1 00:00:03,160 --> 00:00:05,960 Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the 2 00:00:05,960 --> 00:00:08,560 Speaker 1: top stories in the coming week from our Daybreak anchors 3 00:00:08,600 --> 00:00:11,120 Speaker 1: all around the world, and straight ahead on the program. 4 00:00:11,320 --> 00:00:15,000 Speaker 1: The May Jobs Report out this week. I'm Tom Busby 5 00:00:15,200 --> 00:00:15,840 Speaker 1: in New York. 6 00:00:16,040 --> 00:00:18,560 Speaker 2: I'm Brian Curtis in Hong Kong. We look forward to 7 00:00:18,640 --> 00:00:21,720 Speaker 2: China's PMIS and what they might tell us about China's 8 00:00:21,760 --> 00:00:23,400 Speaker 2: on again, off again recovery. 9 00:00:23,560 --> 00:00:26,200 Speaker 3: I'm Stephen Caroen in London, where European central bankers are 10 00:00:26,239 --> 00:00:29,240 Speaker 3: closely watching the upcoming set of inflation data to see 11 00:00:29,280 --> 00:00:31,639 Speaker 3: how sticky price rises have become. 12 00:00:33,880 --> 00:00:37,880 Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg. 13 00:00:37,880 --> 00:00:40,360 Speaker 4: You look them free on New York Bloomberg ninety nine 14 00:00:40,400 --> 00:00:43,839 Speaker 4: to one, Washington, DC, Bloomberg one O six one, Boston, 15 00:00:43,880 --> 00:00:48,560 Speaker 4: Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Seria 16 00:00:48,680 --> 00:00:52,080 Speaker 4: SIXM one nineteen and around the world on Bloomberg Radio 17 00:00:52,159 --> 00:00:54,400 Speaker 4: dot Com and via the Bloomberg Business Appe. 18 00:00:58,200 --> 00:01:00,240 Speaker 1: Good day to you. I'm Tom Busby and get in 19 00:01:00,280 --> 00:01:03,840 Speaker 1: today's program with the May Jobs Report and joining me 20 00:01:03,880 --> 00:01:06,520 Speaker 1: now to talk about it. Bloomberg Global Economic and Policy 21 00:01:06,600 --> 00:01:08,960 Speaker 1: Editor Michael McKee, Michael, thanks for being here. 22 00:01:09,080 --> 00:01:09,840 Speaker 5: Great to be here. 23 00:01:10,160 --> 00:01:13,560 Speaker 1: Last month's jobs number beat estimates, underscoring the resilience of 24 00:01:13,600 --> 00:01:16,800 Speaker 1: the labor to market despite higher interest rates, rising inflation, 25 00:01:17,080 --> 00:01:20,440 Speaker 1: tightening credit conditions. What are we looking at for the 26 00:01:20,440 --> 00:01:21,839 Speaker 1: month of May this coming week. 27 00:01:22,720 --> 00:01:25,960 Speaker 5: We're looking at an economy that is still firing on 28 00:01:26,000 --> 00:01:29,160 Speaker 5: all cylinders, no matter how high interest rates have gone. 29 00:01:29,240 --> 00:01:34,000 Speaker 5: It appears as we speak the change in payrolls number 30 00:01:34,800 --> 00:01:36,959 Speaker 5: has gone up from one hundred and fifty five thousand 31 00:01:37,080 --> 00:01:41,040 Speaker 5: last Monday to one hundred and ninety five thousand. Now. 32 00:01:41,560 --> 00:01:44,200 Speaker 5: I've just taking a look at the Whisper Number survey 33 00:01:44,319 --> 00:01:47,080 Speaker 5: on the Bloomberg and Wall Street thinks we're going to 34 00:01:47,080 --> 00:01:49,560 Speaker 5: get two hundred and thirty seven thousand. We get the 35 00:01:49,640 --> 00:01:54,320 Speaker 5: ISM numbers, which at least for manufacturing, which will give 36 00:01:54,360 --> 00:01:57,040 Speaker 5: us an employment number. We get the ADP numbers, and 37 00:01:57,120 --> 00:02:00,800 Speaker 5: we'll have another jobless claims number. So there are going 38 00:02:00,880 --> 00:02:03,360 Speaker 5: to be some additional inputs into these forecasts, but right 39 00:02:03,400 --> 00:02:06,160 Speaker 5: now things look very strong. It's hard to explain the 40 00:02:06,160 --> 00:02:08,320 Speaker 5: strength of the economy other than this is a post 41 00:02:08,360 --> 00:02:12,120 Speaker 5: pandemic weird kind of situation where companies had such a 42 00:02:12,160 --> 00:02:15,040 Speaker 5: hard time getting people to come back to work that 43 00:02:15,240 --> 00:02:18,720 Speaker 5: they are afraid to let them go. Demand is strong 44 00:02:18,840 --> 00:02:21,720 Speaker 5: enough that they don't have to let them go, and 45 00:02:22,480 --> 00:02:24,840 Speaker 5: they're at this point going to hang on to their 46 00:02:24,880 --> 00:02:26,480 Speaker 5: workers as long as they can. 47 00:02:26,639 --> 00:02:28,720 Speaker 1: And let's go back to some of the data that 48 00:02:29,040 --> 00:02:31,560 Speaker 1: you mentioned that came out last week. I know we 49 00:02:31,639 --> 00:02:35,880 Speaker 1: have ahead, and I think that indicates the strength. Like manufacturing, 50 00:02:35,919 --> 00:02:38,560 Speaker 1: we had a durable goods order expecting a decline. We 51 00:02:38,600 --> 00:02:39,320 Speaker 1: saw an increase. 52 00:02:39,560 --> 00:02:42,440 Speaker 5: Yeah, durable goods were up by one point one percent, 53 00:02:42,600 --> 00:02:46,800 Speaker 5: and the decline was what had been forecast. The capital 54 00:02:46,880 --> 00:02:50,600 Speaker 5: goods orders non defense x AIR, which is what economists 55 00:02:50,639 --> 00:02:53,680 Speaker 5: look at because it's sort of a proxy for business 56 00:02:53,720 --> 00:02:56,640 Speaker 5: spending when you're talking about GDP, that was up one 57 00:02:56,680 --> 00:03:00,000 Speaker 5: point four percent and the forecast was for a declar 58 00:03:00,080 --> 00:03:03,160 Speaker 5: line of a tenth of a percent after a decline 59 00:03:03,200 --> 00:03:06,280 Speaker 5: the prior month. So business spending, which had been a 60 00:03:06,280 --> 00:03:09,680 Speaker 5: weak point in first quarter GDP, seems to be getting 61 00:03:09,720 --> 00:03:12,959 Speaker 5: a little bit stronger. And then you had consumer spending 62 00:03:13,160 --> 00:03:15,840 Speaker 5: up eight tenths of eight percent. The forecast was for 63 00:03:15,960 --> 00:03:19,960 Speaker 5: five always difficult around Easter to put the two numbers 64 00:03:19,960 --> 00:03:24,000 Speaker 5: together for the two months, so we expected April to 65 00:03:24,000 --> 00:03:27,080 Speaker 5: be a little stronger than March because Easter fell in 66 00:03:27,120 --> 00:03:29,800 Speaker 5: early April. But you add the two together and you 67 00:03:29,919 --> 00:03:32,639 Speaker 5: still have a consumer that's just not given up. 68 00:03:33,560 --> 00:03:36,440 Speaker 1: And that's in the face of rising inflation. Yes, the 69 00:03:36,480 --> 00:03:39,240 Speaker 1: growth has slowed, but prices are still going higher. 70 00:03:39,400 --> 00:03:41,720 Speaker 5: Yeah, that's one thing we have to account for here, 71 00:03:41,760 --> 00:03:45,320 Speaker 5: and that is that the spending numbers are not adjusted 72 00:03:45,360 --> 00:03:49,280 Speaker 5: for inflation, so a certain amount of that is inflation. 73 00:03:50,080 --> 00:03:54,080 Speaker 5: But it is still a strong economy and it doesn't 74 00:03:54,120 --> 00:03:56,640 Speaker 5: give the Fed any reason to think that we are 75 00:03:56,680 --> 00:03:58,640 Speaker 5: going to fall off a cliff and the infrastrates are 76 00:03:58,680 --> 00:04:00,280 Speaker 5: going to have to come down anytime soon. 77 00:04:00,640 --> 00:04:03,720 Speaker 1: Wow. Yes, a lot of strength, but we are seeing 78 00:04:04,360 --> 00:04:08,000 Speaker 1: some signs in the tech sector and the banking sector 79 00:04:08,160 --> 00:04:11,400 Speaker 1: of maybe a little bit of pullback on jobs. Many 80 00:04:11,440 --> 00:04:15,040 Speaker 1: tech companies have pulled back and told recent college grads 81 00:04:15,280 --> 00:04:17,680 Speaker 1: that you know what, take the summer off, contact us 82 00:04:17,680 --> 00:04:21,400 Speaker 1: again in September. And this banking crisis certainly has changed 83 00:04:21,440 --> 00:04:23,560 Speaker 1: things for some of the smaller regional lenders. 