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

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Speaker 1: This is the BlueBag Daybreak you at podcast. I'm Caroline Hepka.

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Speaker 2: And I'm Stephen Carroll. Coming up today, Gaza's border crossing

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Speaker 2: opens for the first time since the war started, with

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Speaker 2: hundreds of foreign nationals allowed to leave.

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Speaker 1: In other news, applause for a pause, market's cheer as

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Speaker 1: the Federal Reserve leaves its benchmark interest rate unchanged.

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Speaker 2: Plus our exclusive interview with the CEO of Barkley's cs

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Speaker 2: ven Kata Krishnan tells us job cuts are coming, but

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Speaker 2: the bank's Asian operations will be largely spared.

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

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Speaker 2: The US President Obiden says Israel and Hamas militant sought

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Speaker 2: to pause fighting as foreign passport holders start to exit

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Speaker 2: the Gaza Strip. A further six hundred foreigners are expected

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Speaker 2: to leave via the Rafa border crossing into Egypt today,

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Speaker 2: but despite protesters interrupting his comments at a speech in Minnesota,

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Speaker 2: the US President stopped short of supporting a full cease fire.

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Speaker 3: The United States continue to drive humanitarian support prenocent people

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Speaker 3: on Gaza who need help, and they do need help.

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Speaker 3: We're going to continue to affirm the digital has the

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Speaker 3: right to responsibility to defended citizens from terror, and it

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Speaker 3: needs to do so on a manner those consistent international

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Speaker 3: and humanitarian law.

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Speaker 2: Biden also held the international efforts to open the Raffa

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Speaker 2: border crossing. The Katar mediated deal allowed the departures, including

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Speaker 2: of American, French, and British citizens, which required agreements from Hamas,

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Speaker 2: Egypt and Israel.

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Speaker 1: Now, in other news, the Federal Reserve has left its

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Speaker 1: benchmark interest rate unchanged. Its decision to keep its base

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Speaker 1: rate at five and a quarter to five and a

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Speaker 1: half percent was unanimous. Chaired Your Own Power hinted that

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Speaker 1: the central Bank may now be finished with the most

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Speaker 1: aggressive tightening cycle in four decades.

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Speaker 4: We're going meeting by meeting, we're asking ourselves whether we've

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Speaker 4: achieved a stance of policy that is sufficiently restrictive to

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Speaker 4: bring inflation down to two percent over time. That's the

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Speaker 4: caution we're usk and we're looking at the full range

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Speaker 4: of economic data, including financial conditions and all of those

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Speaker 4: things that we look at, and then we're you know,

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Speaker 4: we've come very far with this rate hiking cycle, very far.

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Speaker 1: Powell's dubbish pivot chared markets, with the S and P

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Speaker 1: five hundred index closing more than one percent higher on

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Speaker 1: the day. The target range of five and a quarter

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Speaker 1: percent to five and a half percent is the highest

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Speaker 1: interest rate since two thousand and one.

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Speaker 5: I mean.

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Speaker 2: While the Bank of England is expected to keep interest

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Speaker 2: rates unchanged for a second consecutive meeting later on today,

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Speaker 2: traders will be looking for any hint of future monetary

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Speaker 2: policy easing when the bank updates its forecasts. Governor Andrew

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Speaker 2: Bailey has so far pushed back against any speculation around

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Speaker 2: rate cuts, saying the discussion is premature while inflation remains

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Speaker 2: well above the BOEES two percent target. Bloomberg Economics says

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Speaker 2: today's decision may not be unanimous, but that the Monetary

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Speaker 2: Policy Committee will probably warrant tightening will recommence if inflation

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Speaker 2: risks persist.

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Speaker 1: Barclay's CEO cs Ven Krishnan says that planned job cuts

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Speaker 1: will largely avoid its Asia division. The UK retail banking

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Speaker 1: giant had a disappointing third quarter where it failed to

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Speaker 1: match US peers. The boss of the London based lender

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Speaker 1: says that layoffs, though are coming.

