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Speaker 1: Good morning. It's Wednesday, the fifteenth of November here in London.

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Speaker 1: This is the Bloomberg DAYBREQ podcast. I'm Caroline Hepkit and.

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Speaker 2: I'm Stephen Carroll. Coming up today, Israeli troops raid Gaza's

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Speaker 2: main hospital. We have the latest on the operation and

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Speaker 2: its possible repercussions.

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Speaker 1: Ken Griffin and Jamie Darman warn the fight against high

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Speaker 1: inflation is not over.

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Speaker 2: And the former Home Secretary Sowell A. Bravman accuses Rishi

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Speaker 2: Sunak of broken vows and betrayal.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: Israeli forces have entered Gaza's biggest hospital in what Israel's

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Speaker 2: army has called a quote precise and targeted operation against Hamas.

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Speaker 2: A spokesperson for the Hamas run health ministry in Gaza

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Speaker 2: has told Al Jazeira that Israeli troops are currently searching

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Speaker 2: through the basement of the Al Shifa Hospital. The military

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Speaker 2: operation comes after the United States that it has intelligence

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Speaker 2: confirming Israel's assertion that militant groups are using the medical

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Speaker 2: facilities to conceal and support their operations. John Kirby is

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Speaker 2: the spokesman for the US National Security Council.

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Speaker 3: Amas and the Palestinian Islamic Jihaddij members operate a commander

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Speaker 3: control node from Al Shifa in Gaza City. They have

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Speaker 3: stored weapons there and they're prepared to respond to an

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Speaker 3: Israeli military operation against that facility.

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Speaker 2: Kirby's comments come as the Pentagon quietly stepped up military

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Speaker 2: aid to Israel, delivering on requests that include more laser

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Speaker 2: guided missiles, shells, and bunker busting munitions.

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Speaker 1: Now, despite additional military aid, sources have told Bloomberg that

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Speaker 1: the Biden administration is increasingly frustrated with Israel's conduct in Gaza.

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Speaker 1: Officials are said to be having more difficult conversations with

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Speaker 1: their Israeli counterparts, only to have their views ignored. On Monday,

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Speaker 1: President Biden said that Gaza's largest hospital must be protected.

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Speaker 1: Here are the key points of what he said.

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Speaker 4: You know, I have not been very luckant, and especially

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Speaker 4: my concern's going on and my hope and expectation that

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Speaker 4: there will be less intrusive action relative hospital. The hospital

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Speaker 4: must be.

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Speaker 1: Protected, Joe Biden speaking there. Al Shifa Hospital has now

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Speaker 1: been without power and water four days. Munir al bush

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Speaker 1: Is from the hamas Ran Health Ministry, speaking before today's

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Speaker 1: military operation. He said that newborn babies are being moved

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Speaker 1: to improve their chances to other news.

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Speaker 2: Some of the biggest names in finance are warning markets

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Speaker 2: are getting overly eager after some of the largest falls

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Speaker 2: and yields this year. Traders are batting the Fed's hiking

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Speaker 2: cycle is over following yesterday's cool inflation print in the

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Speaker 2: United States, but Citadel founder Ken Griffin says wagers on

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Speaker 2: rate cuts happening in twenty twenty four are a step

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Speaker 2: too far.

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Speaker 5: The Fed needs to stay on message that they're going

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Speaker 5: to put the inflation genie back in the bottle, and

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Speaker 5: so if they cut too soon, I think they risk

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Speaker 5: losing credibility around their commitment to a two percent inflation target.

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Speaker 2: Ken Griffin's caution was echoed by JP Morgan's Jamie Diamond,

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Speaker 2: who added that more hikes are still very much on

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Speaker 2: the table.

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Speaker 6: I think they do. They're doing the right thing to

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Speaker 6: pause for now. You know they've raised rates a lot.

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Speaker 6: You know, to wait to see the effect on the

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Speaker 6: economy in the US, particularly as the fiscal spending, the

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Speaker 6: excess fiscal spending is winding down and quantit tight and

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Speaker 6: tiny is kicking in but I still think, you know,

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Speaker 6: you should prepare. They might have to do a little

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Speaker 6: bit more, and I think people should be prepared for

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Speaker 6: that just as a kind of a risk management tool.

