1
00:00:02,400 --> 00:00:10,240
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

2
00:00:10,320 --> 00:00:14,120
Speaker 1: Daybreak europ podcast, available every morning on Apple, Spotify or

3
00:00:14,200 --> 00:00:17,720
Speaker 1: wherever you listen. It's Thursday, the nineteenth of December in London.

4
00:00:17,840 --> 00:00:21,960
Speaker 1: I'm Stephen Carroll coming up today. Stocks drop as Federal

5
00:00:22,000 --> 00:00:25,520
Speaker 1: Reserve policymakers signal they may only cut rates twice in

6
00:00:25,600 --> 00:00:28,680
Speaker 1: twenty twenty five. The Bank of England looks set to

7
00:00:28,720 --> 00:00:31,920
Speaker 1: keep rates on hold as the specter of stagflation looms

8
00:00:31,920 --> 00:00:35,720
Speaker 1: in the UK. Plus, the British government considers sending troops

9
00:00:35,760 --> 00:00:38,440
Speaker 1: to Ukraine for the first time to help train its

10
00:00:38,640 --> 00:00:42,479
Speaker 1: armed forces as warnings grow that Europe could be sleepwalking

11
00:00:42,520 --> 00:00:45,519
Speaker 1: into war with Russia. Let's start with a roundup of

12
00:00:45,560 --> 00:00:49,880
Speaker 1: our top stories. Federal Reserve officials have scaled back expectations

13
00:00:49,880 --> 00:00:53,360
Speaker 1: for interest rate cuts in twenty twenty five, sending their

14
00:00:53,400 --> 00:00:57,640
Speaker 1: strongest signal yet that inflation has not been defeated. Officials

15
00:00:57,680 --> 00:01:00,920
Speaker 1: have now missed their two percent target for nearly four years.

16
00:01:01,240 --> 00:01:04,680
Speaker 1: Speaking after the central bankerdinced a third straight interest rate

17
00:01:04,720 --> 00:01:07,840
Speaker 1: cut for twenty twenty four, charge your own Pal had

18
00:01:07,880 --> 00:01:09,000
Speaker 1: this to say on the matter.

19
00:01:09,440 --> 00:01:12,600
Speaker 2: To cut further after this point, I would say this way.

20
00:01:12,640 --> 00:01:15,560
Speaker 2: We've reduced our policy rate now by one hundred basis points.

21
00:01:15,640 --> 00:01:18,920
Speaker 2: We're significantly closer to neutral at four point three percent

22
00:01:19,080 --> 00:01:22,399
Speaker 2: and change. We believe policy is still meaningfully restrictive. But

23
00:01:22,480 --> 00:01:24,679
Speaker 2: as for additional cuts, we're going to be looking for

24
00:01:24,760 --> 00:01:28,080
Speaker 2: further progress on inflation as well as continued strength in

25
00:01:28,120 --> 00:01:29,920
Speaker 2: the labor market. And as long as the economy and

26
00:01:29,959 --> 00:01:33,280
Speaker 2: the labor market are solid, we can be cautious about

27
00:01:34,080 --> 00:01:36,679
Speaker 2: as we consider further cuts. And all of that is

28
00:01:36,720 --> 00:01:40,080
Speaker 2: reflected to your question in the December sep which shows

29
00:01:40,080 --> 00:01:42,600
Speaker 2: a media and forecast of down two cuts next year

30
00:01:42,600 --> 00:01:43,959
Speaker 2: compared to four in September.

31
00:01:44,840 --> 00:01:47,800
Speaker 1: The stronger focus on inflation from ple on the FOMC

32
00:01:48,000 --> 00:01:52,520
Speaker 1: is a significance shift in strategy from September, when officials

33
00:01:52,520 --> 00:01:56,000
Speaker 1: saw labor market softening as the greater risk. Despite the

34
00:01:56,160 --> 00:01:59,160
Speaker 1: eleven to one vote to cut rates by twenty five

35
00:01:59,200 --> 00:02:02,800
Speaker 1: basis points on Wednesday, Powell described it as a close call.

36
00:02:03,160 --> 00:02:06,720
Speaker 1: Cleveland Fed President Beth Hammock voted against the action, preferring

37
00:02:06,960 --> 00:02:10,920
Speaker 1: to hold rates steady now. The Fed's guidance pushed stocks

38
00:02:11,080 --> 00:02:14,400
Speaker 1: sharply lower and sent treasury yields soaring. The s and

39
00:02:14,440 --> 00:02:18,120
Speaker 1: P five hundred fell below the six thousand point mark,

40
00:02:18,200 --> 00:02:21,000
Speaker 1: suffering its worst session since August. The last time the

41
00:02:21,000 --> 00:02:23,799
Speaker 1: index saw losses of a similar magnitude and a regular

42
00:02:23,800 --> 00:02:27,000
Speaker 1: Fed decision day was back in two thousand and one. Meanwhile,

43
00:02:27,040 --> 00:02:30,160
Speaker 1: the two year treasury yields surged ten basis points to

44
00:02:30,240 --> 00:02:33,520
Speaker 1: four point three five percent, is holding around that level today.

45
00:02:33,560 --> 00:02:36,960
Speaker 1: The ten year yield rose to a level last scene

46
00:02:37,280 --> 00:02:41,720
Speaker 1: in May. Bloomberg's Dollar index jumped to its highest sense

47
00:02:41,880 --> 00:02:46,000
Speaker 1: November twenty twenty two. The Bank of Japan has held

48
00:02:46,040 --> 00:02:49,360
Speaker 1: right steady, with just one of nine policymakers voting for

49
00:02:49,400 --> 00:02:51,560
Speaker 1: a hike. That was the outcome predicted by just over

50
00:02:51,600 --> 00:02:55,520
Speaker 1: half of economists surveyed by Bloomberg. Jasper Cole, expert director

51
00:02:55,560 --> 00:02:58,360
Speaker 1: at Monex Groups, as the Japanese center Bank is navigating

52
00:02:58,400 --> 00:03:01,480
Speaker 1: difficult circumstances as expected.