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Speaker 6: It is a reduction in workforce. Generally speaking, in Asia,

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Speaker 6: we of course have very booming economies and we also

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Speaker 6: have a very growing business, so proportionately, it's far less

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Speaker 6: likely to impact this region.

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Speaker 1: Ben Kata Krishnan telling Bloomberg about his strategic review in

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Speaker 1: an exclusive interview. There is not only Barclays, though, feeding

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Speaker 1: the pinch. Financial services job postings in the square mile

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Speaker 1: dropped by almost a third in the quarter to the

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Speaker 1: end of September compared to twenty twenty two.

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Speaker 2: The former CEO of Crypto Exchange FTX, Sam Bankman Freed's

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Speaker 2: fraud trial is nearing a verdict. Bloomberg Sinnale Basic says

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Speaker 2: prosecutors used Bangmin Freed's own words against him and their

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Speaker 2: closing arguments to the jury.

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Speaker 7: So what they are now saying is you saw him

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Speaker 7: come in early to his own defense, very clear worded,

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Speaker 7: very clear headed, and a day later you saw him

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Speaker 7: walk into the prosecution stumbling over many definitions, stumbling over

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Speaker 7: many things that the prosecution put right in front of him,

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Speaker 7: books articles as to what he had said, and then

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Speaker 7: watching him either not remember or deny what has been

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Speaker 7: written or said about him.

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Speaker 2: Blagman. Freed's defense team has insisted the FTX co founder

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Speaker 2: has made mistakes but did not commit crimes. They argue

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Speaker 2: he's been unfairly cast as a villain and a monster.

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Speaker 2: The jury is looking to begin deliberations in the trial

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Speaker 2: later today.

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Speaker 1: Transport services across the UK, France and the Netherlands are

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Speaker 1: facing disruption due to high winds and heavy rain from

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Speaker 1: Storm Kirn. The severe weather warnings are in place for

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Speaker 1: much of southern England and Wales, with the Red alert

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Speaker 1: for the Channel Islands. Andrew As is an operations manager

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Speaker 1: at the UK's Environment Agency.

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Speaker 8: We know this is going to bring us exceptional weather.

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Speaker 8: We've already got six flood warnings out around Devon Cornwall

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Speaker 8: coast and we know that we are looking at probably

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Speaker 8: two weeks of rain in twenty four hours.

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Speaker 1: That heavy rain that As is referring to has prompted

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Speaker 1: rail companies including GWR, A Southwestern Railway and Southeastern to

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Speaker 1: urge people not to travel.

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Speaker 2: Let's turn back to events in the Middle East. The

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Speaker 2: US President has called for a pause in fighting between

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Speaker 2: Israel and Hamas in order to free hostages from the

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Speaker 2: Gaza strip as. Israel's campaign against Hamas has resulted with

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Speaker 2: thousands of debts in Gaza. President Biden is coming under

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Speaker 2: growing pressure and criticism. Joining US now with the latest

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Speaker 2: is Paul Wallace, who leads our coverage of economics and

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Speaker 2: government in the Middle East.

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Speaker 9: Paul, great to have you with us.

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Speaker 2: Is the US president having influence over Israel on this matter?

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Speaker 2: What could a pause in fighting represent rather than necessarily

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Speaker 2: a cease?

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Speaker 10: It does seem like the US is having influence with

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Speaker 10: its private discussions with Israel. So in public it is

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Speaker 10: very much embracing Israel's strategy and giving its space to

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Speaker 10: carry out its plan to destroy Hamas as it describes it.

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Speaker 10: But in private it is calling for restraint. It is

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Speaker 10: emphasizing again and again to Israel the need to protect

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Speaker 10: civilians is as much as possible. It seems like the

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Speaker 10: US managed to get Israel to delay the ground offensive

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Speaker 10: on Gaza for quite a bit of time, probably ten

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Speaker 10: days or more, chiefly to try and get hostage negotiations

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Speaker 10: to progress. What Biden said last night was very interesting.