84 00:04:24,320 --> 00:04:28,440 Speaker 5: For the graduates, it is still a strong job market, 85 00:04:28,520 --> 00:04:31,640 Speaker 5: but not as strong as it was because the categories 86 00:04:31,640 --> 00:04:33,679 Speaker 5: that if you're a college graduate, you're probably going into 87 00:04:33,960 --> 00:04:36,080 Speaker 5: aren't going to be as strong now. The real effect 88 00:04:36,240 --> 00:04:37,640 Speaker 5: is going to be on mom and dad, because you 89 00:04:37,680 --> 00:04:40,120 Speaker 5: tell the kids to take the summer off, they're going 90 00:04:40,160 --> 00:04:42,240 Speaker 5: to take the summer off and they're going to enjoy it. 91 00:04:42,560 --> 00:04:45,080 Speaker 5: But there are still a lot of part time jobs 92 00:04:45,080 --> 00:04:49,839 Speaker 5: they could get because the lower income service industry jobs 93 00:04:49,839 --> 00:04:53,160 Speaker 5: are still out there for them. As far as tech 94 00:04:53,160 --> 00:04:57,200 Speaker 5: and banking, banking is a little I don't want to 95 00:04:57,279 --> 00:04:59,840 Speaker 5: use the word idiosyncratic because we use that so much 96 00:05:00,080 --> 00:05:02,680 Speaker 5: these days, but it's a situation where you've got a 97 00:05:02,720 --> 00:05:06,560 Speaker 5: couple of banks failing that have very large footprints in 98 00:05:06,680 --> 00:05:10,920 Speaker 5: terms of employment, and their new bosses don't need as 99 00:05:11,000 --> 00:05:14,080 Speaker 5: many people because they've already got a staff. So that's 100 00:05:14,120 --> 00:05:17,160 Speaker 5: a little bit difficult for those who are losing their 101 00:05:17,240 --> 00:05:19,520 Speaker 5: jobs there. But in the tech sector, people have been 102 00:05:19,520 --> 00:05:23,800 Speaker 5: finding new jobs, and the FED has noticed. I've talked 103 00:05:23,800 --> 00:05:25,839 Speaker 5: to FED officials who say, you know, we don't worry 104 00:05:25,880 --> 00:05:29,000 Speaker 5: about tech because most of those people are very highly educated. 105 00:05:29,040 --> 00:05:33,120 Speaker 5: Tech is still in demand. It maybe not be at 106 00:05:33,120 --> 00:05:37,640 Speaker 5: certain companies, but at others they're growing, and so tech 107 00:05:37,640 --> 00:05:41,920 Speaker 5: people are getting jobs fairly quickly, and it isn't at 108 00:05:41,920 --> 00:05:43,840 Speaker 5: this point any kind of crisis. 109 00:05:44,160 --> 00:05:46,440 Speaker 1: And as you have said before, every company is a 110 00:05:46,480 --> 00:05:49,560 Speaker 1: tech company now, so some of these guys will leave Google, 111 00:05:49,680 --> 00:05:52,200 Speaker 1: they'll work it forward. Well, let's talk about one very 112 00:05:52,200 --> 00:05:55,919 Speaker 1: important metric in the jobs deportment at his salaries, wages. 113 00:05:56,240 --> 00:05:58,039 Speaker 1: What are we looking at as far as or what 114 00:05:58,160 --> 00:05:59,800 Speaker 1: is the FED looking at in waging? 115 00:06:00,880 --> 00:06:05,000 Speaker 5: Well, the Fed's view is that to get inflation running 116 00:06:05,000 --> 00:06:08,160 Speaker 5: at about its two percent target, that wages should only 117 00:06:08,240 --> 00:06:11,679 Speaker 5: go up about three to three and a half percent at. 118 00:06:11,480 --> 00:06:12,320 Speaker 6: An annual rate. 119 00:06:12,400 --> 00:06:16,000 Speaker 5: And right now they're rising a four point four percent 120 00:06:16,160 --> 00:06:19,120 Speaker 5: annual rate, and that's not forecast change in the next 121 00:06:19,200 --> 00:06:23,719 Speaker 5: jobs report. So we're still seeing wage increases as companies 122 00:06:24,279 --> 00:06:27,359 Speaker 5: look for workers. And I think what's happened here is 123 00:06:27,400 --> 00:06:32,440 Speaker 5: that the FED expected and most economists did too, that 124 00:06:32,560 --> 00:06:35,360 Speaker 5: we would see wage increases come down as the jobs 125 00:06:35,400 --> 00:06:39,480 Speaker 5: got filled and the jolt's job opening numbers started to 126 00:06:39,480 --> 00:06:43,440 Speaker 5: come down. But that doesn't seem to be happening at 127 00:06:43,480 --> 00:06:47,760 Speaker 5: this point. It seems that consumers and businesses are still 128 00:06:47,800 --> 00:06:50,880 Speaker 5: doing the inflation dance where people ask for more money 129 00:06:50,880 --> 00:06:54,279 Speaker 5: and businesses are saying, well, we have pricing power, we 130 00:06:54,360 --> 00:06:56,039 Speaker 5: can raise prices. 131 00:06:55,880 --> 00:06:58,760 Speaker 1: And that in turn just keeps inflation high. 132 00:06:59,040 --> 00:07:01,279 Speaker 5: One of the reasons we are seeing what they call 133 00:07:01,640 --> 00:07:02,760 Speaker 5: sticky inflation. 134 00:07:03,480 --> 00:07:05,839 Speaker 1: A nice segue into the Fed. It isn't very long 135 00:07:05,880 --> 00:07:08,960 Speaker 1: after this Friday's jobs number that the Fed meets again. 136 00:07:09,000 --> 00:07:12,280 Speaker 5: Yes, June thirteenth and fourteenth. Fourteenth is when we get 137 00:07:12,320 --> 00:07:18,640 Speaker 5: the decision, which is now widely expected to possibly be 138 00:07:18,680 --> 00:07:21,200 Speaker 5: another twenty five basis point increased, despite the fact that 139 00:07:21,240 --> 00:07:24,040 Speaker 5: they had signaled pause. A lot can happen between now 140 00:07:24,080 --> 00:07:25,960 Speaker 5: and then, because we get that job's report, we get 141 00:07:25,960 --> 00:07:30,440 Speaker 5: another CPI report. But there's a lot of pressure on 142 00:07:30,680 --> 00:07:34,880 Speaker 5: what's already a divided FED to perhaps raise interest rates 143 00:07:34,920 --> 00:07:37,880 Speaker 5: at least one more time. They could do it in June, 144 00:07:37,880 --> 00:07:39,760 Speaker 5: they could do it in July. But if you're going 145 00:07:39,840 --> 00:07:41,920 Speaker 5: to do it, you might as well get it over with, 146 00:07:42,160 --> 00:07:44,400 Speaker 5: is what a lot of people think. And so at 147 00:07:44,400 --> 00:07:48,080 Speaker 5: this point, the markets are pricing better than fifty percent 148 00:07:48,160 --> 00:07:50,520 Speaker 5: chance that we get a rate increase in June. I 149 00:07:50,640 --> 00:07:54,280 Speaker 5: was just talking with Liz McCormick, our brilliant bond writer 150 00:07:54,640 --> 00:07:58,520 Speaker 5: at Bloomberg News, and as she was pointing out in March, 151 00:07:59,200 --> 00:08:01,280 Speaker 5: beginning of March, but we're thinking that FED would go 152 00:08:01,320 --> 00:08:03,920 Speaker 5: to six percent and then we dropped all the way 153 00:08:03,960 --> 00:08:07,200 Speaker 5: down to rate cuts of four point three percent, and 154 00:08:07,320 --> 00:08:10,280 Speaker 5: now there is the possibility if we get a strong 155 00:08:10,360 --> 00:08:14,280 Speaker 5: jobs report that we head back north towards six. 156 00:08:14,520 --> 00:08:16,920 Speaker 1: Which would be well, right now, it's a sixteen year 157 00:08:17,040 --> 00:08:20,640 Speaker 1: high rates, so it would be two decade high at 158 00:08:20,720 --> 00:08:23,720 Speaker 1: least before you and I were born. Yeah, yeah, yeah, 159 00:08:23,800 --> 00:08:27,160 Speaker 1: Oh that's a long time ago. We have so many graduations. 160 00:08:27,200 --> 00:08:29,720 Speaker 1: Now it's May. We're going to see more and more 161 00:08:30,040 --> 00:08:32,680 Speaker 1: young people coming out of school. What kind of labor 162 00:08:32,720 --> 00:08:36,000 Speaker 1: market overall? We talked about the tech sector before, but 163 00:08:36,440 --> 00:08:40,600 Speaker 1: overall are they walking into I mean, the starting salaries 164 00:08:40,640 --> 00:08:42,640 Speaker 1: that some of these kids are commanding, and I call 165 00:08:42,720 --> 00:08:46,400 Speaker 1: them kids because they're twenty two years old, it's astounding. 166 00:08:47,040 --> 00:08:51,040 Speaker 5: Actually, it's kind of interesting. The labor market is stronger, 167 00:08:51,080 --> 00:08:53,959 Speaker 5: as we've been saying, than people expected, so there's probably 168 00:08:54,000 --> 00:08:57,160 Speaker 5: a better chance for them to get jobs. And certain 169 00:08:57,520 --> 00:09:00,360 Speaker 5: industries are always looking for people. It's a little these 170 00:09:00,440 --> 00:09:02,880 Speaker 5: days to get an investment banking job or even an 171 00:09:02,920 --> 00:09:06,959 Speaker 5: associate law job because they're not short of people at 172 00:09:06,960 --> 00:09:11,240 Speaker 5: this point. And what we've seen is in some categories, 173 00:09:12,120 --> 00:09:15,920 Speaker 5: your starting salaries are going up, but others they're going down, 174 00:09:16,400 --> 00:09:19,840 Speaker 5: you're not going to get the big bonuses or the 175 00:09:20,040 --> 00:09:25,280 Speaker 5: big salary, at least not as big in starting as 176 00:09:25,320 --> 00:09:30,120 Speaker 5: a legal associate or perhaps even in the tech sector 177 00:09:30,200 --> 00:09:34,480 Speaker 5: at this point because they don't need to. There's a 178 00:09:34,520 --> 00:09:37,240 Speaker 5: lot more people coming out of college for these first 179 00:09:37,240 --> 00:09:41,760 Speaker 5: time jobs than they needed before. And you mentioned banking bankers. 