Speaker 1: Good morning. It's Monday, the sixteenth of October here in London.
Speaker 1: This is the Blueberg Daybreak europe podcaster. I'm Caroline Hepge.
Speaker 1: Coming up today a diplomatic drive. America scrambles to contain
Speaker 1: the fallout from the Israel Hamas war as the risk
Speaker 1: of escalation grows. The US also prepares to tighten curbs
Speaker 1: on China's access to advanced chip technology. Plus housing in
Speaker 1: growth data in the UK point to pessimism about the
Speaker 1: prospects for the economy. Here, let's start with a roundup
Speaker 1: of our top stories. President Joe Biden is considering a
Speaker 1: trip to Israel as Western nations rampop efforts to prevent
Speaker 1: the war with ha Mass from engulfing the region. The
Speaker 1: diplomatic push comes as the US confirmed that the country
Speaker 1: has held back channel talks with Iran, warning Tehran against
Speaker 1: escalating the conflict. The efforts to keep the crisis from
Speaker 1: further escalating comes as Israel continues to prepare for a
Speaker 1: likely ground invasion of Gaza. In an interview with CBS's
Speaker 1: news is sixty Minutes, President Biden stressed his belief that
Speaker 1: Israel will act in accordance with international law. But stressing
Speaker 1: he doesn't believe the country should control the territory long term.
Speaker 2: I think it'd be a big mistake. Look what happened
Speaker 2: in Gaza. In my view is Hamas in the extreme
Speaker 2: elements of mass don't represent all the Palestinian people, and
Speaker 2: I think that it would be a mistake, prettys real
Speaker 2: to occupy Garz again.
Speaker 1: Meanwhile, Israel's ambassador to the United States, Michael Herzog, spoke
Speaker 1: to see an End State of the Union about the
Speaker 1: country's likely invasion of the Gaza Strip.
Speaker 3: We have no desire to occupy or reoccupy Gaza. We
Speaker 3: have no desire to rule over the lives of over
Speaker 3: two million Palestinians, and certainly want people to go back
Speaker 3: to the homes. We're talking about innocent civilians and we
Speaker 3: are doing everything we can to keep them out of
Speaker 3: harms way, while Hamas is doing everything it can to
Speaker 3: keep them in harm's way. That's a situation we are at.
Speaker 1: Hertzog spoke after the Israeli military released a statement saying
Speaker 1: that they are now preparing for an attack on the
Speaker 1: Gaza Strip from quote air, sea and land. Palaesinian authorities
Speaker 1: say that close to two and half thousand people have
Speaker 1: been killed during Israel's bombardment of Gaza. The bombings come
Speaker 1: in response to the initial attack by Hamas, which killed
Speaker 1: at least one thousand, three hundred people. This as the
Speaker 1: UN estimates that Garza's main hospital is close to running
Speaker 1: out of fuel to power its generators. Doctor Kassan Abusita
Speaker 1: is a Mezza sin Frantier surgeon working there. He says
Speaker 1: that the civilian cost of a ground invasion will be
Speaker 1: hard to bear.
Speaker 4: It'll be in absolute catastrophe carnage. Gaza is so densely populated,
Speaker 4: two and a quarter million people in a very small
Speaker 4: area of lab This is a turky shoot, and if
Speaker 4: you go into Gaza, you go in knowing that you're
Speaker 4: going to have to commit massacres.
Speaker 1: Those comments come as the Israeli military said that it
Speaker 1: believes that more than six hundred thousand people have left
Speaker 1: Girlza city and the surrounding area for the south of
Speaker 1: the territory. Meanwhile, the only border crossing between Egypt and
Speaker 1: Gaza is expected to open this morning, allowing aid to
Speaker 1: enter and foreign nationals to evacuate. Now onto some other
Speaker 1: stories this morning, the United States is planning to tighten
Speaker 1: measures on China's access to advance semiconductors and chip making
Speaker 1: equipment with more his Bloombergs head Baxter.
Speaker 5: The first round happened in October, described as sweeping. So
Speaker 5: what this will do is tighten the measures already in
Speaker 5: place to refine to close loopholes controls on selling graphic
Speaker 5: chips for AI and advanced chip making equipt the Chinese firms.
Speaker 5: The US will also add Chinese chip design firms to
Speaker 5: a trade restriction list on AI and impose additional checks
Speaker 5: to firms trying to evade restrictions already in place by
Speaker 5: routing through other nations, Ed Baxter, Bloomberg Radio.