53
00:03:01,600 --> 00:03:04,920
Speaker 3: Yes, but I think that we're starting to walk a

54
00:03:05,200 --> 00:03:08,760
Speaker 3: fine line with the Bank of Japan running greater risk

55
00:03:08,880 --> 00:03:11,840
Speaker 3: now of doing too little too late. You know, the

56
00:03:11,919 --> 00:03:14,200
Speaker 3: Bank of Japan is very clear that they want to

57
00:03:14,280 --> 00:03:20,160
Speaker 3: normalize monetary policy, they want to normalize Japanese debt markets fine,

58
00:03:20,240 --> 00:03:22,400
Speaker 3: but they also tell us that they need to see

59
00:03:22,560 --> 00:03:24,960
Speaker 3: evidence that the economy remains on track.

60
00:03:26,520 --> 00:03:29,800
Speaker 1: That was Jasper Cole from Monach's group. Naoki Tamura is

61
00:03:29,800 --> 00:03:32,600
Speaker 1: the only rate setter voting for a hike of twenty

62
00:03:32,600 --> 00:03:36,640
Speaker 1: five basis points to zero point five percent, citing increasing

63
00:03:36,760 --> 00:03:41,640
Speaker 1: upside risks to inflation the past one fifty five against

64
00:03:41,680 --> 00:03:45,400
Speaker 1: the dollar. After the decision, the Bank of England's expects

65
00:03:45,440 --> 00:03:47,840
Speaker 1: to hold interest rates today and one of only gradual

66
00:03:47,920 --> 00:03:51,120
Speaker 1: cuts in twenty twenty five. That's my concerns over the

67
00:03:51,160 --> 00:03:54,480
Speaker 1: risk of stagflation. Andrew Bailey and his colleagues will likely

68
00:03:54,480 --> 00:03:57,640
Speaker 1: strike a cautious tone, citing risks from a potential global

69
00:03:57,720 --> 00:04:00,440
Speaker 1: trade war as well as uncertainty over the impact of

70
00:04:00,480 --> 00:04:03,880
Speaker 1: the October budget, but our chief UK economist Dan Hanson

71
00:04:03,920 --> 00:04:07,240
Speaker 1: says there's still scope for policymakers to lower borrowing costs

72
00:04:07,240 --> 00:04:08,320
Speaker 1: in twenty twenty five.

73
00:04:09,040 --> 00:04:11,520
Speaker 4: I think there's probably more room for the Bank of

74
00:04:11,520 --> 00:04:14,240
Speaker 4: England to cut interest rates next year, so we think

75
00:04:15,560 --> 00:04:18,400
Speaker 4: they'll get down to three point seventy five percent. So

76
00:04:18,480 --> 00:04:21,080
Speaker 4: that's one hundred basis points of cuts, which is obviously

77
00:04:21,120 --> 00:04:22,880
Speaker 4: a lot more than the market has at the moment.

78
00:04:22,960 --> 00:04:25,239
Speaker 4: The market's got about sixty I think what that comes

79
00:04:25,279 --> 00:04:28,560
Speaker 4: down to really is your view about this idea of

80
00:04:28,560 --> 00:04:31,760
Speaker 4: the neutral rate and how what the rate that neither

81
00:04:31,920 --> 00:04:37,279
Speaker 4: speeds up nor slows down the economy.

82
00:04:35,760 --> 00:04:39,800
Speaker 1: Bloomberg, Dan Hansen. There the BOE cut rates in August

83
00:04:39,880 --> 00:04:43,000
Speaker 1: and in November, and Andre Bailey signals earlier this month

84
00:04:43,040 --> 00:04:46,279
Speaker 1: that the once a quarter pace was likely to continue. However,

85
00:04:46,360 --> 00:04:49,960
Speaker 1: traders have scaled back bets in recent days after wages

86
00:04:50,080 --> 00:04:53,279
Speaker 1: rows by more than forecast and services inflation stuck at

87
00:04:53,320 --> 00:04:58,239
Speaker 1: elevated levels. Errors made by the UK's national statistics body

88
00:04:58,240 --> 00:05:00,880
Speaker 1: are going to cast employers an extra three hundred and

89
00:05:00,920 --> 00:05:04,840
Speaker 1: sixty eight million pounds. Britain's minimum wage is rising fourteen

90
00:05:04,960 --> 00:05:07,400
Speaker 1: pence an hour due to a change in the Office

91
00:05:07,440 --> 00:05:12,719
Speaker 1: of National Statistics methodology. To Bloomberg Exchange, Wilcock has the story, the.

92
00:05:12,600 --> 00:05:16,080
Speaker 5: Devil seems to be in the data. The ONS says

93
00:05:16,160 --> 00:05:20,400
Speaker 5: their median salary calculations needed rebalancing. They didn't include enough

94
00:05:20,480 --> 00:05:23,320
Speaker 5: high earners in the survey, but that has had a

95
00:05:23,400 --> 00:05:26,839
Speaker 5: knock on effect in setting the minimum wage. It turns

96
00:05:26,880 --> 00:05:30,039
Speaker 5: out nearly twenty percent of the hike the chance were

97
00:05:30,040 --> 00:05:34,440
Speaker 5: announced in her budget was down to the OS's methodology change.