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Speaker 10: He's obviously not the first person to call for a

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Speaker 10: pause what a lot of people are saying should be

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Speaker 10: a humanitarian pause in fighting, but the fact he's said

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Speaker 10: that suggests that there is a good chance that Israel

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Speaker 10: will be forced into that position. Israel has very much

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Speaker 10: ruled out a ceasefire, and that's a pretty negative word

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Speaker 10: in Israel right now. But it is possible that it

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Speaker 10: agrees to some kind of pause which is likely to

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Speaker 10: be short term, may only last for a few hours,

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Speaker 10: but something that's designed to allow more aid into Gaza

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Speaker 10: and allow more people out of the enclothes.

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Speaker 1: Yeah. What is the situation currently in Gaza? The World

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Speaker 1: Health Organization says that there have been three attacks affecting

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Speaker 1: health facilities in twenty four hours. The situation on the ground,

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Speaker 1: as you understand it.

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Speaker 10: Paul, the situation is still dire, and if anything, it's

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Speaker 10: getting worse a little bit. More aid has been going

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Speaker 10: into Gaza through the boarder crossing with Egypt in the

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Speaker 10: last few days. It's hard to get precise numbers, but

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Speaker 10: we think it somewhere between fifty and one hundred trucks

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Speaker 10: a day, and these trucks of carrying things like medicine

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Speaker 10: and food. But that's still way down from before the war.

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Speaker 10: Garza was getting about five hundred trucks a day of

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Speaker 10: food and medicinal supplies and other things. There's still no

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Speaker 10: fuel going into the territory, which is a big, big problem,

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Speaker 10: and that's something that Israel is very reluctant to allow

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Speaker 10: because it believes that fuel will go into get into

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Speaker 10: the hands of Hamas and it will be used for

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Speaker 10: Hamasa's military operations. Obviously, we had some quite a few,

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Speaker 10: well some foreigners leave yesterday. Again, it's hard to know

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Speaker 10: the precise number, but it seemed like it was a

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Speaker 10: few hundred, three hundred, four hundred, maybe five hundred people leave.

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Speaker 10: All of them seem to have been foreigners, although there

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Speaker 10: were some injured Palestinians as well, and more expected to

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Speaker 10: leave today, and we think that quite a few Americans

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Speaker 10: will be allowed to leave today as well. So at

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Speaker 10: least for foreigners at least, the situation is looking better

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Speaker 10: in the sense they do look like they now have

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Speaker 10: an exit route through Egypt.

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Speaker 2: Meanwhile, Paul, there's been more exchange of fire on Israel's

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Speaker 2: borders with Lebanon and Syria. How much concern is there

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Speaker 2: now about the over spell and how this conflict could

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Speaker 2: spread across the region.

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Speaker 10: That's still a big, big concern for Israel, for the US, frankly,

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Speaker 10: for the whole region. That this war properly spills over

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Speaker 10: onto Israel's northern borders with Lebanon and perhaps Syria. Since

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Speaker 10: Israel went into Gaza with ground troops, the situation on

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Speaker 10: the northern border with Lebanon hasn't really picked up that much.

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Speaker 10: We're seeing sort of daily skirmishes between the Israeli defense

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Speaker 10: forces and hazewell Our militants, but it seems to be

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Speaker 10: contained at the moment. We are watching for a speech

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Speaker 10: on tomorrow by Hafan Masala, who's the head of Heswela,

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Speaker 10: so he is doing something. He is speaking tomorrow that's

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Speaker 10: fairly rare for him. It will be the first time

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Speaker 10: he's spoken since the Israel hamaswar began on October seventh,

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Speaker 10: so people are going to watch that very closely. There's

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Speaker 10: no indication yet that he's going to call for Heswela

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Speaker 10: to start a war with Israel or anything like that,

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Speaker 10: but it is possible that he ups the anti and

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Speaker 10: indicates that Heswela is going to step up at operations

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Speaker 10: against Israel, which would be a big, big development. So

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Speaker 10: we'll be watching that pretty closely tomorrow.