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Speaker 6: And I'm afraid inflation may not go away that quickly.

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Speaker 2: The boss of America's largest bank has said previously he's

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Speaker 2: advising clients to be prepared for interest rates as high

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Speaker 2: as seven percent. That puts him on a collision course

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Speaker 2: with the market consensus, which these rates at four point

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Speaker 2: two percent by the end of next year.

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Speaker 1: Now, President Shijingping has landed in the United States to

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Speaker 1: meet Joe Biden. It's the first visit by China's premiere

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Speaker 1: in six years, as both leaders try to repair a

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Speaker 1: strained relationship. Ji is also set to be the guest

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Speaker 1: of honor at a dinner with top US business executives

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Speaker 1: as the Asian superpow tries to rekindle foreign investment.

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Speaker 2: And here in the UK, the former Home Secretary so

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Speaker 2: While a bravman, has accused the Prime Minister of betrayal

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Speaker 2: and broken promises and a stunning retaliation. In a letter

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Speaker 2: to Rishie Sunak, the fired Home Secretary refers to a

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Speaker 2: deal she says they made last year that included commitments

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Speaker 2: by Sunak to reduce legal migration, promises she says he

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Speaker 2: broke in a betrayal of the Conservative's twenty nineteen manifesto.

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Speaker 2: Henry Hill's the deputy editor of Conservative Home. He says

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Speaker 2: the level of scorn in the letter is odd.

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Speaker 7: I think the baffling thing about this letter, given its

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Speaker 7: tone and content, is why it isn't a resignation letter.

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Speaker 7: If she had walked out of government of her own volition,

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Speaker 7: it would make perfect sense for her to write a

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Speaker 7: letter like this, but she didn't. She waited until she

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Speaker 7: was dismissed, so it makes it slightly strange.

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Speaker 2: Bravman's departure from government comes ahead of a key legal

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Speaker 2: challenge to the government's plans to deport asylum seekers to Ruanda,

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Speaker 2: a flagship Emmigrat immigration policy backed by both Braverman and Sunak.

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Speaker 2: Richie Sinak, spokesperson in response as the Prime Minister is

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Speaker 2: proud that government has quote brought forward the toughest legislation

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Speaker 2: to tackle illegal migration this country has seen. Now in

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Speaker 2: a moment, we'll have more on the market reaction to

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Speaker 2: yesterday's cooler than expected inflation numbers from the United States.

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Speaker 2: But let's turn first to events in the Middle East

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Speaker 2: and Israel sending troops into that major hospital in Gaza

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Speaker 2: that it accuses Hamas of using as a command center.

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Speaker 2: This as Bloomberg has been reporting that officials in the

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Speaker 2: Biden administration are becoming increasingly frustrated with the civilian death

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Speaker 2: toll in the war between Israel and Hamas, of course,

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Speaker 2: now lasting more than a month since that October seventh

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Speaker 2: attack by Hamas on Israel in which more than fourteen

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Speaker 2: hundred people died. The Hamas run health ministry in Gaza,

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Speaker 2: of course, says that more than eleven thousand people have

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Speaker 2: died in Gaza since this offensive began.

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Speaker 1: I Meanwhile, the Nations that has been talking about Al

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Speaker 1: Shifa Hospital saying that forty patients have died there before

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Speaker 1: this fighting and this move by the Israeli military, and

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Speaker 1: that there are concerns about hundreds of patients and medical

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Speaker 1: personnel displaced civilians being at the hospital. The Israeli defense

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Speaker 1: forces and the Israeli military accusing, how massive, using the

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Speaker 1: hospital as a base for their operations.

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Speaker 2: That's bringing Boomberg's managing editor for Government and the Colmoming

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Speaker 2: News in the Middle East. Silvia Westle for more Sylvia,

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Speaker 2: Good morning to you. What do we know about what's

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Speaker 2: happening in the Shifa hospital in Gaza this morning?

