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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Blue Big Day, Bake You Podcast. Good Morning,

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Speaker 2: It's Monday, the sixth of October. I'm Caroline Hepkeitt in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today, Japanese stocks

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Speaker 3: sore and the yen weekends as investors react to sanay

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Speaker 3: Takeiichi's pro stimulus stance as she's on track to become

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Speaker 3: the country's first female prime minister.

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Speaker 2: Israel and Hamas prepare for talks aimed at ending the

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Speaker 2: two year conflict that's devastated Gaza and destabilized the Middle East.

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Speaker 3: Plus an eleven thousand to one gamble gone wrong. Big

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Speaker 3: banks count the cost after a tiny fund's big bet

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Speaker 3: ends in disaster.

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Speaker 4: Let's start with a roundup of our top stories.

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Speaker 3: Sanae taka Ichi, a pro stimulus conservative, is poised to

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Speaker 3: become Japan's first female prime minister. Japanese equities led Asian

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Speaker 3: stocks to an old time high following her surprise win

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Speaker 3: and the ruling.

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Speaker 5: LDP's leadership race.

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Speaker 3: While equity investors embraced the news, bond markets did not

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Speaker 3: longer dated Japanese bond slid with the forty year yields

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Speaker 3: surging as investors balanced the potential upside of stimulus against

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Speaker 3: debt market risk with more. Here's our editor at large

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Speaker 3: in Tokyo, Sherry Anne.

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Speaker 1: We know that Sananatakaichi is a nationalist. We know that

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Speaker 1: she's a fan of Margaret Thatcher, a fan of heavy

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Speaker 1: metal music as well.

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Speaker 5: But it's really the pro.

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Speaker 1: Growth policies that Sanattakaichi has talked about that is really

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Speaker 1: the focus for investors. She's talked about the bogspeezy monetary policy.

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Speaker 1: Toned down her rhetoric during this election campaign, but we

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Speaker 1: know that she wants to continue expanding fiscal policy. She's

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Speaker 1: promised cash Handel's tax rebate, hinting at raising the tax

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Speaker 1: free income allowance as well.

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Speaker 3: Charry Ama was speaking as analysts that Goldman Sachs warns

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Speaker 3: that volatility in Japan's longer dated bonds may now spill

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Speaker 3: over into markets as far away is the US and

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Speaker 3: UK scrutiny of longer data. Debt in many developed economies

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Speaker 3: has increased as government's ramp up borrowing, and inflation remains

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Speaker 3: stubbornly high.

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Speaker 2: Now, the growing fiscal concerns in some of the world's

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Speaker 2: biggest economies has seen some investors flocked to the perceived

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Speaker 2: safety of precious metals and bitcoin. Gold hit another record

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Speaker 2: today and is now closing in on four thousand dollars

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Speaker 2: an ounce, following a glittering run that's seen its surge

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Speaker 2: almost fifty percent this year. Bitcoin meanwhile, set another all

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Speaker 2: time high over the weekend as a border risk rally

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Speaker 2: around the US government shut down Boyd, the world's largest cryptocurrency.

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Speaker 3: Her mass representatives have arrived in Egypt for peace talks,

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Speaker 3: seen as the most optimistic moment for diplomacy in the

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Speaker 3: war with Israel. US President Donald Trump is pressing both

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Speaker 3: parties to end their near two year war and sign

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Speaker 3: up to his twenty point peace plan. Trump told reporters

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Speaker 3: he's honored to be a big part of it.

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Speaker 5: They've been fighting for a plan for years.

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Speaker 4: We get the passages back almost immediately.

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Speaker 1: Negotiations are going on right now, will probably take a

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Speaker 1: couple of days, and people very happy about it.

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Speaker 3: The details of what President Trump's plan would mean for

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Speaker 3: Gaza's long term future are unclear. For its part, Hamasa

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Speaker 3: has said that it will release all hostages if the

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Speaker 3: deal is signed, but haven't yet agreed to disarm after

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Speaker 3: nearly two years of fighting. The UN backed organizations say

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Speaker 3: Palestinians have been subjected to famine and genocide.