98
00:05:34,600 --> 00:05:37,800
Speaker 5: Businesses are telling Bloomberg the changing forecasts are making it

99
00:05:37,880 --> 00:05:40,680
Speaker 5: hard for them to plan, and it's not the first

100
00:05:40,680 --> 00:05:43,440
Speaker 5: time the ONS has been criticized for its data. The

101
00:05:43,480 --> 00:05:46,240
Speaker 5: Bank of England has bemoaned its labor force survey in

102
00:05:46,320 --> 00:05:49,839
Speaker 5: recent months. For its part, the OS says it's improving

103
00:05:49,880 --> 00:05:52,440
Speaker 5: the quality of its estimates and plans to make further

104
00:05:52,560 --> 00:05:56,680
Speaker 5: changes next year. In London, James Wilcock Bloomberg Radio.

105
00:05:57,400 --> 00:06:00,520
Speaker 1: The UK's Defined Secretary is considering sending British troops to

106
00:06:00,680 --> 00:06:04,400
Speaker 1: Ukraine for training purposes. A BBC journalist asked John Healey

107
00:06:04,440 --> 00:06:07,040
Speaker 1: about new support measures for the country.

108
00:06:08,000 --> 00:06:11,159
Speaker 6: Could that involve British troops boots on the ground inside

109
00:06:11,279 --> 00:06:12,760
Speaker 6: Ukraine training Ukrainians.

110
00:06:12,880 --> 00:06:15,760
Speaker 7: Well, the detail of our joint Ukrainian plan will have

111
00:06:15,839 --> 00:06:24,279
Speaker 7: to remain, let's say, unavailable to President Putin. But the

112
00:06:24,320 --> 00:06:27,560
Speaker 7: important thing is that we're stepping up the UK support

113
00:06:27,640 --> 00:06:30,760
Speaker 7: for Ukraine will determine that we will put Ukraine in

114
00:06:30,839 --> 00:06:34,159
Speaker 7: a stronger position in the weeks ahead and throughout twenty

115
00:06:34,200 --> 00:06:34,760
Speaker 7: twenty five.

116
00:06:35,720 --> 00:06:38,400
Speaker 1: The comments to the BBC come as the Ukrainian President

117
00:06:38,400 --> 00:06:40,880
Speaker 1: has admitted it may not be possible to carry on

118
00:06:41,000 --> 00:06:45,200
Speaker 1: fighting in areas already occupied by Russia. But Zelenski told

119
00:06:45,240 --> 00:06:47,839
Speaker 1: the French newspaper La Palazion that his people would never

120
00:06:48,000 --> 00:06:54,400
Speaker 1: recognize Russian rule. Alice Vaidel, the first ever chancellor candidate

121
00:06:54,600 --> 00:06:57,760
Speaker 1: from the far right Alternative for Germany party, is, told

122
00:06:57,800 --> 00:07:00,160
Speaker 1: Bloomberg she hopes Donald Trump will end the word war

123
00:07:00,200 --> 00:07:04,000
Speaker 1: in Ukraine. In an exclusive interview, Fidel says Europe is

124
00:07:04,080 --> 00:07:05,840
Speaker 1: not capable of ending the war.

125
00:07:06,640 --> 00:07:11,640
Speaker 8: I actually put my thumbs up for Donald Trump. We

126
00:07:11,800 --> 00:07:18,360
Speaker 8: have huge hope hopes with this in his presidency, and

127
00:07:18,440 --> 00:07:21,240
Speaker 8: I really hope that he puts an end on this

128
00:07:21,400 --> 00:07:24,040
Speaker 8: terrible war in the Ukraine. We are not capable anymore.

129
00:07:25,280 --> 00:07:28,000
Speaker 1: Fidell also called for a German exit from the EU

130
00:07:28,040 --> 00:07:32,440
Speaker 1: and Eurozone, criticizing the Block for holding back German carmakers.

131
00:07:32,800 --> 00:07:35,480
Speaker 1: The co leader of the anti immigrant party, is second

132
00:07:35,480 --> 00:07:38,760
Speaker 1: in the polls behind the Christian Democrats, with elections taking

133
00:07:38,760 --> 00:07:42,600
Speaker 1: place in February. Those are your top stories on the

134
00:07:42,640 --> 00:07:45,800
Speaker 1: markets that hawkers cut from the FED. Rattled markets, equity

135
00:07:46,080 --> 00:07:48,800
Speaker 1: markets having their worst reaction to a regular FED decision

136
00:07:48,840 --> 00:07:51,520
Speaker 1: day since two thousand and one, the S and P

137
00:07:51,600 --> 00:07:55,480
Speaker 1: five hundred falling nearly three percent, Treasury eels jumping eleven

138
00:07:55,520 --> 00:07:58,120
Speaker 1: basis points across the curve of the dollar surgeing on

139
00:07:58,120 --> 00:08:00,800
Speaker 1: the Bloomberg Dollar Spot Index as well. Also reaction on

140
00:08:00,840 --> 00:08:03,920
Speaker 1: the Brazilian reyale hitting fresh lows against the US dollar

141
00:08:03,960 --> 00:08:07,280
Speaker 1: weekening another three percent, the turmoil of Brazilian assets continuing

142
00:08:07,280 --> 00:08:10,120
Speaker 1: there as well. Overnight we have that boj decision two,

143
00:08:10,200 --> 00:08:12,000
Speaker 1: the n weakening on the back of that three tenths

144
00:08:12,040 --> 00:08:14,120
Speaker 1: against the dollar one hundred and fifty five thirty three

145
00:08:14,200 --> 00:08:16,560
Speaker 1: is where it's trading, and the nick in Tokyo down

146
00:08:16,720 --> 00:08:21,080
Speaker 1: seven tenths of one percent. Well, in a moment, we'll