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Speaker 8: Well, it looks like communications in that area have been cut,

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Speaker 8: so for a few hours it's been very difficult to

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Speaker 8: understand what's been happening on the ground. And what we

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Speaker 8: do know is that the Israeli military has said that

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Speaker 8: it asked people to evacuate the area, and that a

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Speaker 8: few hours after midnight Israeli troops entered the compound. The

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Speaker 8: last we heard from somebody on the ground was that

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Speaker 8: tanks were on the outskirts, and since then there's not

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Speaker 8: really been many updates about what is going on there.

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Speaker 8: I mean, the UN has said that there is only

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Speaker 8: one hospital that's actually functioning normally in northern Gaza. Shiff

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Speaker 8: actually wasn't one of them and was sort of on

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Speaker 8: emergency measures. So that's kind of what we know at

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Speaker 8: the moment.

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Speaker 1: Israel accuses her Mass of hiding weapons in the hospital,

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Speaker 1: and they have called this operation against her Mass precise targeted.

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Speaker 1: There is a big question though about Israel sending in

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Speaker 1: troops to a hospital which is sheltering thousands of people.

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Speaker 8: Sure, So essentially, Israel has asked civilians to move out

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Speaker 8: of northern Gaza in the weeks that it's been doing

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Speaker 8: its military operations for many reasons. People there and International

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Speaker 8: Aid Agency has said that this is really difficult for

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Speaker 8: some people to do, children, the elderly people who are

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Speaker 8: needing medical treatments. So we've seen overnight Benjamin Nettina, who

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Speaker 8: and Justin Trudeau, the Canadian Prime Minister, traded you know,

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Speaker 8: words over Schiffer. Trudeau lamented the human tragedy that is

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Speaker 8: unfolding in Gaza's heart wrenching, especially the suffering we see

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Speaker 8: in and around Schiffer Hospital, and Messignor who you know,

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Speaker 8: said that it's not Israel that's targeting civilians but har

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Speaker 8: mass So, you know, it's it's definitely a very sensitive topic,

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Speaker 8: and there's been a whole debate internationally about hospitals. I think,

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Speaker 8: you know, what we can say is that the UN,

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Speaker 8: just before the troops entered, said that hospitals and medical

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Speaker 8: personnel are specifically protected under international humanitarian law and all

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Speaker 8: parties of the conflict must ensure their protection, and it's

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Speaker 8: warned against the evacuation of people from hospitals saying it

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Speaker 8: was impossible for people there. So I think, you know,

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Speaker 8: it's definitely a topic of international debate right now, and

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Speaker 8: that's set to continue into.

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Speaker 2: Today this as Bloomberg has been reporting about frustration within

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Speaker 2: the Biden administration with Israel's conduct of the war against

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Speaker 2: Hamas as the civilian death toll rises as well, what

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Speaker 2: more can you tell us about those concerns.

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Speaker 8: We've spoken to people familiar with those conversations, and they've

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Speaker 8: said that the White House is getting increasingly frustrated with

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Speaker 8: Israel's conduct of the war and that the administration's calls

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Speaker 8: to limit the amounts of civilian casualties are going unheeded

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Speaker 8: and that's widening a rift behind closed doors between the

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Speaker 8: US and Israel, and that you know, they've ramped up

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Speaker 8: its messaging to Israel as patients has grown. You know,

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Speaker 8: the US does say that Israel's assertions about Hamas using

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Speaker 8: these facilities as bases are valid, but it is very

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Speaker 8: concerned about civilian casualties during this conflict we're seeing as well.

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Speaker 8: You know, there's what the US is in public and

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Speaker 8: what it's saying in private as well, and you know,

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Speaker 8: it's a real risk for the Biden administration strategy. And

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Speaker 8: it's also you know that the US is concerned about

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Speaker 8: regional reaction to this because the future of Gaza and

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Speaker 8: the stability the Middle East and whether this spills over it.

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Speaker 8: That's also I think it's very closely watched by everybody

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Speaker 8: right now.

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Speaker 1: Okay, Sylvia, thank you so much for being with us

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Speaker 1: this morning. That is Bloomberg, Sylvia west All. They're just

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Speaker 1: joining us on the latest on what is happening in Gaza.