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Speaker 1: Okay, Paul, thank you so much for your reporting and

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Speaker 1: your insights. Paul Wallace there, who leads our coverage of

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Speaker 1: economics and government in the Middle East.

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Speaker 2: Now, should we hike more of the words of fair

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Speaker 2: charge your own power? Hinting at peak rates on when

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Speaker 2: stay after the Central Bank's decision to pause. Powell no

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Speaker 2: also notes that the financial conditions have tightened significantly in

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Speaker 2: recent months. The dubbish pivot that cheered markets joining us

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Speaker 2: Snyder's discuss is Beenberg televis Nanker critic Coup to Critty,

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Speaker 2: good morning to you. How much did your own pal

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Speaker 2: leave the door open then for a future rate ax

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Speaker 2: something we've been watching for it very closely.

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Speaker 5: Well, it depends on who you ask. If you ask

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Speaker 5: anyone in the markets, no room at all. They think

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Speaker 5: it's a complete u turn. But if you were to

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Speaker 5: ask Chairman Powell, I'm sure he would say, look, the

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Speaker 5: door is still open to rate hikes. In fact, he

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Speaker 5: said no real thoughts have been made around the December meeting.

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Speaker 5: It wasn't even discussed. It was only about what was

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Speaker 5: happening in the here and now. But again the markets

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Speaker 5: really interpret that interpreted it as this idea that because

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Speaker 5: he didn't double down on the hawkishness, therefore it's a

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Speaker 5: dubbish pivot. And this is of course the market's getting

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Speaker 5: ahead of itself a little bit. But you can already

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Speaker 5: see it in some of the bets where if you

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Speaker 5: look at what the December bets actually are, they've completely

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Speaker 5: paired back, suggesting that maybe the Fed might hold for

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Speaker 5: a third strenth.

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Speaker 1: Does the US really they managed this no recession soft

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Speaker 1: landing outcome?

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Speaker 10: They might.

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Speaker 5: It kind of looks like it's working out for them.

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Speaker 5: I think to even the Federal Reserve surprise that the

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Speaker 5: US economy is able to navigate it, because look, they

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Speaker 5: had recession forecasts going in to the fall of last year,

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Speaker 5: and that was something that the markets had priced in

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Speaker 5: as well. So this resilience, this in the housing market,

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Speaker 5: in the jobs market is kind of a surprise to everybody.

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Speaker 5: But I think what's important is what Charon Powell actually

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Speaker 5: said about the recession call, which he's saying, we think

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Speaker 5: we can actually navigate it now. To be fair, he

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Speaker 5: is paid to say that. He is paid to say that, look,

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Speaker 5: we can navigate it very well, as is the Treasury.

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Speaker 5: I think the bigger kind of takeaway that he did

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Speaker 5: issue concern about was we don't actually know how the

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Speaker 5: geopolitics are going to shake out. He did mention that

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Speaker 5: he mentioned the UAW strikes. He mentioned the oil prices

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Speaker 5: as well. He said that even though you are seeing resilience,

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Speaker 5: things can deteriorate very quickly because the risks are still

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Speaker 5: elevated and all kinds of happens in a little bit

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Speaker 5: of a vacuum. He also said that the market pricing

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Speaker 5: two is doing a little bit of the work for

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Speaker 5: the FED itself, and I think that is probably the

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Speaker 5: takeaway that everyone should have from that press conference.

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Speaker 2: Because there was a lot of focus on the idea

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Speaker 2: of how this dramatic rise in treasury yields have done

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Speaker 2: some of the work of the FED for them, So

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Speaker 2: that's providing a bit of a relief for your own

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Speaker 2: power as well. The Bloomberg instag M Life Pull survey

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Speaker 2: after the FED decision showed majority of respondents see yields

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Speaker 2: on ten year treasuries so climbing past five percent, So

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Speaker 2: it looks like this might not be over well.

