will include,

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Speaker 5: for example, restricting the access to the European procurement market

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Speaker 5: or some other regulatory approaches when it comes to take

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Speaker 5: financial services.

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