Speaker 1: Poland's opposition leader, Donald Tusk, has declared victory in the
Speaker 1: country's general election, mocking a possible shift in the tide
Speaker 1: of populist forces in europe An. Exit poll predicts that
Speaker 1: the ruling nationalist Law and Justice Party has lost its
Speaker 1: majority in parliament to a coalition led by the former
Speaker 1: European Council President. Turnout was estimated at seventy three percent,
Speaker 1: a record. The upset could steer the country back into
Speaker 1: the European mainstream after the EU withheld more than thirty
Speaker 1: five billion Euros to punish Warsaw for curbing the independence
Speaker 1: of judges and the media. Here in the UK, home
Speaker 1: seller is a tr trimming their expectations, with October's asking
Speaker 1: prices rising by the smallest amounts since two thousand and eight.
Speaker 1: Bloomberg's James Walcock reports.
Speaker 6: Right Moves say the housing market is the most price
Speaker 6: sensitive it's ever been. The toxic cocktail of higher mortgage
Speaker 6: rates and inflation is hitting seller confidence, with sales down
Speaker 6: seventeen percent compared to October last year. Landlords are also
Speaker 6: being hard, paying forty percent more in mortgage interests than
Speaker 6: a year ago. That's led many to pass on costs
Speaker 6: to renters or leave the market altogether in London, James Wilcock,
Speaker 6: Bloomberg Radio.
Speaker 7: Now.
Speaker 1: In US politics, House Democrats say that they are having
Speaker 1: informal talks with Republicans about a potential bipartisan solution to
Speaker 1: find a speaker. Democratic leader Hakim Jeffries has told NBC's
Speaker 1: Meet the Press that politicians need to move onto the
Speaker 1: people's real priorities.
Speaker 8: We want to continue to put people over politics and
Speaker 8: to fight for things like lower costs, better paying jobs,
Speaker 8: safer communities, and to build an economy that works from
Speaker 8: the middle out and the bottom up. On the other hand,
Speaker 8: House Republicans have been focused on fighting each other. It's
Speaker 8: time to in the Republican civil war.
Speaker 1: Hakeem Jeffreys added that he would support changes to the
Speaker 1: House's rules to prevent hardline Republicans who ousted the Speaker,
Speaker 1: Kevin McCarthy from setting the agenda. Representative Jim Jordan is
Speaker 1: currently the front runner for the speaker position, but a
Speaker 1: number of moderate Republicans have said that they will not
Speaker 1: support him. A word then, on the specific response to
Speaker 1: what's happening in Israel here in the UK. Over the weekend,
Speaker 1: thousands of people demonstrated in support of Palestinians. Be gathering
Speaker 1: in London attracted large crowds but also more than a
Speaker 1: thousand Metropolitan Police offices. The police had warned in advance
Speaker 1: that anyone showing support for Hamas could face arrests. There
Speaker 1: were also rallies in Manchester and Edinburgh. The UK government,
Speaker 1: though remained steadfast in it support of Israel. There have
Speaker 1: been concerns, of course, about the scale of the Israeli response,
Speaker 1: but Rishi Sunac saying that at least on Friday and
Speaker 1: over the weekend. The country has every right to defend itself,
Speaker 1: although he stressed that civilian safety is paramount in our mind,
Speaker 1: so that the response from the UK Prime Minister Rishi
Speaker 1: Sunac I mean a similar response also from the opposition
Speaker 1: Labor Party. It must be said, but it was noteworthy
Speaker 1: that there are those demonstrations in the UK over the weekend. Meanwhile,
Speaker 1: the spokesman for the Israeli embassy here in the UK
Speaker 1: insisted that Israel is not targeting civilians, but to talk
Speaker 1: about the impact and the casualties of the conflict with
Speaker 1: Hamas in Gaza, meaning that is innocent people will pay
Speaker 1: tragically with their life. So that's the view then from
Speaker 1: the UK. Let's also talk, though more broadly, about what's
Speaker 1: happening diplomatically. So the US Secretary of State Anthony Blincoln
Speaker 1: is returning to Israel after diplomatic talks with Saudi Arabia
Speaker 1: and Egypt and a warning from the US to Iran
Speaker 1: against escalating the conflict. President Biden may also visit Israel soon.
Speaker 1: He has told US media that he believes Israel would
Speaker 1: act by the rules of war. The Israeli army is
Speaker 1: poised to stage a large scale offensive in girls, something
Speaker 1: that we've heard now for a number of days. Joining
Speaker 1: us in the studio, Bloomberg's news director in Europe, the
Speaker 1: Middle East and Africa, Rosslyn Mathis, and good Morning Rolls.