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Speaker 5: That was his entire point, though, he said, yes, it's

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Speaker 5: doing a lot of the work right now. The question

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Speaker 5: is is it sustained. Because you can also also see

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Speaker 5: yields go in the opposite direction, which we are seeing

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Speaker 5: this morning as well. And I would argue that if

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Speaker 5: you can make the argument that yields to the upside

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Speaker 5: are doing a lot of the work for the Fed

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Speaker 5: in terms of rate hikes, do yields to the downside

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Speaker 5: serve as some sort of rate cut for the Federal Reserve?

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Speaker 5: And that's of course a lot of extended thinking and

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Speaker 5: chairman power. If I'd asked him that question, would say,

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Speaker 5: it depends on how long those yields are lower for

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Speaker 5: it to really make an impact, whereas we've have seen

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Speaker 5: the sustained selling that's leading to the momentum and ripple

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Speaker 5: effects the mortgage market.

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

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Speaker 2: Now let's bring you one of our top interviews. The

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Speaker 2: Barkley's chief executive says he plans to spare the Asian

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Speaker 2: business in the bulk of job cuts as the British

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Speaker 2: Bank embarks on a reduction in its global workforce. Cs

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Speaker 2: Foncata Christianism speaking to Bloomberg at the Banks and you

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Speaker 2: will age a forum in Singapore where he address the

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Speaker 2: issue of cost cutting. While speaking to our colleague Haslinda

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Speaker 2: amen So the.

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Speaker 6: Bank since twenty nineteen with COVID, with everything else, has

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Speaker 6: not really looked at its own efficiency.

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Speaker 9: And our workforce has grown.

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Speaker 6: In many areas and what we are trying to and

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Speaker 6: at the same time we grew it for a lot

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Speaker 6: of projects and investments. Many of those projects are coming

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Speaker 6: to an end and obviously we will look to redeploy

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Speaker 6: staff in other areas, but there will be some areas

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Speaker 6: where we can become more efficient and that's what we

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Speaker 6: will do. Yes, Well, I think it cuts across, It

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Speaker 6: cuts across.

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Speaker 9: Different activities which we do.

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Speaker 6: And I think what we are if you look at

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Speaker 6: the cost income ratios of our various divisions, they are

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Speaker 6: slightly higher than the competition, and we should get to

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Speaker 6: a level which is more akin to the competition.

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Speaker 11: Does cutting structural cost mean a reduction in your workforce,

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Speaker 11: whether it's globally, whether it is in Asia, and I

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Speaker 11: just wondering what the impact would be in this part

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Speaker 11: of the world.

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Speaker 6: So it is a reduction in workforce generally speaking. In Asia,

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Speaker 6: we of course have very booming economies and we also

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Speaker 6: have a very growing business, so proportionately it's far less

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Speaker 6: likely to impact this region.

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Speaker 11: Is there a way of quantifying first the numbers, and

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Speaker 11: two where might the cuts be done? Would it be

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Speaker 11: perhaps your investment banking front office. Is there a sense

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Speaker 11: you can provide?

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Speaker 6: So there is a way of quantifying, of course, but

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Speaker 6: I'd rather keep that discussion to February. In terms of businesses,

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Speaker 6: it is not so much business specific as trying to

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Speaker 6: look at all of our businesses and get them to

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Speaker 6: a productivity and an efficiency that we think benchmarks well

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Speaker 6: to our competition. And so there will be more or

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Speaker 6: less in different areas in different businesses.

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Speaker 11: You're optimistic about Asia, where are the growth markets? Where

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Speaker 11: are the growth areas?

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Speaker 9: So I think you have to take a very very

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Speaker 9: very long view in these.

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Speaker 11: Things, and by that what twenty years at least.