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Speaker 2: Here in the UK, Home Secretary Shabanamatt Mood says that

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Speaker 2: she is considering new laws to ban repeated protests in

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Speaker 2: Britain after pro Palestine marches over the weekend. Almost five

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Speaker 2: hundred people were arrested at a march on Saturday the

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Speaker 2: police and the government had tried to cancel after a

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Speaker 2: terror attack on a synagogue. Mahmood says the large scale

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Speaker 2: demonstrations over Gaza are causing considerable fear for the Jewish

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Speaker 2: commune unity.

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Speaker 6: And what I will be making explicit is that cumulative disruption,

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Speaker 6: that is to say, the frequency of particular protests in

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Speaker 6: particular places is in and of itself a reason for

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Speaker 6: the police to be able to restrict and place conditions.

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Speaker 6: That is to say, they can move them to a

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Speaker 6: different place, they can restrict the time that those protests

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Speaker 6: can occur on my moods.

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Speaker 2: Critics include civil liberties groups like Amnesty International, who warn

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Speaker 2: the UK's right to protest is being evoded. Reports of

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Speaker 2: anti Semitic and Islamophobic attacks in Britain are on the

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Speaker 2: rise as security officials fear the war in Gaza radicalizing

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Speaker 2: people living in the UK.

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Speaker 3: French President Emmanuel Macran has appointed a largely unchanged cabinets,

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Speaker 3: with most senior ministers from the previous government staying on.

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Speaker 3: Among the key changes, Rolanda Scure, a close ally of

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Speaker 3: the president, becomes Finance Minister, well former minister Bruno Leameier

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Speaker 3: returns as Defense Minister. The announcement of sparks backlash from

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Speaker 3: opposition parties who've demanded a change of course after months

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Speaker 3: of political turmoil that could threaten Prime Minister Sebastianna kron

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Speaker 3: New's survival and parliament this week. Opposition groups have said

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Speaker 3: they will call a no confidence vote as soon as

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Speaker 3: he lays out his policy plans in the National Assembly tomorrow.

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Speaker 2: Opek Plus has agreed to return one hundred and thirty

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Speaker 2: seven thousand bowels a day of halted supply to markets,

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Speaker 2: a slower pace than earlier this year. That's despite signs

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Speaker 2: of a global oil surplus starting to emerge, and after

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Speaker 2: an earlier difference in position between co leaders Saudi Arabia

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Speaker 2: and Russia. Our reporter Wailan Soon says OPEC producers are

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Speaker 2: each facing different circumstances.

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Speaker 7: Some like Russia is actually trying to contend with like

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Speaker 7: increased attacks on its oil production capacity. So let's all

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Speaker 7: put pulling back some of their potential production. We do

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Speaker 7: see some estimates for their one hundred and thirty seven

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Speaker 7: thousand barrels per day that or pet promise over the weekend,

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Speaker 7: Actually Russia took up about a third of that and

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Speaker 7: a third of debt might come under stress because of

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Speaker 7: your princess hex on our expot.

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Speaker 2: Facilities, bloombergs Whalenson speaking there. The decision to drip feed

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Speaker 2: more barrels into the market shows opek's commitment to keep

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Speaker 2: battling for a share of the global oil market. But

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Speaker 2: the market's forward curve, which is closely watched by OPEK,

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Speaker 2: is filtering. Wall Street forecasters like JP Morgan and Goldman

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Speaker 2: Sachs expect the oil price slide will extend below sixty

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Speaker 2: dollars a barrel.

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Speaker 3: And those are your top stories on the markets. The

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Speaker 3: Mscish Pacific Index is up slightly on the day, with

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Speaker 3: the standout performer in Asia is the Nika and Tokyo,

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Speaker 3: which is four point seven percent higher. The topics of

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Speaker 3: by three point two percent, the Japanese yen one point

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Speaker 3: nine percent weaker against the dollar at one fifty to

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Speaker 3: thirty one point eight percent weeker against the euro at

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Speaker 3: one seventy six twenty three. The Bloomberg Dollar Spot Index

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Speaker 3: three tenths stronger this morning, the euro training at one

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Speaker 3: seventeen twenty three. EUROSDOKS fifty futures are up by a

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Speaker 3: tenth of one percent.