180 00:09:42,200 --> 00:09:46,240 Speaker 5: There's an excess of bankers out there with bankers banks 181 00:09:46,600 --> 00:09:49,960 Speaker 5: cutting back on their investment banking divisions because right now 182 00:09:49,960 --> 00:09:52,880 Speaker 5: people aren't doing a lot of mergers and acquisitions. 183 00:09:53,000 --> 00:09:57,199 Speaker 1: Yeah, and also you know retail sector also cutting back 184 00:09:57,200 --> 00:09:59,960 Speaker 1: a little bit or just not filling positions in the 185 00:10:00,440 --> 00:10:02,960 Speaker 1: may not be the desirable positions for a lot of people, 186 00:10:03,000 --> 00:10:04,120 Speaker 1: but they are jobs. 187 00:10:04,360 --> 00:10:07,120 Speaker 5: They are jobs, and that's one of the reasons we've 188 00:10:07,120 --> 00:10:09,640 Speaker 5: had a hard time filling those jobs is they aren't 189 00:10:09,679 --> 00:10:13,319 Speaker 5: the most desirable out there, but they do exist. And 190 00:10:13,880 --> 00:10:16,880 Speaker 5: it does help keep the inflation pressure up. Because if 191 00:10:16,920 --> 00:10:20,439 Speaker 5: you're Joe's Hamburger's and you need to hire somebody in 192 00:10:20,480 --> 00:10:23,360 Speaker 5: a higher minimum wage and you're going to probably raise 193 00:10:23,400 --> 00:10:25,000 Speaker 5: the cost of your hamburger. 194 00:10:24,840 --> 00:10:27,520 Speaker 1: I'd say we need more hamburger flippers. If you are lawyers, 195 00:10:27,800 --> 00:10:32,160 Speaker 1: that's just me Michael McKee, Bloomberg's Global Economic and Policy editor, 196 00:10:32,200 --> 00:10:34,520 Speaker 1: thank you so much for joining us. Coming up on 197 00:10:34,520 --> 00:10:38,280 Speaker 1: Bloomberg day Break weekend, European central bankers closely watching the 198 00:10:38,320 --> 00:10:41,240 Speaker 1: next round of inflation data to see whether price increases 199 00:10:41,280 --> 00:10:45,800 Speaker 1: there have remained stubbornly high too. I'm Tom Busby. This 200 00:10:45,880 --> 00:10:57,360 Speaker 1: is Bloomberg. This is Bloomberg Daybreak weekend, our global look 201 00:10:57,400 --> 00:11:00,000 Speaker 1: ahead at the top stories for investors in the coming week. 202 00:11:00,160 --> 00:11:03,240 Speaker 1: I'm Tom Busby in New York. There's a ton of 203 00:11:03,320 --> 00:11:06,679 Speaker 1: new inflation data coming out in Europe for central banks 204 00:11:06,720 --> 00:11:10,160 Speaker 1: to pour over. For details, we turned to Bloomberg Daybreak 205 00:11:10,200 --> 00:11:11,800 Speaker 1: europe banker Stephen Carroll. 206 00:11:12,480 --> 00:11:16,000 Speaker 3: Tom, it's another week of closely watched data here in Europe. 207 00:11:16,040 --> 00:11:19,280 Speaker 3: The energy price shock from Russia's invasion of Ukraine is dissipating, 208 00:11:19,400 --> 00:11:23,559 Speaker 3: but how much of that inflation is becoming sticky, particularly 209 00:11:23,600 --> 00:11:25,880 Speaker 3: in the core readings. That's something the European Central Bank 210 00:11:25,920 --> 00:11:28,360 Speaker 3: will be keenly watching. When we get updates from a 211 00:11:28,480 --> 00:11:31,200 Speaker 3: range of Europe's biggest economies in the coming days to 212 00:11:31,240 --> 00:11:34,240 Speaker 3: discuss this. I'm joined by Bloomberg's Chief European economist, Jamie Rush. 213 00:11:34,280 --> 00:11:37,199 Speaker 3: Jamie good to see you What is broadly the trend 214 00:11:37,320 --> 00:11:40,240 Speaker 3: that we're expecting for this set of data for the 215 00:11:40,280 --> 00:11:40,840 Speaker 3: month of May. 216 00:11:41,440 --> 00:11:43,080 Speaker 7: Well, it's kind of as you say. We've got big 217 00:11:43,120 --> 00:11:45,679 Speaker 7: base effects from energy costs which are dropping from the 218 00:11:45,679 --> 00:11:48,360 Speaker 7: annual comparison this month, so that's going to push the 219 00:11:48,400 --> 00:11:51,880 Speaker 7: headline rate down we think from about seven percent about 220 00:11:52,120 --> 00:11:55,080 Speaker 7: closer to six percent six point two percent. Fuel costs 221 00:11:55,080 --> 00:11:58,000 Speaker 7: are down as well, so petrol it's just cheaper, so 222 00:11:58,200 --> 00:12:01,520 Speaker 7: that's helping as well. And then we'll to have some subsidies. 223 00:12:01,559 --> 00:12:04,079 Speaker 7: We've got cheap rail tickets in Germany being introduced. That's 224 00:12:04,080 --> 00:12:06,320 Speaker 7: also going to push down on the headline and core. 225 00:12:06,240 --> 00:12:07,160 Speaker 1: Rate a little bit as well. 226 00:12:07,360 --> 00:12:11,079 Speaker 7: So that's the general picture. Core inflation, though, as we mentioned, 227 00:12:11,160 --> 00:12:13,679 Speaker 7: is likely to be stickier, but even there we'll see 228 00:12:13,720 --> 00:12:14,240 Speaker 7: a small drop. 229 00:12:14,440 --> 00:12:16,880 Speaker 3: Okay, So that's something that looks like at quite an 230 00:12:16,880 --> 00:12:20,240 Speaker 3: optimistic moment we hope in this anyway, Are there any 231 00:12:20,280 --> 00:12:23,000 Speaker 3: particular countries that you'll be watching closely, because we're getting 232 00:12:23,080 --> 00:12:26,360 Speaker 3: updates from a lot of the big European economies, for example, 233 00:12:26,360 --> 00:12:29,079 Speaker 3: Spain and Germany. We've seen their pace of inflation fall 234 00:12:29,160 --> 00:12:32,520 Speaker 3: quite dramatically from their peaks, but the likes of France. 235 00:12:32,640 --> 00:12:34,600 Speaker 3: It's looking a little bit more stable if we look 236 00:12:34,640 --> 00:12:35,800 Speaker 3: back at the past few months. 237 00:12:36,200 --> 00:12:38,160 Speaker 7: Yeah, I think actually the good news is pretty broad 238 00:12:38,160 --> 00:12:41,239 Speaker 7: spread actually this month, so we're expecting pretty big falls 239 00:12:41,320 --> 00:12:44,199 Speaker 7: in all of the big four major Eurozone economies. So 240 00:12:44,880 --> 00:12:47,319 Speaker 7: I don't think there's any one particular to single out, 241 00:12:47,320 --> 00:12:49,000 Speaker 7: but that they're all going to be seeing that benefit 242 00:12:49,320 --> 00:12:50,520 Speaker 7: as energy costs drop off. 243 00:12:51,080 --> 00:12:53,800 Speaker 3: We have had here in the UK, though, a string 244 00:12:53,840 --> 00:12:58,320 Speaker 3: of nasty inflation surprises. How different is the situation that 245 00:12:58,360 --> 00:13:00,640 Speaker 3: the UK is facing to the Euros or is this 246 00:13:01,080 --> 00:13:03,320 Speaker 3: where we'll see you kind of a path diverging in 247 00:13:03,400 --> 00:13:04,160 Speaker 3: terms of inflation. 248 00:13:04,440 --> 00:13:06,640 Speaker 7: There's a couple of things, so in just right now, 249 00:13:06,720 --> 00:13:08,160 Speaker 7: there's a bit of a difference in what's going on 250 00:13:08,200 --> 00:13:11,480 Speaker 7: with food prices. We've seen the inflation rate for that 251 00:13:11,559 --> 00:13:13,880 Speaker 7: drop off quite a lot in the Eurozone, but that 252 00:13:13,920 --> 00:13:16,600 Speaker 7: hasn't happened in the UK for some reason. It's we're 253 00:13:16,600 --> 00:13:20,000 Speaker 7: seeing prices going up still substantially, So that's one surprise. 254 00:13:20,480 --> 00:13:22,960 Speaker 7: But I think more the broader narrative between the UK 255 00:13:23,000 --> 00:13:24,600 Speaker 7: and the Eurzone is the UK is just much hotter, 256 00:13:25,120 --> 00:13:28,480 Speaker 7: the labor markets tighter, pay is rising much faster, and 257 00:13:28,520 --> 00:13:30,520 Speaker 7: it means that the core inflation rate is going to 258 00:13:30,520 --> 00:13:32,520 Speaker 7: stay about percentage point higher than it is in the 259 00:13:32,559 --> 00:13:33,880 Speaker 7: Eurozone through to the end of the year. 260 00:13:34,200 --> 00:13:36,640 Speaker 3: Why is that this labor market is so much tighter 261 00:13:36,679 --> 00:13:37,160 Speaker 3: in the UK. 262 00:13:37,800 --> 00:13:39,880 Speaker 7: It's actually hard, it's hard to judge, but I mean, 263 00:13:39,920 --> 00:13:42,640 Speaker 7: I think that the main reason is just that the 264 00:13:42,679 --> 00:13:46,160 Speaker 7: starting point for the UK economy was better going into 265 00:13:46,160 --> 00:13:50,000 Speaker 7: all this. The energy support has been fairly abundant as well, 266 00:13:50,800 --> 00:13:53,520 Speaker 7: and there's probably a bigger stock of excess savings in 267 00:13:53,520 --> 00:13:56,640 Speaker 7: the UK which has also served as a buffer relative 268 00:13:56,679 --> 00:14:00,360 Speaker 7: to the Eurozone. So I think that's combination of things, 269 00:14:00,920 --> 00:14:04,679 Speaker 7: but particularly it's just the way that the inflation shock 270 00:14:04,760 --> 00:14:07,079 Speaker 7: is combined with this tight labor market to lift inflation, 271 00:14:07,120 --> 00:14:09,880 Speaker 7: which has happened to a greater extent here than the Eurozone. 