Speaker 1: Thank you so much for being with us. How does
Speaker 1: Israel firstly wipe out Hamas on the ground, it stated aim?
Speaker 1: How can that objective be realized?
Speaker 7: Well, that is the big question in fact, ken it
Speaker 7: wipe out Hamas on the ground as well as how
Speaker 7: and does it really want to? You're talking about a
Speaker 7: group that does have a leadership structure and a lot
Speaker 7: of organization, but it's also really quite a morphis in
Speaker 7: many ways, and so sort of splinter groups that come
Speaker 7: off at, support groups that come off it, and a
Speaker 7: load of tentacles everywhere through the region. So the question
Speaker 7: is how do you destroy all of that once and
Speaker 7: for all, And in doing so, can you destroy the
Speaker 7: support for it as well? Because you can say that
Speaker 7: you've decimated Harmas, but does something else just grow back
Speaker 7: in its place. It's like a many headed hydra in
Speaker 7: a way. So is the realistic goal to destroy Hamas
Speaker 7: or is it simply to get hermas so denuded to
Speaker 7: the point that it can never again mount the attack
Speaker 7: of the kind that we saw just over a week
Speaker 7: ago inside Israeli's soil. Of course, with the mass casualties
Speaker 7: on the civilian side, is the goal ultimately to weaken
Speaker 7: it to the point that it really is such a
Speaker 7: shell of itself that an attack like that can never
Speaker 7: happen again.
Speaker 1: Will Palestinians get more access to food, to water, to supplies?
Speaker 1: Pas in Biden even mentioned a safe zone the border
Speaker 1: crossing it rafa. What is the situation for Palestinians.
Speaker 7: It's still pretty desperate. We're hearing that the Rougher crossing
Speaker 7: may open for a limited amount of time today. We've
Speaker 7: had that, of course several times over the past few days,
Speaker 7: and it's not really eventuated. And even if it does,
Speaker 7: the US is cautioning like it may not be safe
Speaker 7: to cross, even if there is an ability to do
Speaker 7: so for several hours. So the options for Palestinians and
Speaker 7: Gars will remain very limited. And also for sort of
Speaker 7: Americans who are there, others who are trying to get out,
Speaker 7: how can you leave even if you want to, So
Speaker 7: that's one question. Also, the conditions inside Gars we know
Speaker 7: are pretty terrible. We know in the hospitals in the north.
Speaker 7: There are loads of people, tens of thousands of people
Speaker 7: crowded into hospitals to seek sort of some sort of
Speaker 7: safe haven in the event of a war. We know
Speaker 7: that water did get turned back on to the southern
Speaker 7: part of Gaza. That's possibly designed to coax people to
Speaker 7: move south. If you go there, you will at least
Speaker 7: have access to water. But right now there's no sort
Speaker 7: of clear passageway for people to get or also for
Speaker 7: stuff to get in, which includes food.
Speaker 1: I use this phrase advisedly, but there does seem to
Speaker 1: be a palpable sense of panic from the intensive shottle diplomacy.
Speaker 1: What are the worries about a wider conflict currently?
Speaker 6: Well, that's right.
Speaker 7: I was trying to think back to the last time
Speaker 7: a US Secretary of State had visited so many countries
Speaker 7: in quick succession. We were talking about nine countries, some
Speaker 7: of them twice in about four days. Going back to
Speaker 7: Israel today, now talk the US President Johan Biden may
Speaker 7: even make a lightning visit to Israel within days, And
Speaker 7: all of that is conveying this growing sense that we're
Speaker 7: hurtling towards something big and broad in the region and
Speaker 7: this sort of effort to do several things. One is
Speaker 7: possibly to persuade Israel simply to stave off a ground
Speaker 7: war inside Gaza. The other is to talk to countries
Speaker 7: in the region to try and negotiate things like hostage transfer,
Speaker 7: safe passage of people from Gaza, humanitarian aid and so on.
Speaker 7: And the third one, of course is to disuade around
Speaker 7: and others from getting involved. That if a grand war
Speaker 7: does kick off and you've got Hiszbala of course supported
Speaker 7: by Iran to the north of Israel, and there's skirmish
Speaker 7: is going on there obviously already. So the real sense
Speaker 7: of concern in the US, also in Europe and in
Speaker 7: the region is that this is going to at some
Speaker 7: point draw in those other actors, and then where does
Speaker 7: this war end?