147
00:08:21,080 --> 00:08:23,320
Speaker 1: bring you more on what we've been hearing from central

148
00:08:23,360 --> 00:08:24,920
Speaker 1: banks so far, plus look ahead to the Bank of

149
00:08:24,920 --> 00:08:28,760
Speaker 1: England decision today and discuss the defense challenges in Europe

150
00:08:29,080 --> 00:08:32,319
Speaker 1: as Donald Trump gets set to re enter the White

151
00:08:32,320 --> 00:08:34,679
Speaker 1: House in January. But just a brief word on another

152
00:08:34,720 --> 00:08:38,240
Speaker 1: story that we've been following this morning. Our food editor

153
00:08:38,440 --> 00:08:40,440
Speaker 1: Kate Crater, on a lighter note, has been writing about

154
00:08:40,480 --> 00:08:42,800
Speaker 1: some of the trends coming to restaurant tables in twenty

155
00:08:42,880 --> 00:08:46,960
Speaker 1: twenty five. The headlines More Spice, Japanese hand rolls as

156
00:08:47,000 --> 00:08:51,120
Speaker 1: the new Tacos and Peteza's getting new toppings. Also, she says,

157
00:08:51,120 --> 00:08:54,719
Speaker 1: watch out for Forcatcho being everywhere next year. Kate has

158
00:08:54,760 --> 00:08:57,680
Speaker 1: some tips for hot new openings coming in London, including

159
00:08:57,679 --> 00:09:00,800
Speaker 1: for big names like Gordon Ramsay and Jamie Oliver who

160
00:09:00,800 --> 00:09:04,440
Speaker 1: are making new forays into cookery classes. And we will

161
00:09:04,480 --> 00:09:07,080
Speaker 1: be having our best meals in hotels next year. Kate

162
00:09:07,160 --> 00:09:08,880
Speaker 1: has everything you need to know. You can read her

163
00:09:09,080 --> 00:09:12,240
Speaker 1: mouth watering restaurant trends coming to tables in twenty twenty

164
00:09:12,240 --> 00:09:16,040
Speaker 1: five on Bloomberg dot Com and on the terminal. Well,

165
00:09:16,160 --> 00:09:18,360
Speaker 1: let's dig into our main meal and the central Bank

166
00:09:18,400 --> 00:09:21,160
Speaker 1: decisions that we've had so far and the ones to come.

167
00:09:21,200 --> 00:09:23,160
Speaker 1: So the FED cutting for a third time in a row,

168
00:09:23,200 --> 00:09:26,520
Speaker 1: scaling back rate reduction plans for next year, the Bank

169
00:09:26,520 --> 00:09:28,120
Speaker 1: of Japan holding steady, and we have the Bank of

170
00:09:28,120 --> 00:09:29,800
Speaker 1: England to look forward to later as well. We've got

171
00:09:29,800 --> 00:09:33,280
Speaker 1: our markets live. Executive editor Mark Cudmore with us for more. Mark,

172
00:09:33,320 --> 00:09:35,160
Speaker 1: great to have you. Let's start with the Fed then

173
00:09:35,240 --> 00:09:37,720
Speaker 1: big market reaction in the prospect of fewer right cuts

174
00:09:37,720 --> 00:09:39,880
Speaker 1: next year. How much of a surprise was this?

175
00:09:40,880 --> 00:09:43,320
Speaker 9: Not much of a surprise in terms of that everyone

176
00:09:43,320 --> 00:09:46,959
Speaker 9: expected the Fed to deliver a hawkish cut. Yes, they

177
00:09:47,000 --> 00:09:50,440
Speaker 9: managed to out hoc those hawkish expectations. So I'm not

178
00:09:50,480 --> 00:09:53,920
Speaker 9: saying there is no surprise, but really it wasn't too much.

179
00:09:54,080 --> 00:09:56,720
Speaker 9: Just before the decision, you know, our team was kind

180
00:09:56,760 --> 00:09:59,480
Speaker 9: of debating whether they'd suggest two cuts of three cuts

181
00:09:59,480 --> 00:10:02,199
Speaker 9: next year. Are kind of torn that way. The outsized

182
00:10:02,200 --> 00:10:06,120
Speaker 9: reaction is a reflection of positioning, of time of year,

183
00:10:06,320 --> 00:10:09,600
Speaker 9: of the valuations before the meeting. You know, anyone who's

184
00:10:09,600 --> 00:10:11,640
Speaker 9: been long use of stocks has had a wonderful year.

185
00:10:11,920 --> 00:10:14,960
Speaker 9: We all know they're supremely expensive, and now you've been

186
00:10:14,960 --> 00:10:17,640
Speaker 9: given the slightest reason to sell just before Christmas, just

187
00:10:17,720 --> 00:10:20,240
Speaker 9: for a holiday period. Yeah, baile out, take a profit

188
00:10:20,280 --> 00:10:20,640
Speaker 9: and run.

189
00:10:21,520 --> 00:10:24,079
Speaker 1: But in terms of what markets are now expecting from

190
00:10:24,080 --> 00:10:26,760
Speaker 1: the FED next year, they've gone even further. Only one

191
00:10:26,840 --> 00:10:28,880
Speaker 1: cut fully priced in. Is that an overreaction?

192
00:10:29,640 --> 00:10:31,679
Speaker 9: No, not really, I mean will they even cut it

193
00:10:31,760 --> 00:10:33,400
Speaker 9: all next year? Actually, just before I came down to

194
00:10:33,400 --> 00:10:35,320
Speaker 9: the radio studio, asked my team, I said, who will

195
00:10:35,400 --> 00:10:37,520
Speaker 9: hike first? Be at the Bank of Japan or the

196
00:10:37,520 --> 00:10:39,720
Speaker 9: FED next year? I don't know. Have been slightly facetious,

197
00:10:39,760 --> 00:10:42,360
Speaker 9: but you know, it's it might be a valid question.