272 00:14:10,080 --> 00:14:12,080 Speaker 3: When we're thinking more broadly about the state of the 273 00:14:12,120 --> 00:14:15,640 Speaker 3: Euro Area economies, we've had a raft of PMI data recently, 274 00:14:15,679 --> 00:14:19,600 Speaker 3: for example, what sort of things should we be thinking 275 00:14:19,600 --> 00:14:22,800 Speaker 3: about when we're thinking about the broader picture of the 276 00:14:22,840 --> 00:14:24,640 Speaker 3: state of the Eurozone economy, Because of course they're these 277 00:14:24,640 --> 00:14:28,359 Speaker 3: warnings of dire recession last year which have largely been avoided. 278 00:14:28,560 --> 00:14:30,520 Speaker 7: Yeah, so, I mean, if you think about the hard data, 279 00:14:31,120 --> 00:14:33,840 Speaker 7: the economy is running pretty slow, like growth is zero 280 00:14:33,840 --> 00:14:36,560 Speaker 7: point one percent in the Eurozone, and it's looking like 281 00:14:36,600 --> 00:14:37,840 Speaker 7: that it's going to be the case for the rest 282 00:14:37,840 --> 00:14:41,600 Speaker 7: of the year. The business surveys they paint a pretty 283 00:14:41,600 --> 00:14:44,120 Speaker 7: mixed picture. So we see the manufacturing sector appears to 284 00:14:44,120 --> 00:14:47,120 Speaker 7: be falling off a cliff, which is what happens at 285 00:14:47,120 --> 00:14:49,080 Speaker 7: the beginning of recessions, and then it spreads out to 286 00:14:49,240 --> 00:14:53,400 Speaker 7: the services sector. Service is still looking quite buoyant. And 287 00:14:53,480 --> 00:14:55,760 Speaker 7: so what the ECB is going to be looking for 288 00:14:55,880 --> 00:14:58,520 Speaker 7: is some of that weakness in manufacturing transmitting to the 289 00:14:58,560 --> 00:15:01,920 Speaker 7: services sector, because that's what's needed to cool things off, 290 00:15:02,000 --> 00:15:04,840 Speaker 7: to keep the lab market from tightening further, and for 291 00:15:04,920 --> 00:15:07,200 Speaker 7: wage growth to start settling, inflation starts to fall back. 292 00:15:07,280 --> 00:15:09,880 Speaker 7: So it's just a matter of extent. The danger is 293 00:15:09,880 --> 00:15:12,160 Speaker 7: that they have a shoot and the services set to 294 00:15:12,160 --> 00:15:13,160 Speaker 7: start the tank as well. 295 00:15:13,480 --> 00:15:16,560 Speaker 3: Of course, that's the challenge that many central banks are facing. 296 00:15:16,640 --> 00:15:17,760 Speaker 3: You mentioned the ECB. 297 00:15:17,880 --> 00:15:18,080 Speaker 2: There. 298 00:15:18,080 --> 00:15:20,560 Speaker 3: We've been hearing from a host of ECB policy makers 299 00:15:20,640 --> 00:15:23,560 Speaker 3: in recent days, not least the ECB president Christine Lagart, 300 00:15:23,560 --> 00:15:26,120 Speaker 3: who said that they will bring rates to quote sufficiently 301 00:15:26,160 --> 00:15:28,720 Speaker 3: restricted levels and keep them at those levels for as 302 00:15:28,760 --> 00:15:31,600 Speaker 3: long as necessary to return inflation to target. The Bundusbank 303 00:15:31,640 --> 00:15:35,280 Speaker 3: president Yaarquem Nagal saying the course of monetary policy tightening 304 00:15:35,320 --> 00:15:37,800 Speaker 3: has not yet come to an end. But I wanted 305 00:15:37,840 --> 00:15:39,160 Speaker 3: to bring you a little flavor of what the Bank 306 00:15:39,200 --> 00:15:41,920 Speaker 3: of France Governor Fransovio ro de Gallo had to say 307 00:15:41,960 --> 00:15:43,360 Speaker 3: speaking in Paris last week. 308 00:15:43,560 --> 00:15:47,560 Speaker 6: I expect seen from today, said we will be at 309 00:15:47,640 --> 00:15:51,680 Speaker 6: the terminal rate not later than by summer. As you know, 310 00:15:52,200 --> 00:15:58,120 Speaker 6: summer in Europe is a long and beautiful season which 311 00:15:58,160 --> 00:16:03,720 Speaker 6: start in June and in September. In the meantime, we 312 00:16:03,880 --> 00:16:10,440 Speaker 6: have free possible governing councils either for hiking or pausing. 313 00:16:11,920 --> 00:16:15,040 Speaker 3: After France Offeo de Gallo to manage to flag the 314 00:16:15,120 --> 00:16:19,200 Speaker 3: lovely long summer as one gets, particularly in places like France. 315 00:16:19,240 --> 00:16:20,800 Speaker 3: As somebody who lived in Paris for a very long time, 316 00:16:20,840 --> 00:16:22,400 Speaker 3: I kind of test the fact that it does largely 317 00:16:22,440 --> 00:16:26,040 Speaker 3: shut down in August. Look, he was making a point 318 00:16:26,080 --> 00:16:28,320 Speaker 3: that they have quite a few meetings to go before 319 00:16:28,320 --> 00:16:31,640 Speaker 3: they would consider a pause. What are the current expectations 320 00:16:31,640 --> 00:16:33,360 Speaker 3: about where the ECB goes from here? 321 00:16:33,960 --> 00:16:36,560 Speaker 7: So where expects them to keep hiking until July and 322 00:16:36,600 --> 00:16:40,680 Speaker 7: then pause in September. And I think the main reason 323 00:16:40,680 --> 00:16:43,280 Speaker 7: for that is that core inflation, which is the indicator 324 00:16:43,360 --> 00:16:46,200 Speaker 7: they're most focused on, is probably going to go back 325 00:16:46,240 --> 00:16:48,280 Speaker 7: up a bit over the next couple of months, and 326 00:16:48,280 --> 00:16:50,280 Speaker 7: then it will plateau at a high level over the summer, 327 00:16:50,480 --> 00:16:52,400 Speaker 7: which makes it difficult for them to stop. So I 328 00:16:52,440 --> 00:16:55,560 Speaker 7: think that that's got to be the baseline. There's a 329 00:16:55,560 --> 00:16:58,440 Speaker 7: possibility they feel they're compelled to hike again in September, 330 00:16:58,560 --> 00:17:01,400 Speaker 7: taking base to four percent, but we're relatively comfortable that 331 00:17:01,400 --> 00:17:03,160 Speaker 7: they'll stop at some point, relatively soon. 332 00:17:03,280 --> 00:17:05,600 Speaker 3: What is it that's expected to drive core inflation up? 333 00:17:06,119 --> 00:17:08,560 Speaker 7: You know, it's just weights. It's just the change in 334 00:17:08,640 --> 00:17:11,120 Speaker 7: weights used in the basket. It's not actually a good 335 00:17:11,119 --> 00:17:15,040 Speaker 7: measure of underlying inflation. Okay, it's just a peerless statistical quirk, 336 00:17:15,520 --> 00:17:16,840 Speaker 7: and it's just landing at the wrong time. 337 00:17:16,960 --> 00:17:20,199 Speaker 3: We're here first test quirks. Yeah, we're into us, and 338 00:17:20,200 --> 00:17:22,480 Speaker 3: I appreciate you explaining us. Look, if you were talking 339 00:17:22,520 --> 00:17:25,240 Speaker 3: about the ECB, then you know, continuing to hike for 340 00:17:25,240 --> 00:17:27,960 Speaker 3: at least the next couple of meetings. If we see 341 00:17:27,960 --> 00:17:31,240 Speaker 3: the FED pause how difficult or does that make the 342 00:17:31,240 --> 00:17:32,960 Speaker 3: ECB's job more difficult? 343 00:17:33,240 --> 00:17:36,240 Speaker 7: Well, I think it creates a change in the global 344 00:17:36,240 --> 00:17:38,840 Speaker 7: mood music, doesn't it. If the FED stopped, then you're 345 00:17:38,840 --> 00:17:42,680 Speaker 7: out on your own. So regardless of what these economic 346 00:17:42,720 --> 00:17:47,800 Speaker 7: fundamentals justify, there's a psychology around that. So I think 347 00:17:47,840 --> 00:17:50,760 Speaker 7: that does create pressure for it makes it a lot 348 00:17:50,800 --> 00:17:52,560 Speaker 7: easier for the other central banks to stop, and they 349 00:17:52,560 --> 00:17:55,080 Speaker 7: don't have to worry now about being left behind and 350 00:17:55,119 --> 00:17:57,879 Speaker 7: the exchange rate therefore moving in the wrong direction for them. 351 00:17:58,000 --> 00:17:59,480 Speaker 7: So I think it does matter. 