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Speaker 2: Well, those are the markets. In a moment, We're going

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Speaker 2: to bring you more on the political and market fallout

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Speaker 2: from the surprise choice for prime minister in Japan, plus

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Speaker 2: the eleven thousand to one bet that has burned some

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Speaker 2: of Wall Street's biggest banks. But there is another story

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Speaker 2: that has caught our right as ever. This Monday morning,

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Speaker 2: we're going to bring you the case for mechanical watches

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Speaker 2: in a digital age. I love this story.

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Speaker 5: A Quest for Time Caroline.

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Speaker 3: What a great title for a piece of quite frankly

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Speaker 3: ar so Chris Rossar has been writing about this from

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Speaker 3: Bar Bloomberg Proceeds team about So it's essentially the history

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Speaker 3: of watches. I suppose discussed around this incredible piece that

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Speaker 3: was created that he went on a private trip to

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Speaker 3: the Louver to see It's called La cuet duton, so

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Speaker 3: the quest for a time made by the Swiss watchmaker

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Speaker 3: of aacheron Constantin, and the piece itself is exquisite.

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Speaker 5: There are photos of it in the article.

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Speaker 3: It's got Lapis Lazilai mother of Pearl gold statuette on

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Speaker 3: top of it. It seems to tell the time, but

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Speaker 3: also your mood and the moon cycles and probably whether

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Speaker 3: it's going to rain tomorrow by the look of it

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Speaker 3: as well. But it is something that is a work

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Speaker 3: of art sighted in the Louvers so in its home there,

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Speaker 3: and that prompted this reflection from Chris about the art

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Speaker 3: form of time pieces and also where they are now.

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Speaker 3: You know, we had that big pandemic rush into people

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Speaker 3: buying more watches. That's of course now facing the realities

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Speaker 3: of things like tariff stickley for Swiss companies as well.

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Speaker 3: But Chris kind of poses the more existential question for

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Speaker 3: watchmakers of you know, the Apple watch, does that kill everything?

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Speaker 3: Does the digital device no give you you know, the

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Speaker 3: alternative definitely doesn't.

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Speaker 2: I've a watch and a timer obviously you've got, you know,

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Speaker 2: my phone with its digital countdown on it. Also, but

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Speaker 2: I also wear a watch too, so no, I think

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Speaker 2: the more time pieces you've got, the better.

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Speaker 3: See I last wore a watch in two thousand and

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Speaker 3: six because I stopped wearing one, partly because of being

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Speaker 3: surrounded by clocks at every other moment of my life.

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Speaker 3: But I have to say reading Chris's piece has made

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Speaker 3: me perhaps reconsider all of those watches people have given

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Speaker 3: me of gifts over the years that are hiding.

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Speaker 5: In drawers and various parts of my home. Maybe it's

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Speaker 5: time to take one out. We'll see. Anyway, we will put

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Speaker 5: a link to piece in our podcast show notes.

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Speaker 4: Absolutely good stuff.

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Speaker 2: Look, let's get to our main story though, Japan, where

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Speaker 2: we're seeing major market reactions to the news of a

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Speaker 2: pro stimulus lawmaker to become Prime minister. Japanese stock soaring,

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Speaker 2: the yen weakening to a record low against the year

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Speaker 2: long dated bonds also selling off. Our Asia News Desk

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Speaker 2: Managing editor Jill Desis joins us now for more on this.

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Speaker 4: Jill, good morning. How much do.

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Speaker 2: You think markets are reacting to this and potential what

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Speaker 2: are only really potential policies? Why is such a big

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Speaker 2: market reaction?

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Speaker 8: It's really I think comes down to a lot of

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Speaker 8: takea ICHI's previous comments when it comes to easy money

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Speaker 8: policy being very pro stimulus. I mean, this is somebody

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Speaker 8: that at one point last year described the prospect of

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Speaker 8: the Bank of Japan raising rates as quote stupid. She's

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Speaker 8: certainly kind of, you know, toned down her rhetoric a

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Speaker 8: little bit since then. But I think a lot of that,

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Speaker 8: in combination with you know, some things that she said

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Speaker 8: about her expansion of spending policies and tendencies in the past,

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Speaker 8: have really kind of, you know, thrown into you know,