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Speaker 9: At least twenty to thirty years.

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Speaker 6: You know, Barclays started in Singapore fifty years ago. As

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Speaker 6: you mentioned, we started with nine people and a ninety

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Speaker 6: pounds annual budget. Okay, now the numbers are of course

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Speaker 6: much much larger, but it was the vision of those

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Speaker 6: people then to invest with a dollar bond trading desk

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Speaker 6: and clearing. In the same way we have investments in

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Speaker 6: India where we have a full fledged capability in investment

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Speaker 6: in corporate banking and wealth. We've got, of course a

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Speaker 6: large trading center here in Singapore, We've got it in

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Speaker 6: Hong Kong and in Tokyo. I think all I think

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Speaker 6: Asia generally speaking is growing at a much faster rate

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Speaker 6: than the West. Is going through a bit of a

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Speaker 6: growth spirit right now, but certainly more than Europe and

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Speaker 6: the UK are banking should generally grow at the rate of.

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Speaker 9: GDP over the long period.

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Speaker 6: So that means for us it's important to be in

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Speaker 6: Asia where there is growth. We are a wholesale bank

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Speaker 6: here largely we do some private banking, which means it

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Speaker 6: is for us the ability to connect with corporate clients

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Speaker 6: and institutions in Asia and to help them in turn

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Speaker 6: connect with the capital markets in London and New York.

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Speaker 11: Asia of course diverse. We talk about Asia growing, but

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Speaker 11: when you take a look at a key market like

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Speaker 11: China is actually slowing down from what it is used

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Speaker 11: to eight percent now possibly four even less. How are

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Speaker 11: you looking at China and the potential, especially for your

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Speaker 11: wealth management business.

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Speaker 6: So we are largely an institutional business, and I think

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Speaker 6: in wealth it would be a little ambitious for us

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Speaker 6: to try to think of China right now. We should

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Speaker 6: do better in the UK, but in China itself. Look,

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Speaker 6: there are many countries in the world which would take

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Speaker 6: four percent, and China has accumulated a lot of capital,

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Speaker 6: a lot of skill, and you know, yes, there are

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Speaker 6: excesses in parts of the Chinese economy in real estate,

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Speaker 6: but their technological process.

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Speaker 9: Is really strong.

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Speaker 6: The entire clean energy economy cannot exist without Chinese components,

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Speaker 6: and Chinese raw materials, and even Chinese finished goods like

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Speaker 6: cars are beginning to occupy a greater and greater space.

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Speaker 9: So you cannot ignore China.

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Speaker 6: You have to think about China and helping Chinese companies

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Speaker 6: connect to the world. India, of course, is growing very well,

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Speaker 6: and so other parts of this region, but it will

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Speaker 6: be what we do is concentrated in the major trading

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Speaker 6: centers and the major economies.

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Speaker 11: And we're hearing that Japan has been the strongest market

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Speaker 11: for you give us a sense of what you're seeing

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Speaker 11: in the plans in Japan in particular.

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Speaker 9: So we've been in Japan also for a very long time.

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Speaker 11: It is suddenly alive.

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Speaker 6: Yeah, well, it took thirty years, so you have to

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Speaker 6: be patient sometimes, but Japan is seeing a reflection, I

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Speaker 6: mean interest rates, the stock market, Japanese companies, Japanese banks.

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Speaker 6: We are a very large participant in the Tokyo Stock Exchange.

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Speaker 6: And one of the things that we have invested in

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Speaker 6: Asia consistently over many years is what we call our

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Speaker 6: prime business, allowing people to trade equities, borrow against equities,

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Speaker 6: and we provide low latency connections to all the major

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Speaker 6: exchanges in Asia.

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Speaker 9: It's one of our specialties, and so we do.

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Speaker 6: That in Tokyo and in Hong Kong, and that is

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Speaker 6: we'll continue to invest in that.

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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 11: M mm hmm