352 00:18:00,040 --> 00:18:02,280 Speaker 3: Thinking about this raft of inflation data from across the 353 00:18:02,280 --> 00:18:05,000 Speaker 3: Eurozone due out in the coming days, what are the 354 00:18:05,040 --> 00:18:07,239 Speaker 3: other big data sets that we should be watching out for. 355 00:18:07,320 --> 00:18:10,520 Speaker 3: We're looking at an ECB meeting in mid June. Are 356 00:18:10,560 --> 00:18:12,560 Speaker 3: there other factors that we should be or perhaps key 357 00:18:12,560 --> 00:18:14,680 Speaker 3: phrases we were listening out to from policy makers something 358 00:18:14,760 --> 00:18:15,280 Speaker 3: here them speak. 359 00:18:15,440 --> 00:18:18,000 Speaker 7: I think the other leg that we should be thinking 360 00:18:18,000 --> 00:18:21,199 Speaker 7: about is just what's happening with credit conditions, looking at 361 00:18:21,200 --> 00:18:25,439 Speaker 7: credit supply, looking at surveys of intentions on demand and 362 00:18:25,520 --> 00:18:28,000 Speaker 7: supply for credit. So we'll get a print on that 363 00:18:28,240 --> 00:18:31,280 Speaker 7: just before the September meeting. I think that's the thing 364 00:18:31,280 --> 00:18:32,840 Speaker 7: that needs to judge. We need to try and judge 365 00:18:33,040 --> 00:18:35,879 Speaker 7: how much of an impact much policies having on the economy, 366 00:18:36,160 --> 00:18:38,879 Speaker 7: and you know those drip feeding over the next few months. 367 00:18:39,040 --> 00:18:40,920 Speaker 3: Yeah, And it's because of course the lag effects that 368 00:18:40,960 --> 00:18:43,480 Speaker 3: we talk about so much about how monetary policy is 369 00:18:43,480 --> 00:18:47,479 Speaker 3: implemented as well. Inflation expectations are kind of a different 370 00:18:47,520 --> 00:18:49,560 Speaker 3: factor that we're now talking about a lot more because 371 00:18:49,560 --> 00:18:52,080 Speaker 3: we're looking at inflation being higher for so much longer. 372 00:18:52,080 --> 00:18:54,560 Speaker 3: It's been a big factor in the consideration of the 373 00:18:54,600 --> 00:18:58,719 Speaker 3: psychology in the UK. How do inflation expectations in the 374 00:18:58,760 --> 00:19:02,080 Speaker 3: Eurozone out or look like for the moment when we're 375 00:19:02,080 --> 00:19:03,960 Speaker 3: thinking about consumer and business behavior. 376 00:19:04,320 --> 00:19:06,399 Speaker 7: I think it's actually one of the big uncertainties over 377 00:19:06,440 --> 00:19:09,360 Speaker 7: the coming six months is how inflation expectations are going 378 00:19:09,359 --> 00:19:12,479 Speaker 7: to change as the headline rate drops back down towards 379 00:19:12,520 --> 00:19:15,160 Speaker 7: two to three percent. Because that's happening in the aur Zone, 380 00:19:15,200 --> 00:19:18,480 Speaker 7: it's happening in the UK now. It's one possibility is 381 00:19:18,480 --> 00:19:21,879 Speaker 7: that household immediately adjust their expectations, they stop pushing for 382 00:19:21,960 --> 00:19:24,800 Speaker 7: higher wage growth because they realized inflation is heading back 383 00:19:24,840 --> 00:19:27,760 Speaker 7: to three percent. The other possibility is that they're just 384 00:19:27,840 --> 00:19:30,800 Speaker 7: kind of very sticky about it, and they remember losing 385 00:19:30,800 --> 00:19:33,320 Speaker 7: out last over the past year and then keep fighting, 386 00:19:33,800 --> 00:19:35,879 Speaker 7: and the difference between those two things will determine what 387 00:19:35,880 --> 00:19:37,400 Speaker 7: happens to inflation over the next year. 388 00:19:37,760 --> 00:19:40,800 Speaker 3: Okay, Jamie Rosh, Bloomberg Chief European Economist, Thank you so 389 00:19:40,880 --> 00:19:43,399 Speaker 3: much for joining us. I'm Stephen Carroll in London. You 390 00:19:43,440 --> 00:19:46,320 Speaker 3: can catch us every weekday morning here for Bloomberg Daybreak Europe, 391 00:19:46,359 --> 00:19:49,480 Speaker 3: beginning at six am in London and one am on 392 00:19:49,520 --> 00:19:50,120 Speaker 3: Wall Streets. 393 00:19:50,280 --> 00:19:54,200 Speaker 1: Tom, Thanks Steven, and coming up on Bloomberg Daybreak weekend. 394 00:19:54,520 --> 00:19:57,400 Speaker 1: Never mind the dead ceiling, we take you deep inside 395 00:19:57,400 --> 00:20:02,679 Speaker 1: the mechanics of the Treasury. I'm Busby and this is Bloomberg. 396 00:20:12,640 --> 00:20:16,359 Speaker 4: Broadcasting live from the Bloomberg It a active brokers studio 397 00:20:16,520 --> 00:20:19,440 Speaker 4: in New York. 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This is Bloomberg Daybreak weekend. 403 00:20:43,600 --> 00:20:45,800 Speaker 1: I'm Tom Busby in New York with your global look 404 00:20:45,800 --> 00:20:48,359 Speaker 1: ahead at the top stories for investors in the coming week. 405 00:20:48,520 --> 00:20:51,240 Speaker 1: As the debt ceiling takes over talks on Capitol Hill, 406 00:20:51,400 --> 00:20:54,800 Speaker 1: Let's take you inside the mechanics of the Treasury Department 407 00:20:54,840 --> 00:20:57,560 Speaker 1: payment structure. For more, let's head to our Bloomberg ninety 408 00:20:57,640 --> 00:21:00,880 Speaker 1: nine one newsroom in Washington and Bloomberg Sound On. Co 409 00:21:00,960 --> 00:21:02,159 Speaker 1: host Kaylee. 410 00:21:01,800 --> 00:21:04,320 Speaker 8: Lines, Yeah, Tom, And all the back and forth and 411 00:21:04,480 --> 00:21:07,760 Speaker 8: noise around deal to lift the debt ceiling, there has 412 00:21:07,840 --> 00:21:10,919 Speaker 8: always loomed the X date this day into the future, 413 00:21:10,960 --> 00:21:13,040 Speaker 8: when the Treasury Department could run out of cash to 414 00:21:13,080 --> 00:21:16,359 Speaker 8: pay the bills and default on its obligations. That's something 415 00:21:16,400 --> 00:21:20,120 Speaker 8: that has never happened before, and Treasury Secretary Jenny Ellen 416 00:21:20,160 --> 00:21:22,600 Speaker 8: has warned for weeks now that that moment could come 417 00:21:22,760 --> 00:21:25,960 Speaker 8: as early as June first. She did so again this 418 00:21:26,000 --> 00:21:26,600 Speaker 8: past week. 419 00:21:26,720 --> 00:21:30,440 Speaker 9: It's highly likely that we would run out of resources 420 00:21:30,480 --> 00:21:35,080 Speaker 9: to meet all the government's obligations in early June, and 421 00:21:35,200 --> 00:21:39,680 Speaker 9: possibly as early as June first. We no longer see 422 00:21:40,280 --> 00:21:45,320 Speaker 9: very much likelihood there are resources will enable us to 423 00:21:45,400 --> 00:21:48,440 Speaker 9: get to the middle or end of June. 424 00:21:48,119 --> 00:21:50,200 Speaker 8: But There has also been a lot of questions as 425 00:21:50,200 --> 00:21:53,399 Speaker 8: to how exactly the Treasury gets to this date or 426 00:21:53,480 --> 00:21:57,520 Speaker 8: time frame, including from congressional Republicans. Here was House Majority 427 00:21:57,560 --> 00:22:00,520 Speaker 8: Leader Steve Sclee speaking on Tuesday, see. 428 00:22:00,320 --> 00:22:02,960 Speaker 10: More transparency on how they come to that date. But 429 00:22:03,040 --> 00:22:06,520 Speaker 10: Janet Yellen herself actually left the door open to delaying 430 00:22:06,520 --> 00:22:09,560 Speaker 10: that in her tweets yesterday. The comments that she sent 431 00:22:09,640 --> 00:22:13,720 Speaker 10: out yesterday implied that it's June first or later, giving 432 00:22:13,760 --> 00:22:17,080 Speaker 10: some openness to the idea that June first may. 433 00:22:17,000 --> 00:22:18,280 Speaker 4: Not be the so called X state. 434 00:22:18,400 --> 00:22:20,160 Speaker 10: So I haven't really been able to see a lot 435 00:22:20,160 --> 00:22:23,200 Speaker 10: of transparency, but it looks like they're hedging now and 436 00:22:23,280 --> 00:22:25,560 Speaker 10: opening up the door to move that date back. 437 00:22:25,880 --> 00:22:29,760 Speaker 8: So Treasury Secretary Yellen has tried to explain herself why 438 00:22:29,800 --> 00:22:32,360 Speaker 8: it is so hard to know exactly there's a. 439 00:22:32,320 --> 00:22:37,399 Speaker 9: Lot of uncertainty about government payments and receipts. It's hard 440 00:22:37,440 --> 00:22:41,320 Speaker 9: to be precise about exactly which day we will run 441 00:22:41,359 --> 00:22:43,440 Speaker 9: out of resources. 