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Speaker 2: We're going to turn two other matters now, and the

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Speaker 2: US CPI figures which showed core prices increasing by zero

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Speaker 2: point two percent in October, which is less than forecasters

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Speaker 2: had been expecting. Markets now have cut the odds of

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Speaker 2: another rate hike to almost zero and see a fifty

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Speaker 2: basis point rate cut by July. Joining us now from

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Speaker 2: more Bloomberg's executive editor for Asia Markets, Poul Dubs and Paul,

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Speaker 2: great to have you with us on the program. Is

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Speaker 2: this a fundamental shifting point for markets seeing the FED

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Speaker 2: hiking cycle as being over it?

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Speaker 9: Cuddainly seems their way, Stephen, and good morning to you.

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Speaker 9: But we've been here before and we've cerdainly seen you know,

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Speaker 9: headfakes several times with people believing that, you know, that's

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Speaker 9: the end of the FED rate hiking cycle, only for

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Speaker 9: the the market to turn more hawkish in his perception

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Speaker 9: of what the Fed's going to do again and starts

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Speaker 9: a price in hikes. So I think it becomes difficult

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Speaker 9: to declare the all clear yet based on the market reaction,

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Speaker 9: which we saw was just pretty unanimous in terms of

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Speaker 9: bonds and currency in stock market moves, the market is

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Speaker 9: certainly pricing in a much lower possibility of the Fed

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Speaker 9: moving any further in terms of raising interest rates and

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Speaker 9: getting more confident of cuts into the middle of next year.

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Speaker 8: Yeah.

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Speaker 1: Absolutely, the US solo feil by the most in a year,

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Speaker 1: and stock turned the world rallied. But then it's quite

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Speaker 1: interesting also in your part of the world to look

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Speaker 1: at the end which hit a fifteen year low against

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Speaker 1: the euro and the Swiss franc I mean, okay, perhaps

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Speaker 1: the pressure is off a little bit against the dollar,

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Speaker 1: and yet the en is under such pressure like few

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Speaker 1: others around the world.

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Speaker 9: Yeah. Absolutely, And the key to that is the interest

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Speaker 9: rate differential. The Bank of Japan continues to hold in

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Speaker 9: test rates there are extremely low. Yes, it's been allowing

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Speaker 9: our tenure yields to rise steadily. It now has a

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Speaker 9: lid on that at you know, one percent and then

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Speaker 9: some but it still has the two year rates anchored

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Speaker 9: around their zero level. And so everywhere else around the

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Speaker 9: world where there are higher interest rates looks like a

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Speaker 9: better place to park your cash than Japan right now.

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Speaker 9: And so hence, even when it moves away from from

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Speaker 9: the well one fifty one to ninety five leveled against

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Speaker 9: the dollar, which was last year's sort of weakest point

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Speaker 9: and a thirty three year low, even though it's had

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Speaker 9: a little bit of a lead up there, it remains

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Speaker 9: under pressure against the rest of the markets, with the

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Speaker 9: where the rallies against the dollar were greater the euro.

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Speaker 9: I think it was one point five percent up against

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Speaker 9: the dollar, so a really big ping back there in

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Speaker 9: yesterday's trading, Paul.

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Speaker 2: Then closer to US and further away from you UK

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Speaker 2: inflation print out today as well as there's also going

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Speaker 2: to see a question of rates, you know, of reprising

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Speaker 2: of rates for the Bank of England.

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Speaker 9: Well, the market is going to be closely watching for that.

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Speaker 9: I think that the takeaway from the labor data was

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Speaker 9: a bit of a earlier in the week when that

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Speaker 9: came in strong and the wage growth fluked looked impressive still,

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Speaker 9: so you know, there's a number of factors that differentiate

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Speaker 9: the UK from the US, and so the readA cross

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Speaker 9: isn't definitely going to be there, I think, you know,

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Speaker 9: so there'll be plenty of attention and scrutiny on that. Nonetheless,

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Speaker 9: the guilt market may react just as much to what

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Speaker 9: we saw in the Treasury's market as it does to

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Speaker 9: the UK information that we get here.

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