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Speaker 8: relief here this idea that you do have somebody that's

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Speaker 8: really embracing the policies of her former mentor the former

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Speaker 8: Prime ministertion z of Abe. So I think all of that,

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Speaker 8: in combination with each other, you're really seeing traders kind

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Speaker 8: of rush to recalibrate their chances of a BOJ rate

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Speaker 8: hike at the next meeting later this month. You're seeing

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Speaker 8: them kind of start to price in that idea that

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Speaker 8: there could be more stimulus on the way. Again, she

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Speaker 8: has toned down some of her rhetoric recently, but I

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Speaker 8: think that's sort of where the vibe is shifting her win.

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Speaker 3: In the LTP leadership price though was a surprise. What

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Speaker 3: was it? Do we know that won it for her?

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Speaker 1: Yeah?

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Speaker 8: I think it's a combination of a couple of different

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Speaker 8: factors here. So first of all, you know, point out,

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Speaker 8: she did get the most votes in the first round

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Speaker 8: against her opponent, Quwaizumi, who was assumed to be, you know,

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Speaker 8: somebody is a front runner there. So maybe there's momentum

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Speaker 8: that she was really gaining sort of in those repeated

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Speaker 8: rounds of gunning for this leadership role. But I also

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Speaker 8: think that you know, look, the the LDP, this you know,

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Speaker 8: political party, leading political party in Japan has kind of

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Speaker 8: in shambles at this point. I mean, the former Prime

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Speaker 8: Minister Ishiba, you know, lost two really critical elections. You've

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Speaker 8: really seen sort of a historic low in terms of

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Speaker 8: the amount of power and influence this party has. And

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Speaker 8: somebody like Takaichi represents, you know, somebody that could potentially

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Speaker 8: you know, swing back to the right to attract younger

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Speaker 8: voters who have flocked to some of these smaller populist

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Speaker 8: outfits that you know, seem to really be capturing a

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Speaker 8: lot of the attention of those younger voters. Maybe she

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Speaker 8: appeals to that crowd and then I also think the

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Speaker 8: fact that she doesn't come from the starrried political family,

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Speaker 8: which is quite unusual for somebody with this level of

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Speaker 8: power in Japan. Her mother was a cop. She she

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Speaker 8: came from pretty sort of normal, humble beginnings here, and

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Speaker 8: I think that's something that has the potential to really,

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Speaker 8: you know, kind of resonate, particularly with some of those

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Speaker 8: younger voters.

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Speaker 4: Yeah, absolutely so.

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Speaker 2: Then in terms of other issues facing Japan, Taki she

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Speaker 2: has previously said that she would renegotiate Japan's trade deal

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Speaker 2: with the United States.

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Speaker 4: How possible is that?

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Speaker 8: Yeah, that's one that we're certainly looking out for with

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Speaker 8: a great interest. So what she was talking about just

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Speaker 8: last month was that there could be a renegotiation of

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Speaker 8: the trade deal with the US if the implementation specifically

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Speaker 8: of this really large investment fund doesn't serve Japan's interest.

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Speaker 8: So announced was part of the US Japan trade deal

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Speaker 8: was the idea of a five hundred and fifty billion

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Speaker 8: dollar investment fund US dollars a billion with a B.

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Speaker 8: And I think that that's one thing that she seems

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Speaker 8: to be open to revising. She did say after being

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Speaker 8: newly elected to lead the ruling party but you know,

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Speaker 8: it's not going to be immediately revised, but it does

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Speaker 8: seem to be something that she's certainly taken some great

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Speaker 8: interest in.

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Speaker 2: Okay, interesting, Jill, Thank you so much for your time

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Speaker 2: for being with us today. That is Bloomberg's Asian News

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Speaker 2: Desk Managing editor jilld.

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Speaker 4: Sis.

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Speaker 2: Stay with us. More from Bloomberg daybaqube coming up after this.

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Speaker 3: Now to some exclusive Bloomberg reporting on the collapse of

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Speaker 3: financial firm Blackbrook. Back in twenty twenty, City Group and

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Speaker 3: Goldman Sachs were among the firms stung by a two

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Speaker 3: point six billion dollar trade that's now at the heart

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Speaker 3: of a London lawsuits raising questions about client checks.