442 00:22:42,840 --> 00:22:45,080 Speaker 8: So it's hard to be precise, but let's try to 443 00:22:45,119 --> 00:22:46,119 Speaker 8: get some more insight. 444 00:22:46,200 --> 00:22:46,440 Speaker 2: Now. 445 00:22:46,720 --> 00:22:49,399 Speaker 8: Joining us is Victoria dender New. She reports on the 446 00:22:49,440 --> 00:22:53,760 Speaker 8: Treasury Department for Bloomberg News. So Victoria, why is the 447 00:22:53,800 --> 00:22:56,000 Speaker 8: actual xtate, So hard to know. 448 00:22:56,520 --> 00:22:58,880 Speaker 11: Well, it's not like the Treasury has a set put 449 00:22:58,920 --> 00:23:01,119 Speaker 11: of money that it just it's depleted every day as 450 00:23:01,119 --> 00:23:04,000 Speaker 11: it makes payments. It's got money coming in, money going out, 451 00:23:04,240 --> 00:23:06,119 Speaker 11: So what it's trying to do and that you know, 452 00:23:06,160 --> 00:23:08,600 Speaker 11: that's money coming out of the federal agencies or coming 453 00:23:08,600 --> 00:23:11,840 Speaker 11: into the federal agency. So it's hard to know exactly 454 00:23:11,880 --> 00:23:14,320 Speaker 11: at any point in time what the balance is going 455 00:23:14,359 --> 00:23:16,639 Speaker 11: to look like. So what the Treasury is trying to 456 00:23:16,680 --> 00:23:20,320 Speaker 11: do is kind of narrow down the date when it's 457 00:23:20,320 --> 00:23:22,240 Speaker 11: not going to have enough cash to make its payments, 458 00:23:22,240 --> 00:23:25,280 Speaker 11: and to do that is asking agencies to give it 459 00:23:25,320 --> 00:23:28,439 Speaker 11: more and more details on payments that can be, you know, 460 00:23:28,520 --> 00:23:31,240 Speaker 11: anything greater than fifty million, for example lately, so we 461 00:23:31,280 --> 00:23:33,639 Speaker 11: can understand how much money has to go out and 462 00:23:33,680 --> 00:23:36,320 Speaker 11: went precisely, and then it has to kind of make 463 00:23:36,440 --> 00:23:38,359 Speaker 11: estimates about how much money is expected to get in 464 00:23:38,640 --> 00:23:41,200 Speaker 11: so that it can have a greater and greater degree 465 00:23:41,200 --> 00:23:42,760 Speaker 11: of confidence about which. 466 00:23:42,680 --> 00:23:45,560 Speaker 8: Date is the X date. So basically it's just not 467 00:23:45,640 --> 00:23:47,960 Speaker 8: really perfect math. We're working with a lot of estimates. 468 00:23:48,080 --> 00:23:50,000 Speaker 12: Yeah, it's all about confidence intervals. 469 00:23:50,040 --> 00:23:53,640 Speaker 11: So basically the time by which you're not sure you're 470 00:23:53,680 --> 00:23:54,560 Speaker 11: going to make it anymore. 471 00:23:55,000 --> 00:23:58,320 Speaker 8: Well, it's also been suggested, this idea floated even by lawmakers, 472 00:23:58,400 --> 00:24:00,919 Speaker 8: that the Treasury can kind of pull rounds out of hats, 473 00:24:01,040 --> 00:24:04,040 Speaker 8: but they can find extra cash laying around somewhere and 474 00:24:04,119 --> 00:24:06,280 Speaker 8: keep paying the bills. Is that really true? 475 00:24:06,480 --> 00:24:08,239 Speaker 11: Well, in a way, that's what the Treasury has been 476 00:24:08,240 --> 00:24:10,639 Speaker 11: doing with a special accounting measures. Is January when it 477 00:24:10,720 --> 00:24:13,480 Speaker 11: hit the debt ceiling, So it's been using all these 478 00:24:13,480 --> 00:24:16,040 Speaker 11: like accounting gimmicks to be able to issue debt and 479 00:24:16,080 --> 00:24:18,600 Speaker 11: continue making its payments even though it hit the limit. 480 00:24:18,720 --> 00:24:21,520 Speaker 11: So it really does seem like it can go any further. 481 00:24:21,640 --> 00:24:24,960 Speaker 11: And that's that's why the coming week is probably the 482 00:24:25,000 --> 00:24:27,840 Speaker 11: week when all these measures are no longer sufficient. 483 00:24:28,200 --> 00:24:30,840 Speaker 8: Whenever the X state is, whether it is this coming 484 00:24:30,880 --> 00:24:33,480 Speaker 8: week or you know, a couple of days after, what 485 00:24:33,680 --> 00:24:36,280 Speaker 8: literally happens after the X state, I know we've never 486 00:24:36,359 --> 00:24:38,919 Speaker 8: gotten there before, so it's hard to know, but surely 487 00:24:38,960 --> 00:24:41,280 Speaker 8: the Treasury has to have some contingency plans. 488 00:24:41,440 --> 00:24:42,520 Speaker 12: Yeah, I mean that's the good question. 489 00:24:42,560 --> 00:24:45,040 Speaker 11: I guess what the x sdate is is the date 490 00:24:45,160 --> 00:24:47,720 Speaker 11: of which Treasure just doesn't have enough cash in hand 491 00:24:47,760 --> 00:24:51,240 Speaker 11: to meet all its obligations, so be they debt, payments 492 00:24:51,359 --> 00:24:55,640 Speaker 11: or obligations at home, so salaries, social security, veterans benefits. 493 00:24:55,680 --> 00:24:58,000 Speaker 11: So I guess the first thing is that they would 494 00:24:58,080 --> 00:25:01,200 Speaker 11: have to make some really really difficult decisions about who 495 00:25:01,240 --> 00:25:03,280 Speaker 11: they pay, who they don't pay, and how all that 496 00:25:03,320 --> 00:25:04,200 Speaker 11: works well. 497 00:25:04,240 --> 00:25:06,360 Speaker 8: And as we talk about who they pay and don't pay, 498 00:25:06,359 --> 00:25:10,120 Speaker 8: it comes down to this idea of prioritization, right. Treasury 499 00:25:10,160 --> 00:25:14,360 Speaker 8: Secretary Janny Ellen has previously called prioritization just a default 500 00:25:14,359 --> 00:25:17,520 Speaker 8: by another name, But it's basically the idea that the 501 00:25:17,520 --> 00:25:20,520 Speaker 8: Treasury could keep paying some of its bills like payments 502 00:25:20,560 --> 00:25:23,240 Speaker 8: to bond holders and avoid an actual default and then 503 00:25:23,280 --> 00:25:26,439 Speaker 8: just put off paying others. But is that legal? Can 504 00:25:26,480 --> 00:25:28,640 Speaker 8: the Treasury actually do that in practice? 505 00:25:28,880 --> 00:25:31,800 Speaker 11: Listen, I think any situation where the government decides to 506 00:25:31,840 --> 00:25:34,720 Speaker 11: honor some of its obligations and not others, it's going 507 00:25:34,800 --> 00:25:37,639 Speaker 11: to be treaty legally. But it's just a question of 508 00:25:37,680 --> 00:25:40,240 Speaker 11: what's the least bad outcome. And as you said, the 509 00:25:40,280 --> 00:25:43,000 Speaker 11: Secretary has said that this is a default by another name. 510 00:25:43,080 --> 00:25:45,760 Speaker 11: But the only kind of contingency plans we have to 511 00:25:45,760 --> 00:25:48,000 Speaker 11: go by at this point is contingency planning from twenty 512 00:25:48,040 --> 00:25:51,880 Speaker 11: eleven and twenty thirteen, where what was planned was that 513 00:25:51,920 --> 00:25:55,119 Speaker 11: the government would keep servicing its dead and potentially delay 514 00:25:55,160 --> 00:25:58,199 Speaker 11: its domestic obligation. So it does seem like it's the 515 00:25:58,320 --> 00:26:02,480 Speaker 11: least kind of financially disruptive outcome, even though you know, 516 00:26:02,560 --> 00:26:04,439 Speaker 11: it's never happened before, so we don't really know how 517 00:26:04,520 --> 00:26:06,119 Speaker 11: markets are going to perceive that as well. 518 00:26:06,200 --> 00:26:08,359 Speaker 8: Yeah, and I thought it was really interesting this past 519 00:26:08,400 --> 00:26:11,520 Speaker 8: week when Fitch put out its warning talking about how 520 00:26:11,640 --> 00:26:14,359 Speaker 8: the triple A credit rating of the United States is 521 00:26:14,560 --> 00:26:17,879 Speaker 8: potentially at risk. They placed it on ratings Watch negative, 522 00:26:17,880 --> 00:26:20,920 Speaker 8: and they specifically in that release talked about the idea 523 00:26:20,960 --> 00:26:24,040 Speaker 8: of prioritization, talked about some of the other alternatives that 524 00:26:24,080 --> 00:26:27,639 Speaker 8: have been floated, like invoking the fourteenth Amendment or minting 525 00:26:27,680 --> 00:26:30,359 Speaker 8: a trillion dollar coin, saying that that would not be 526 00:26:30,440 --> 00:26:33,360 Speaker 8: consistent with a triple A credit rating and could ultimately 527 00:26:33,359 --> 00:26:35,280 Speaker 8: still result in a downgrade. 