198
00:10:42,440 --> 00:10:42,920
Speaker 6: Soon enough.

199
00:10:43,200 --> 00:10:45,520
Speaker 9: Look, I'm not convinced the Fed cuts at all next year.

200
00:10:45,600 --> 00:10:47,560
Speaker 9: I just don't know how you have any conviction in

201
00:10:47,640 --> 00:10:49,120
Speaker 9: a cut. We don't know what policies are going to

202
00:10:49,120 --> 00:10:51,760
Speaker 9: be delivered by the Trump administration. The whole market seems

203
00:10:51,800 --> 00:10:55,280
Speaker 9: to be a divide whether you know all these commitments

204
00:10:55,320 --> 00:10:57,520
Speaker 9: are just negotiating threats are really gonna be delivered.

205
00:10:57,559 --> 00:10:58,560
Speaker 10: So no one's got a clue yet.

206
00:10:58,960 --> 00:11:00,880
Speaker 9: So I don't think you should have any confidence in

207
00:11:00,920 --> 00:11:03,440
Speaker 9: a cut. To me, the Fed might be hiking next year,

208
00:11:03,440 --> 00:11:04,480
Speaker 9: it might not be cutting it at all. You know,

209
00:11:04,559 --> 00:11:06,120
Speaker 9: I just don't think anything at all. So I don't

210
00:11:06,120 --> 00:11:08,160
Speaker 9: thin the marks have ever erected. If anything, I actually

211
00:11:08,160 --> 00:11:09,640
Speaker 9: think gilds should continue to go higher.

212
00:11:10,160 --> 00:11:12,200
Speaker 1: Okay, well, depending to watch in terms of the Fed.

213
00:11:12,240 --> 00:11:15,200
Speaker 1: Then as well, we've had a Bankajapan decision slightly less exciting,

214
00:11:15,200 --> 00:11:18,760
Speaker 1: maybe just holding on to interest rates. How far away

215
00:11:18,840 --> 00:11:21,160
Speaker 1: does the next hike look from the Bank of Japan?

216
00:11:21,559 --> 00:11:23,520
Speaker 9: I mean right now, pretty far. I mean the Bank

217
00:11:23,559 --> 00:11:27,679
Speaker 9: Japan they're great at disappointing and underwhelming and confusing, and

218
00:11:27,720 --> 00:11:30,320
Speaker 9: I guess they've kind of stuck with that policy approach,

219
00:11:31,360 --> 00:11:33,560
Speaker 9: you know, after a brief glimpse that they might actually

220
00:11:33,640 --> 00:11:35,240
Speaker 9: have a clear planner of this year. I think they've

221
00:11:35,280 --> 00:11:39,200
Speaker 9: abandoned it at the last moment. I mean, ultimately, I

222
00:11:39,240 --> 00:11:41,440
Speaker 9: think there's a view that they're going to get away

223
00:11:41,440 --> 00:11:43,800
Speaker 9: with hiking in the first quarter, but I have to

224
00:11:43,800 --> 00:11:46,320
Speaker 9: say they're losing the kind of credibility and they're losing

225
00:11:46,320 --> 00:11:49,640
Speaker 9: the faith of the market out there. Again, I wouldn't

226
00:11:49,840 --> 00:11:52,280
Speaker 9: have too much conviction either way because we don't know

227
00:11:52,559 --> 00:11:53,679
Speaker 9: just don't know what's going to come out of the

228
00:11:53,760 --> 00:11:55,680
Speaker 9: US yet, and I think in terms of trade turf

229
00:11:55,760 --> 00:11:58,199
Speaker 9: that's just going to be such global ramifications that I

230
00:11:58,200 --> 00:12:00,480
Speaker 9: don't think there's any worth having any conviction either way.

231
00:12:00,520 --> 00:12:03,280
Speaker 9: In Bank of Japan, you know, when will they deliver

232
00:12:03,320 --> 00:12:05,120
Speaker 9: the next hike? I just can't answer right now, but

233
00:12:05,120 --> 00:12:07,120
Speaker 9: I wouldn't want to be confident that they're going to

234
00:12:07,160 --> 00:12:08,200
Speaker 9: deliver at the next meeting either.

235
00:12:09,000 --> 00:12:11,040
Speaker 1: We've got a Bank of England decision later on today

236
00:12:11,120 --> 00:12:13,679
Speaker 1: as well. I mean, I wonder that does that philosophy

237
00:12:13,679 --> 00:12:15,480
Speaker 1: hole for the Bank of England too, And I suppose

238
00:12:15,520 --> 00:12:18,800
Speaker 1: at what point do rate decisions next year become much

239
00:12:18,840 --> 00:12:21,000
Speaker 1: more interesting when we have a bit more detail on

240
00:12:21,200 --> 00:12:23,640
Speaker 1: what the Trump the Trump tariff situation might be.