Speaker 1: Yeah, indeed, Roslin, thank you so much for being with
Speaker 1: us this morning, Bloomberg's news director in Europe, the Middle
Speaker 1: East and Africa, Roslyn Matheson, as we will watch the
Speaker 1: Sectary of State Anthony Blincoln, expected to return to Israel today. Now,
Speaker 1: the United States is planning to tighten measures against China
Speaker 1: to restrict its access to advanced semiconductors and chip making gear.
Speaker 1: This is an update to curbs that were announced a
Speaker 1: year ago that were criticized for failing to get support
Speaker 1: from Kili's, notably the Netherlands in Japan. So I want
Speaker 1: to speak to our Bloomberg Chi and Economy and government.
Speaker 1: Edited Jill Deesis this morning. Good morning, Jail, thanks for
Speaker 1: being with us. How effective were the restrictions lost? Yeah,
Speaker 1: I mean this is a significant point of tension between
Speaker 1: the US and China.
Speaker 9: Yes, Caroline, well, I think, you know, it's a pretty
Speaker 9: complicated topic for some reasons. I'm sure we'll get into
Speaker 9: in a few moments, but the short of it is that,
Speaker 9: as you just said, you know, those restrictions were unveiled
Speaker 9: before the US got the support of key allies, including
Speaker 9: the Netherlands and Japan. That essentially allowed equipment companies in
Speaker 9: those countries to continue selling advanced gear to Chinese customers.
Speaker 9: It's part of it. But I think what ultimately they're
Speaker 9: trying to accomplish with this proposed set of you know,
Speaker 9: refining and closing some loopholes, is looking to strengthen some
Speaker 9: controls on selling graphics chips for AI applications. That's a
Speaker 9: big part of it. They also want to try to
Speaker 9: figure out how they can, you know, restrict additional advanced
Speaker 9: chip makeing equipment to Chinese firms through other ways. And
Speaker 9: they also just want to impose additional checks and Chinese
Speaker 9: firms that are trying to evade export restrictions by routing
Speaker 9: shipments through other nations. So ideally what the US would
Speaker 9: be looking at is maybe adding design firms in China
Speaker 9: to a trade restriction list, and so that trying to
Speaker 9: trying to show up things there. But yes, I think ultimately,
Speaker 9: I think it's really just about trying to find ways
Speaker 9: to stop these Chinese companies from routing things through other
Speaker 9: countries or ultimately using things for applications in advanced tech
Speaker 9: that the US is reluctant to a lot of them
Speaker 9: to do.
Speaker 1: So, okay, so trying to tighten not the rules, close
Speaker 1: off the loopholes. I mean there have been, though, in
Speaker 1: the meantime, quite notable successes for China in developing its
Speaker 1: own domestic capabilities.
Speaker 9: Right, Yes, I'm glad you brought that up, because I
Speaker 9: think that that's ultimately what makes this the effectiveness of
Speaker 9: those rules last year such an open question. So the
Speaker 9: big one that made a huge splash was just a
Speaker 9: few weeks ago when Huawei, the major Chinese telecoms tech
Speaker 9: maker that the US has been imposing restrictions on since
Speaker 9: twenty nineteen as part of, you know, sort of the
Speaker 9: poster child really for those big, big US China tensions
Speaker 9: during during the trade war, as they were trying to
Speaker 9: short up these things, they had this pretty massive breakthrough
Speaker 9: with a phone we tore down actually just a few
Speaker 9: weeks ago that showed they produced this chip by a
Speaker 9: Chinese company that developed these manufacturing capabilities that the US
Speaker 9: thought were well beyond where they thought that the company
Speaker 9: had stopped advancing. So their ability to sort of create
Speaker 9: this phone that had really really competitive tech within the
Speaker 9: Chinese consumer market, I think has raised a lot of
Speaker 9: questions about, you know, how advanced China is able to get.
Speaker 9: The US is still investigating that phone and trying to
Speaker 9: figure out exactly where things happened there, But I think
Speaker 9: that that kind of came as a surprise and ultimately
Speaker 9: is facilitating some of these new restriction announcements.
Speaker 1: This has been big day break. You up your morning
Speaker 1: brief on the stories making news for London to Wall
Speaker 1: Street and beyond for us on your podcast feed every
Speaker 1: morning on Apple, Spotify, and anywhere else you get your podcasts.
Speaker 1: You can also listen live each morning on London Dab Radio,
Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. Our flagship
Speaker 1: New York station, is also available on your Amazon Alexa device.
Speaker 1: Just say Alexa play Bloomberg eleven point thirty. I'm calling Hepga.
Speaker 1: Join us again tomorrow morning for all the news you
Speaker 1: need to start your day right here on Bloomberg Daybreak
Speaker 1: Europe