528 00:26:34,760 --> 00:26:37,800 Speaker 11: Exactly because what all these you know, measures mean by 529 00:26:37,920 --> 00:26:40,639 Speaker 11: another name, is that the US cannot meet all its obligations, 530 00:26:40,680 --> 00:26:43,080 Speaker 11: So these are all ways around it, and a nation 531 00:26:43,160 --> 00:26:46,399 Speaker 11: that can meet its financial obligations, it's not consistent with 532 00:26:46,400 --> 00:26:47,200 Speaker 11: a triple A rating. 533 00:26:47,400 --> 00:26:49,760 Speaker 8: Does treasure Our Secretary Yellen ever comment on the idea 534 00:26:49,760 --> 00:26:51,040 Speaker 8: of a trillion dollar coin. 535 00:26:51,480 --> 00:26:54,640 Speaker 11: No, Generally, she's like her predecessors, this is just incredibly 536 00:26:54,680 --> 00:26:57,480 Speaker 11: tight lipped about any alternative. She always says that, you know, 537 00:26:57,880 --> 00:27:00,600 Speaker 11: the only way to ensure that the US remains kind 538 00:27:00,600 --> 00:27:03,040 Speaker 11: of a reliable credit worthy country is to raise a 539 00:27:03,040 --> 00:27:07,480 Speaker 11: debt ceiling. So she's been extremely reluctant to discuss any alternative. 540 00:27:07,720 --> 00:27:10,240 Speaker 8: And of course, as she kind of stays on message, 541 00:27:10,280 --> 00:27:13,359 Speaker 8: she's not the only administration official that does. How closely 542 00:27:13,400 --> 00:27:16,480 Speaker 8: aligned is the Treasury Department with the White House on 543 00:27:16,520 --> 00:27:20,040 Speaker 8: this issue? What is there consistency of communication, if you will, 544 00:27:20,359 --> 00:27:21,080 Speaker 8: I think they're. 545 00:27:20,920 --> 00:27:22,640 Speaker 12: Like completely aligned on this. 546 00:27:22,720 --> 00:27:26,040 Speaker 11: I mean, the White House is the one negotiating with 547 00:27:26,080 --> 00:27:28,560 Speaker 11: the Republicans on this, but the Treasury is more kind 548 00:27:28,560 --> 00:27:31,359 Speaker 11: of the gatekeeper of the cash, if we could say that. 549 00:27:31,480 --> 00:27:33,679 Speaker 11: So I think the Treasury's role here is just to 550 00:27:33,800 --> 00:27:36,840 Speaker 11: stress how disruptive it would be if the dead ceiling 551 00:27:36,920 --> 00:27:38,760 Speaker 11: was not raised in the US had to defauld and 552 00:27:38,800 --> 00:27:41,200 Speaker 11: also just to keep kind of like getting the data 553 00:27:41,240 --> 00:27:43,560 Speaker 11: and providing the White House with like the daily state 554 00:27:43,640 --> 00:27:45,960 Speaker 11: of the cash flows of the of the US, so 555 00:27:46,000 --> 00:27:48,960 Speaker 11: that they can know how to proceed in the negotiations well. 556 00:27:49,000 --> 00:27:51,160 Speaker 8: And to come back to what we heard from Treasury 557 00:27:51,160 --> 00:27:53,400 Speaker 8: Secretary Yllen at the top of this when she said 558 00:27:53,440 --> 00:27:55,960 Speaker 8: that she doesn't see much likelihood that the resources will 559 00:27:56,040 --> 00:27:58,160 Speaker 8: will stretch to the middle or end of June. Can 560 00:27:58,160 --> 00:28:00,760 Speaker 8: we also touch on why the date of June fifteenth 561 00:28:01,280 --> 00:28:03,680 Speaker 8: is important because in theory, that would bring a big 562 00:28:03,720 --> 00:28:05,240 Speaker 8: influx into the treasury. 563 00:28:04,920 --> 00:28:08,399 Speaker 11: Right exactly, So, there is an expectation that there are 564 00:28:08,520 --> 00:28:10,480 Speaker 11: corporate tax receipts that are going to come in on 565 00:28:10,520 --> 00:28:12,840 Speaker 11: the on June fifteenth, and that would help kind of 566 00:28:12,840 --> 00:28:16,359 Speaker 11: tie the treasury over for a while longer. But I 567 00:28:16,400 --> 00:28:19,480 Speaker 11: think all information both from you know, the Treasury, Janet 568 00:28:19,520 --> 00:28:21,800 Speaker 11: Yellen's warnings to Congress, her letters, but also from the 569 00:28:21,800 --> 00:28:24,719 Speaker 11: private sector as well, points to a date much earlier 570 00:28:24,720 --> 00:28:26,600 Speaker 11: than that, in the very early days of June. 571 00:28:26,680 --> 00:28:29,200 Speaker 12: So it doesn't seem like there's enough cash on hand 572 00:28:29,200 --> 00:28:30,280 Speaker 12: to make it to the fifteenth. 573 00:28:30,600 --> 00:28:32,960 Speaker 8: Yeah, it does seem like Wall Street strategists too, have 574 00:28:33,000 --> 00:28:36,320 Speaker 8: coalesced around the idea of maybe June eighth or June seventh. 575 00:28:36,400 --> 00:28:39,000 Speaker 8: I think think of America was a June one. Literally 576 00:28:39,040 --> 00:28:42,040 Speaker 8: the date at the beginning that Janet Yellen had floated 577 00:28:42,320 --> 00:28:45,520 Speaker 8: as the as the earliest possible. So as we talk 578 00:28:45,640 --> 00:28:48,640 Speaker 8: a little bit more about Treasury's contingency planning, you mentioned 579 00:28:48,680 --> 00:28:51,080 Speaker 8: how you know they have what they had back in 580 00:28:51,120 --> 00:28:53,480 Speaker 8: twenty eleven, but are there ways in which this moment 581 00:28:53,560 --> 00:28:56,320 Speaker 8: now in twenty twenty three would be would be differ 582 00:28:56,840 --> 00:28:58,360 Speaker 8: differing than that, Different than that? 583 00:28:58,520 --> 00:29:00,600 Speaker 11: I mean, it feels like we're definitely getting closer to 584 00:29:00,640 --> 00:29:01,480 Speaker 11: it than ever before. 585 00:29:01,600 --> 00:29:02,400 Speaker 12: So that's one thing. 586 00:29:02,440 --> 00:29:05,840 Speaker 11: It feels like Congress is maybe a bit more willing 587 00:29:05,880 --> 00:29:10,000 Speaker 11: to stretch it to the end of the negotiation. It Also, 588 00:29:10,040 --> 00:29:12,720 Speaker 11: the US debt is a lot larger than before, so 589 00:29:13,040 --> 00:29:14,760 Speaker 11: you know, when we're talking about interest payments, when we're 590 00:29:14,760 --> 00:29:17,080 Speaker 11: talking about you know, what has to be serviced, that's 591 00:29:17,200 --> 00:29:20,080 Speaker 11: a lot more than it was eleven or twelve years ago. 592 00:29:20,320 --> 00:29:21,840 Speaker 8: Yeah, I mean, we all have to keep in mind 593 00:29:21,880 --> 00:29:24,680 Speaker 8: we're talking about raising the debt ceiling above more than 594 00:29:24,720 --> 00:29:27,920 Speaker 8: thirty one trillion dollars. So this is a massive debt 595 00:29:27,960 --> 00:29:30,120 Speaker 8: pile we are talking about here, and definitely a very 596 00:29:30,120 --> 00:29:33,600 Speaker 8: complicated puzzle for Congress, the White House to deal with, 597 00:29:33,640 --> 00:29:36,200 Speaker 8: but the Treasury Department itself, because as Victoria was just 598 00:29:36,240 --> 00:29:38,040 Speaker 8: alluding to, they're the ones that have the cash in 599 00:29:38,080 --> 00:29:40,640 Speaker 8: the bags that really have to deal with all of 600 00:29:40,680 --> 00:29:44,120 Speaker 8: this as we have that X state still looming over 601 00:29:44,240 --> 00:29:46,920 Speaker 8: all our heads, trying to get this done before we 602 00:29:47,000 --> 00:29:48,920 Speaker 8: actually get to that date. Thank you so much to 603 00:29:49,000 --> 00:29:53,080 Speaker 8: Victoria Dender, new Treasury reporter for Bloomberg News. Tommy, we'll 604 00:29:53,080 --> 00:29:53,760 Speaker 8: send it back to you. 605 00:29:53,920 --> 00:29:56,760 Speaker 1: Thank you, Kaylee. That was Bloomberg Sound On co host 606 00:29:56,880 --> 00:30:00,000 Speaker 1: Kaylee Lines reporting from our Bloomberg ninety nine one news 607 00:30:00,000 --> 00:30:02,760 Speaker 1: trusum in Washington, and you can hear sound on weekdays 608 00:30:02,840 --> 00:30:06,000 Speaker 1: one to three pm on Bloomberg Radio. Coming up here 609 00:30:06,040 --> 00:30:08,320 Speaker 1: on Bloomberg day Break Weekend, we look ahead at the 610 00:30:08,320 --> 00:30:12,120 Speaker 1: inflation data that's coming out of China. I'm Tom Busby, 611 00:30:12,200 --> 00:30:19,520 Speaker 1: and this is Bloomberg. This is Bloomberg day Break Weekend, 612 00:30:19,560 --> 00:30:22,160 Speaker 1: our global look ahead at the top stories for investors 613 00:30:22,200 --> 00:30:24,800 Speaker 1: in the coming week. I'm Tom Busby in New York. 614 00:30:25,200 --> 00:30:28,800 Speaker 1: We're awaiting China inflation data this week and its impact 615 00:30:28,840 --> 00:30:29,880 Speaker 1: on the global economy. 616 00:30:30,040 --> 00:30:30,480 Speaker 2: For more. 617 00:30:30,600 --> 00:30:33,280 Speaker 1: Let's go to Hong Kong and Bloomberg Daybreak Asia host 618 00:30:33,320 --> 00:30:36,120 Speaker 1: Brian Curtis at his colleague Doug Krisner. 