241
00:12:24,200 --> 00:12:25,720
Speaker 9: Yeah, well, so I think the bank going in today,

242
00:12:25,800 --> 00:12:28,720
Speaker 9: you know, they've been undermined by the data recently, and

243
00:12:28,720 --> 00:12:30,520
Speaker 9: they've got a bit of a tricky situation because I

244
00:12:30,520 --> 00:12:33,760
Speaker 9: don't think they really trust the data themselves. But you know,

245
00:12:33,800 --> 00:12:36,240
Speaker 9: it's it's a hard message to going to go, oh,

246
00:12:36,280 --> 00:12:37,760
Speaker 9: we don't really believe the data and we're going to

247
00:12:37,840 --> 00:12:39,280
Speaker 9: ignore it and the data is rubbish, because then other

248
00:12:39,280 --> 00:12:40,680
Speaker 9: times they want to point to the data. But I

249
00:12:40,679 --> 00:12:43,000
Speaker 9: think they're going to attempt to be you know, reiterate

250
00:12:43,040 --> 00:12:45,560
Speaker 9: that they still want to cut, you know, four times

251
00:12:45,640 --> 00:12:48,560
Speaker 9: next year. The market's moved away from that pricing, so

252
00:12:48,760 --> 00:12:50,679
Speaker 9: I think at the margin it'll be a b a

253
00:12:50,720 --> 00:12:54,439
Speaker 9: duvish BOE. But I'm not expecting an outsize reaction again

254
00:12:54,480 --> 00:12:56,960
Speaker 9: because that backdrop of like hawkishness from the Fed out there.

255
00:12:57,040 --> 00:12:59,320
Speaker 9: So the initial reaction will be dubbish. But are we

256
00:12:59,320 --> 00:13:01,280
Speaker 9: still worried about that next week? No, probably not, because

257
00:13:01,480 --> 00:13:03,480
Speaker 9: as you know, I just said the same theme. We

258
00:13:03,520 --> 00:13:05,599
Speaker 9: have so much uncertainty going into next year that I

259
00:13:05,640 --> 00:13:07,360
Speaker 9: don't think we are going to get too convinced on

260
00:13:07,800 --> 00:13:09,400
Speaker 9: what central bankers say right now.

261
00:13:09,720 --> 00:13:12,160
Speaker 1: Okay, you're the share thing in our uncertain world. Mark

262
00:13:12,160 --> 00:13:14,240
Speaker 1: cod Moore, thanks very much for joining us, our executive

263
00:13:14,320 --> 00:13:17,840
Speaker 1: editor for Markets Live. There no foreigns policy issues are

264
00:13:17,880 --> 00:13:20,400
Speaker 1: in focus. In Brussels today, EU leaders meeting for the

265
00:13:20,440 --> 00:13:23,880
Speaker 1: final time this year. Ukraine's President Zelenski will join the meeting,

266
00:13:23,920 --> 00:13:26,560
Speaker 1: and it concerns the US is scaling back support for

267
00:13:26,640 --> 00:13:29,920
Speaker 1: Kiev when Donald Trump takes office in January. Our corresponds,

268
00:13:29,920 --> 00:13:33,319
Speaker 1: Oliver Crook, is in Brussels this morning. Oliver, this meeting

269
00:13:33,360 --> 00:13:36,080
Speaker 1: is happening at a time when they're increasing fears that

270
00:13:36,160 --> 00:13:39,480
Speaker 1: Europe's at a greater risk of war with Russia. How

271
00:13:39,520 --> 00:13:42,120
Speaker 1: seriously are those fears being taken by EU leaders?

272
00:13:42,280 --> 00:13:44,320
Speaker 11: I mean, I think they're being taken very seriously, but

273
00:13:44,360 --> 00:13:46,360
Speaker 11: I think it comes at a time for EU leaders

274
00:13:46,360 --> 00:13:48,800
Speaker 11: that even if these leaders are taking it seriously, there's

275
00:13:48,840 --> 00:13:51,280
Speaker 11: a serious question about how much they can get done,

276
00:13:51,320 --> 00:13:54,240
Speaker 11: particularly when we're looking at the context of France, the

277
00:13:54,360 --> 00:13:56,480
Speaker 11: context of Germany, where at the heart of the EU

278
00:13:56,600 --> 00:13:59,280
Speaker 11: the sort of two really big animating forces. And frankly,

279
00:13:59,320 --> 00:14:01,840
Speaker 11: earlier in the US we were talking about the big

280
00:14:01,880 --> 00:14:04,080
Speaker 11: problem that there was between my Coal and Schultz not

281
00:14:04,120 --> 00:14:06,160
Speaker 11: getting along and not pulling in the same direction, and

282
00:14:06,200 --> 00:14:10,000
Speaker 11: that being a blockade to EU policy making and really

283
00:14:10,000 --> 00:14:13,320
Speaker 11: getting initiatives moving. Now that basically both of these leaders

284
00:14:13,360 --> 00:14:16,520
Speaker 11: are lame ducks or some variation of are completely vulnerable

285
00:14:16,559 --> 00:14:19,160
Speaker 11: at home, there is very little likelihood that things can

286
00:14:19,200 --> 00:14:21,440
Speaker 11: be sort of worked out in this sort of grand,

287
00:14:21,480 --> 00:14:23,520
Speaker 11: sort of European fashion that really they need to. And

288
00:14:23,560 --> 00:14:25,720
Speaker 11: this is something that I spoke with the Prime Minister

289
00:14:25,760 --> 00:14:28,560
Speaker 11: of Luxembourg yesterday about. He is coming to these meetings

290
00:14:28,640 --> 00:14:30,680
Speaker 11: and he's saying that basically this dysfunction in France and

291
00:14:30,720 --> 00:14:33,880
Speaker 11: Germany are making it very very hard to get things done.

292
00:14:33,960 --> 00:14:35,600
Speaker 11: And I think that this is across the board, right.