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Speaker 5: Our legal reporter Luca Depparley is with us for more. Luca,

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Speaker 5: good morning.

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Speaker 3: There are lots of stories about banks making losses on

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Speaker 3: big financial trades.

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Speaker 5: What's different about this one?

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Speaker 9: So yeah, I think, particularly Bloomberg and other financial media,

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Speaker 9: we write a lot about banks or funds losing money.

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Speaker 9: But the thing that is so remarkable about this one

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Speaker 9: is who the banks lost money to. There were two

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Speaker 9: hundred and fifty million dollars of losses sustained in trading

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Speaker 9: with a company that had no real offices, seemingly only

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Speaker 9: one real trader, this guy called Jan Ralph, and nets

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Speaker 9: assets of less than two hundred thousand pounds in the

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Speaker 9: most brutal terms. The trade that cost all of these

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Speaker 9: banks this money was lever at about eleven thousand to one.

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Speaker 9: It's not really like any of the losses banks take

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Speaker 9: that I've seen or written about before.

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Speaker 4: Okay, so what do we know then about Yan?

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Speaker 9: Ralph so Yan started Blackbrook a little less than a

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Speaker 9: decade ago. He had a sort of peripatetic career in finance,

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Speaker 9: going through a few different firms. He does have a

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Speaker 9: public profile on social media. He's given interviews to newspapers

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Speaker 9: talking about his love of ferraris, making flights around Asia

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Speaker 9: on a plane that he owns. There's a little bit

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Speaker 9: about collecting watches. But people who follow financial markets have

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Speaker 9: never heard of him and his company. And that's important

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Speaker 9: because a lot of people would like to think that

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Speaker 9: pay attention to markets, that if someone's got a two

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Speaker 9: point six billion dollars short bet on treasuries, you would

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Speaker 9: have at least heard of them. Despite being almost totally unknown,

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Speaker 9: Ralph Ralph and his company were able to take on

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Speaker 9: one of the most lever trades that I think people

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Speaker 9: have ever heard of.

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Speaker 3: So why were the banks willing to allow this tiny

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Speaker 3: firm to make such a large trade.

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Speaker 9: So that's a question that I still like to know

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Speaker 9: the answer to. I'm not sure we totally got to

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Speaker 9: the answer in our piece. My colleague Donald and I

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Speaker 9: spoke to a lot of people with knowledge of Ralph

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Speaker 9: and his trades, but very few of them could even

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Speaker 9: begin to understand how Blackbrook was even allowed to make

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Speaker 9: trades like this. The trades were done way back in

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Speaker 9: twenty twenty. Coronavirus was causing a lot of panic and

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Speaker 9: financial markets things were moving around a lot, But that

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Speaker 9: still doesn't really explain why the banks were offering this

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Speaker 9: tiny firm such a huge amount of leverage, why they

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Speaker 9: were effectively lending so much money to this firm. For

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Speaker 9: the banks that lost money, which are big banks like City, Goldman, Wells, Fargo,

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Speaker 9: you have to wonder how their due diligence enabled Blackbrook

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Speaker 9: to take these enormous positions.

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Speaker 2: So what happens now? Will the banks get any of

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Speaker 2: their money back? The money that they lost?

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Speaker 9: So black Book collapsed, as you can imagine after it

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Speaker 9: incurred all these losses and the running of the company

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Speaker 9: was taken over by administrators. The administrators are there effectively

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Speaker 9: to make sure that creditors can get as much money

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Speaker 9: as they can back from the collapse. As they became

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Speaker 9: liquidators and looked into the running of the company by Ralph,

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Speaker 9: they decided that they would take a suit against him

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Speaker 9: for wrongful trading in London. They want him to repay

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Speaker 9: something close to one hundred and eighty million pounds, but

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Speaker 9: it'll be up to a judge to decide whether whether

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Speaker 9: he has to stump up that cash.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Streets and beyond.

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Speaker 5: I'm Caroline Hepka and I'm Stephen. Carol.

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Speaker 3: Join us again tomorrow morning for all the news you

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Speaker 3: need to start your day right here on Bloomberg day Break.

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Speaker 5: Europe