619 00:30:36,560 --> 00:30:40,560 Speaker 2: Tom Investors are losing faith in China as a recovery story, 620 00:30:40,600 --> 00:30:42,800 Speaker 2: and it's reflected in many data points. 621 00:30:42,840 --> 00:30:46,200 Speaker 13: One, the RMB has weakened well past seven against the 622 00:30:46,280 --> 00:30:50,240 Speaker 13: US dollar. China's equity benchmark, the CSI three hundred has 623 00:30:50,320 --> 00:30:53,240 Speaker 13: given up its gains this year and it's now negative. 624 00:30:53,920 --> 00:30:57,000 Speaker 2: Debt is weighing on the economy. Growth is under pressure, 625 00:30:57,360 --> 00:31:00,680 Speaker 2: COVID cases are rising due to a new sub variant, 626 00:31:01,080 --> 00:31:06,320 Speaker 2: and geopolitics is stunting some foreign investment. So against that backdrop, 627 00:31:06,440 --> 00:31:10,120 Speaker 2: what might we expect in the coming week's pmis joining 628 00:31:10,200 --> 00:31:13,160 Speaker 2: us now to discuss this is Jill Desis, Bloomberg's China 629 00:31:13,240 --> 00:31:16,880 Speaker 2: Economy and Government editor. So Jill, thanks very much for this. 630 00:31:16,960 --> 00:31:20,280 Speaker 2: So the official manufacturing PMI is projected to be at 631 00:31:20,280 --> 00:31:23,840 Speaker 2: forty nine point two, and that would be unchanged from April. 632 00:31:24,200 --> 00:31:26,760 Speaker 2: But a lot has happened here, particularly over the past 633 00:31:26,840 --> 00:31:29,440 Speaker 2: couple of weeks. Is there scope here for perhaps a 634 00:31:29,960 --> 00:31:30,960 Speaker 2: downward surprise? 635 00:31:31,400 --> 00:31:31,640 Speaker 4: Yes? 636 00:31:31,920 --> 00:31:35,200 Speaker 14: Thanks, I think it's possible. Now, Remember we really only 637 00:31:35,320 --> 00:31:39,160 Speaker 14: have this point a few those estimates that are coming 638 00:31:39,200 --> 00:31:41,640 Speaker 14: in for those PMI numbers. I think what everybody was 639 00:31:41,920 --> 00:31:45,120 Speaker 14: ultimately waiting to look out for is whether there's any 640 00:31:45,200 --> 00:31:49,480 Speaker 14: way that China's manufacturing sector can escape this confidence trap 641 00:31:49,600 --> 00:31:52,360 Speaker 14: that we seem to be stuck in. We know that 642 00:31:52,720 --> 00:31:56,920 Speaker 14: the recovery so far has been really driven by consumer spending, 643 00:31:57,080 --> 00:32:00,360 Speaker 14: but what we haven't seen kick in is demand for 644 00:32:00,760 --> 00:32:03,560 Speaker 14: products that these manufacturers are making, is for households to 645 00:32:03,680 --> 00:32:07,320 Speaker 14: really kind of come out of this post pandemic period 646 00:32:07,320 --> 00:32:09,920 Speaker 14: really competent about spending on more than just you know, 647 00:32:10,000 --> 00:32:13,200 Speaker 14: movie tickets and restaurants and things like that. But as 648 00:32:13,200 --> 00:32:15,840 Speaker 14: at this point, we aren't seeing that right now, and 649 00:32:15,920 --> 00:32:18,280 Speaker 14: so as we get closer to the release of those 650 00:32:18,320 --> 00:32:21,160 Speaker 14: PMI surveys, I don't really think that we've seen a 651 00:32:21,200 --> 00:32:24,120 Speaker 14: whole lot of indicators to tell us that there's going 652 00:32:24,160 --> 00:32:25,320 Speaker 14: to be a giant pickup there. 653 00:32:25,960 --> 00:32:28,880 Speaker 13: Is it the concern about US China relations that is 654 00:32:28,920 --> 00:32:32,920 Speaker 13: holding back sentiment? Is it uncertainty about the regulatory framework? 655 00:32:32,960 --> 00:32:34,680 Speaker 13: Do we have a sense of what's happening? 656 00:32:34,880 --> 00:32:37,400 Speaker 14: I think it's kind of everything now one it comes 657 00:32:37,440 --> 00:32:41,280 Speaker 14: to US China relations. There's certainly some issues there that 658 00:32:41,320 --> 00:32:44,520 Speaker 14: I think are feeding into maybe more of concerns that 659 00:32:44,600 --> 00:32:49,200 Speaker 14: Beijing maybe having about how they're plotting out this year. 660 00:32:49,240 --> 00:32:52,239 Speaker 14: We've obviously seen Shei Jinping kind of come out and 661 00:32:52,280 --> 00:32:56,120 Speaker 14: try to mount this big diplomatic push, especially with Western 662 00:32:56,200 --> 00:32:59,360 Speaker 14: nations in Europe, to try to counter you know, what's 663 00:32:59,360 --> 00:33:01,160 Speaker 14: happening in the US with all of these sanctions that 664 00:33:01,240 --> 00:33:04,320 Speaker 14: certainly I think is part of the economic pressure that 665 00:33:04,360 --> 00:33:07,200 Speaker 14: they're really worried about. But aside from that, I think 666 00:33:07,240 --> 00:33:10,600 Speaker 14: that you know, China just spent three years in this 667 00:33:10,720 --> 00:33:15,600 Speaker 14: COVID zero landscape with the stop start approach to lockdowns 668 00:33:15,640 --> 00:33:17,920 Speaker 14: and kind of you know, coming out of everything, we 669 00:33:18,080 --> 00:33:20,959 Speaker 14: saw at the same time a lot of pressures downward, 670 00:33:20,960 --> 00:33:23,680 Speaker 14: pressures on the property market, a lot of regulatory reform 671 00:33:23,800 --> 00:33:26,320 Speaker 14: that really shift things up, and I think, you know, 672 00:33:26,440 --> 00:33:29,320 Speaker 14: cause a lot of concern among people, and so we're 673 00:33:29,360 --> 00:33:31,600 Speaker 14: still a bit trapped in that cycle as we move 674 00:33:31,640 --> 00:33:32,520 Speaker 14: forward into this year. 675 00:33:32,640 --> 00:33:36,040 Speaker 2: You mentioned domestic consumption, and when we look at the imports, 676 00:33:36,400 --> 00:33:40,960 Speaker 2: that data was quite surprisingly weak. I'm wondering also about 677 00:33:41,000 --> 00:33:44,480 Speaker 2: whether or not weakening external demand is a big part 678 00:33:44,480 --> 00:33:45,360 Speaker 2: of the story as well. 679 00:33:45,480 --> 00:33:49,240 Speaker 14: Yes, I think so those import numbers in particular, I 680 00:33:49,240 --> 00:33:51,960 Speaker 14: think we're you know, concerning, but also export growth has 681 00:33:52,040 --> 00:33:54,480 Speaker 14: been slower than we would have liked. Right, So, when 682 00:33:54,520 --> 00:33:57,600 Speaker 14: that trade data was released in April, we saw that 683 00:33:57,960 --> 00:34:01,640 Speaker 14: overseas shipments expanded out eight point five percent or so 684 00:34:01,760 --> 00:34:05,440 Speaker 14: from a year ago, remember again comparing to an absolutely 685 00:34:05,880 --> 00:34:08,600 Speaker 14: dismal April period in twenty twenty two when Shanghai was 686 00:34:08,800 --> 00:34:10,960 Speaker 14: it was a lockdown, and so there were various reasons 687 00:34:10,960 --> 00:34:14,600 Speaker 14: why ports were startled, for logistical reasons. But what that 688 00:34:14,680 --> 00:34:18,319 Speaker 14: was ultimately telling us is that growth in April i'm 689 00:34:18,360 --> 00:34:20,680 Speaker 14: slowing down from March for exports, is that, yes, there's 690 00:34:20,719 --> 00:34:24,560 Speaker 14: probably some concern that overseas demand is lessening up as well, 691 00:34:24,600 --> 00:34:26,520 Speaker 14: so it's really hitting China from all sides here. 692 00:34:26,800 --> 00:34:29,480 Speaker 2: Jill, thanks so much for your insights on China. Jill 693 00:34:29,520 --> 00:34:33,640 Speaker 2: desis there Bloomberg's China Economy and Government Editor. I'm Brian 694 00:34:33,680 --> 00:34:36,440 Speaker 2: Curtis in Hong Kong along with Doug Christner. You can 695 00:34:36,480 --> 00:34:39,640 Speaker 2: catch us every weekday for Bloomberg day Break Asia, beginning 696 00:34:39,640 --> 00:34:42,560 Speaker 2: at six am in Hong Kong and six pm on 697 00:34:42,600 --> 00:34:43,800 Speaker 2: Wall Street. Tom. 698 00:34:44,280 --> 00:34:46,680 Speaker 1: Thanks Brian and Doug. And that does it for this 699 00:34:46,840 --> 00:34:49,760 Speaker 1: edition of Bloomberg day Break Weekend. Join us again Monday 700 00:34:49,800 --> 00:34:52,040 Speaker 1: morning at five am Wall Street time for the latest 701 00:34:52,040 --> 00:34:55,040 Speaker 1: on markets overseas and the news you need to start 702 00:34:55,080 --> 00:34:58,640 Speaker 1: your day. I'm Tom Buzzby. Stay with US. Top stories 703 00:34:58,640 --> 00:35:01,120 Speaker 1: and global business headlines are bring up right now