293
00:14:35,640 --> 00:14:37,400
Speaker 11: We talk about it in the context of defense, in

294
00:14:37,400 --> 00:14:40,360
Speaker 11: the context of Ukraine, but of course there's also the

295
00:14:40,400 --> 00:14:43,720
Speaker 11: broader military spend idea, right, and there's also these countries

296
00:14:43,880 --> 00:14:46,920
Speaker 11: that are struggling in part politically because the budgets are

297
00:14:46,920 --> 00:14:49,120
Speaker 11: not there, the growth is not there, the money is

298
00:14:49,160 --> 00:14:50,800
Speaker 11: not there. And this is really at the heart of

299
00:14:50,840 --> 00:14:52,680
Speaker 11: not just the question of defense, but all of these

300
00:14:52,720 --> 00:14:55,600
Speaker 11: issues that Europe has right now that are really embodied

301
00:14:55,880 --> 00:14:58,000
Speaker 11: by the sort of Droggy report and everything that he

302
00:14:58,080 --> 00:15:01,080
Speaker 11: is pushing forward with a real doubt about the political

303
00:15:01,120 --> 00:15:03,880
Speaker 11: will to being there and again the money being there

304
00:15:03,920 --> 00:15:06,000
Speaker 11: to build out that sort of defense and not basically

305
00:15:06,000 --> 00:15:06,800
Speaker 11: becoming vulnerable.

306
00:15:06,840 --> 00:15:08,560
Speaker 10: There's a very strong argument.

307
00:15:08,200 --> 00:15:10,680
Speaker 11: To make that the situation in Ukraine wouldn't have happened,

308
00:15:10,720 --> 00:15:12,440
Speaker 11: or wouldn't have happened in the way that it did,

309
00:15:12,640 --> 00:15:15,160
Speaker 11: had the Europeans been spending on defense and had been

310
00:15:15,240 --> 00:15:17,680
Speaker 11: hitting those targets. And now we're talking about two percent,

311
00:15:17,960 --> 00:15:20,200
Speaker 11: that was just the maintenance rate. What Europe needs in

312
00:15:20,280 --> 00:15:23,080
Speaker 11: order to have a sort of comprehensive and credible defense

313
00:15:23,080 --> 00:15:24,640
Speaker 11: industry is probably quite a.

314
00:15:24,560 --> 00:15:26,720
Speaker 10: Bit more than that when the money is just not there.

315
00:15:27,360 --> 00:15:30,560
Speaker 1: Oliver, You've also been speaking to the chancellor content from

316
00:15:30,560 --> 00:15:33,920
Speaker 1: the Far Heights AfD in Germany. This is, you know,

317
00:15:34,000 --> 00:15:36,240
Speaker 1: ahead of the elections there in February. What's her view

318
00:15:36,280 --> 00:15:36,960
Speaker 1: on this issue?

319
00:15:37,080 --> 00:15:39,240
Speaker 11: Yeah, so listen, I think it's a very interesting person

320
00:15:39,240 --> 00:15:41,120
Speaker 11: to be speaking to right now. I mean, Alice Vitel.

321
00:15:41,200 --> 00:15:43,920
Speaker 11: She's the first ever chancellor candidate that the AfD has

322
00:15:43,960 --> 00:15:46,240
Speaker 11: put forward. This is a party that has been largely

323
00:15:46,720 --> 00:15:49,960
Speaker 11: ignored in Germany, as had happened historically with lipenn in France.

324
00:15:50,200 --> 00:15:52,840
Speaker 11: And these are parties that are basically no longer ignorable

325
00:15:52,880 --> 00:15:55,040
Speaker 11: in Europe. I mean, the AfD now has twenty percent

326
00:15:55,040 --> 00:15:57,040
Speaker 11: of the vote in Germany. They are the number two

327
00:15:57,680 --> 00:16:00,720
Speaker 11: party in Germany. And their stance is, you know, as

328
00:16:00,760 --> 00:16:04,240
Speaker 11: we know, very sort of anti immigration, very sort of nationalists.

329
00:16:04,280 --> 00:16:04,840
Speaker 10: But one of the.

330
00:16:04,800 --> 00:16:08,800
Speaker 11: Main planks of her party platform is an exit of

331
00:16:08,840 --> 00:16:11,640
Speaker 11: the EU and an exit of the euro right. These

332
00:16:11,680 --> 00:16:14,000
Speaker 11: are positions that have been abandoned by many of the

333
00:16:14,040 --> 00:16:17,360
Speaker 11: far right parties across Europe, including Le penn in order

334
00:16:17,440 --> 00:16:18,920
Speaker 11: to get elected.

335
00:16:19,080 --> 00:16:21,120
Speaker 10: But we're talking about the number two party.

336
00:16:20,880 --> 00:16:23,880
Speaker 11: And maybe the biggest player in Europe talking about leaving

337
00:16:23,880 --> 00:16:26,240
Speaker 11: the euro and is she will not govern, she will

338
00:16:26,240 --> 00:16:28,400
Speaker 11: not have power, but she is a fundamental part of

339
00:16:28,400 --> 00:16:30,480
Speaker 11: this debate and she is moving the debate in Germany.

340
00:16:30,560 --> 00:16:32,840
Speaker 10: This is significant, okay, Oliver Kropp.

341
00:16:33,360 --> 00:16:36,120
Speaker 1: Now, Barkley's is expected to increase annual bonuses by up

342
00:16:36,120 --> 00:16:39,040
Speaker 1: to twenty percent due to an improved year for traders

343
00:16:39,080 --> 00:16:42,520
Speaker 1: and investment bankers. That's coorting sources that have spoken to Bloomberg.

344
00:16:42,600 --> 00:16:45,600
Speaker 1: Last year, bonuses the bank fell by forty three percent

345
00:16:45,680 --> 00:16:48,520
Speaker 1: across the board. That's bringing our finals. Reporter Will Shaw,

346
00:16:48,560 --> 00:16:52,040
Speaker 1: who broke this story for Bloomberg well, what have you

347
00:16:52,160 --> 00:16:54,840
Speaker 1: learned about the bonus plans at Barkley's this year and

348
00:16:55,040 --> 00:16:56,840
Speaker 1: how does it compare to the past few years at

349
00:16:56,880 --> 00:16:57,280
Speaker 1: the bank.

350
00:16:58,080 --> 00:17:01,200
Speaker 6: So basically, staff in the trading unit are expecting to

351
00:17:01,240 --> 00:17:04,439
Speaker 6: see a rise of about five percent ten percent in

352
00:17:04,480 --> 00:17:07,560
Speaker 6: their annual annual awards. Now for bankers who are working

353
00:17:07,600 --> 00:17:10,440
Speaker 6: in debt and equity capital markets, they can see them

354
00:17:10,480 --> 00:17:15,440
Speaker 6: go even higher, somewhere between ten percent and twenty percent. Though,

355
00:17:15,520 --> 00:17:18,239
Speaker 6: should say the final decisions on the bonus port are

356
00:17:18,280 --> 00:17:21,199
Speaker 6: still being made now, Like you say, last year they

357
00:17:21,280 --> 00:17:24,760
Speaker 6: dropped forty three percent across the bank and in fact,

358
00:17:24,880 --> 00:17:28,720
Speaker 6: dozens of bonuses got dozens of bankers got no bonuses

359
00:17:28,760 --> 00:17:31,760
Speaker 6: at all during that period during to a slowdown in

360
00:17:32,080 --> 00:17:35,639
Speaker 6: corporate deal making and capital markets. And then in twenty

361
00:17:35,720 --> 00:17:38,800
Speaker 6: twenty two it was don eight percent as well. So

362
00:17:39,200 --> 00:17:41,800
Speaker 6: this is the this is the first year in a

363
00:17:41,840 --> 00:17:44,600
Speaker 6: couple where things are starting to look a bit better

364
00:17:44,680 --> 00:17:47,639
Speaker 6: for investment bankers and how they'll be rewarded.

365
00:17:48,680 --> 00:17:52,479
Speaker 1: More generally. How how is Barclay's doing at the moment,

366
00:17:52,560 --> 00:17:55,840
Speaker 1: and what's what's twenty twenty four been like for the bank?

367
00:17:56,560 --> 00:17:58,720
Speaker 6: I mean it's been good generally, So you can tell.

368
00:17:58,800 --> 00:18:02,880
Speaker 6: So the CEO Venka as he is known, pushed ahead

369
00:18:03,000 --> 00:18:06,320
Speaker 6: with a multi year plan to cut cut costs and

370
00:18:06,359 --> 00:18:09,320
Speaker 6: boost returns. He's aiming over a few years to cut

371
00:18:09,320 --> 00:18:12,840
Speaker 6: costs for about two billion dollars and by Q three

372
00:18:13,000 --> 00:18:17,479
Speaker 6: things were starting to look good. Advisory revenue was up

373
00:18:17,520 --> 00:18:21,399
Speaker 6: more than double the revenue brought in by fixed income

374
00:18:21,520 --> 00:18:26,800
Speaker 6: and equities traders beat expectations. So things are looking positive.

375
00:18:28,760 --> 00:18:32,359
Speaker 1: What about the outlook more generally from banks this year

376
00:18:32,560 --> 00:18:35,240
Speaker 1: for bonuses? What's the big picture that we're getting so

377
00:18:35,400 --> 00:18:37,040
Speaker 1: far from the big names in this sector.

378
00:18:37,880 --> 00:18:40,359
Speaker 6: So we're still waiting on that. I mean, obviously Wall

379
00:18:40,400 --> 00:18:43,960
Speaker 6: Street will be hoping that the Barklay's results are the

380
00:18:44,040 --> 00:18:46,239
Speaker 6: rule and are not going to be. It's not going

381
00:18:46,280 --> 00:18:49,680
Speaker 6: to be too different from that. So bankers in debt

382
00:18:49,760 --> 00:18:52,440
Speaker 6: sales are predicted to get about twenty three percent rise

383
00:18:52,560 --> 00:18:56,960
Speaker 6: in their total pay, and that's according to Options Group

384
00:18:57,280 --> 00:19:00,840
Speaker 6: at Johnson Associates, which is a similar search for is

385
00:19:00,920 --> 00:19:04,119
Speaker 6: forecasting an even bigger rise in that capital markets perhaps

386
00:19:04,119 --> 00:19:06,640
Speaker 6: of twenty five percent to thirty five percent.

387
00:19:07,880 --> 00:19:10,600
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

388
00:19:10,680 --> 00:19:13,720
Speaker 1: stories making news from London to Wall Street and beyond.

389
00:19:14,000 --> 00:19:17,960
Speaker 12: Look for us on your podcast feed every morning, on Apple, Spotify,

390
00:19:18,080 --> 00:19:20,000
Speaker 12: and anywhere else you get your podcasts.

391
00:19:20,040 --> 00:19:23,080
Speaker 1: You can also listen live each morning on London Dab Radio,

392
00:19:23,119 --> 00:19:26,879
Speaker 1: the Bloomberg Business app, and Bloomberg dot Com.

393
00:19:26,920 --> 00:19:29,679
Speaker 12: Our flagship New York station, is also available on your

394
00:19:29,720 --> 00:19:34,439
Speaker 12: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

395
00:19:34,680 --> 00:19:35,960
Speaker 12: I'm Caroline Hepka and.

396
00:19:35,920 --> 00:19:38,560
Speaker 1: I'm Stephen Carroll. Join us again tomorrow morning for all

397
00:19:38,600 --> 00:19:41,000
Speaker 1: the news you need to start your day right here

398
00:19:41,040 --> 00:19:43,679
Speaker 1: on Bloomberg Daybreak Europe