WEBVTT - Daybreak Weekend: US CPI, Europe Summer, Japan GDP 0:00:00.600 --> 0:00:08.320 Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.960 --> 0:00:13.360 This is Bloomberg day Break Weekend, our global look at 0:00:13.400 --> 0:00:15.480 the top stories in the coming week from our Daybreak 0:00:15.480 --> 0:00:18.040 anchors all around the world. Straight Ahead on the program, 0:00:18.079 --> 0:00:20.560 we look ahead to some key inflation data in the 0:00:20.640 --> 0:00:24.360 US and how it could impact FED policy. I'm Tom 0:00:24.400 --> 0:00:25.400 Busby in New York. 0:00:25.680 --> 0:00:29.280 I'm Caroline Hepgre in London. While we're examining the consequences 0:00:29.320 --> 0:00:31.360 of Europe's sweltering summer. 0:00:31.720 --> 0:00:34.680 I'm Dog Prisner looking at Japan's role in recent market 0:00:34.760 --> 0:00:37.240 volatility and where things may go from here. 0:00:38.440 --> 0:00:42.440 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.479 --> 0:00:46.280 Eleve Them Free, Ow New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.600 --> 0:00:50.640 Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, 0:00:50.880 --> 0:00:55.080 DAB Digital Radio, London, Sirius XM one nineteen and around 0:00:55.160 --> 0:00:57.760 the world on Bloomberg Radio dot Com and via the 0:00:57.800 --> 0:00:59.040 Bloomberg Business App. 0:01:03.080 --> 0:01:05.199 Good day to you. I'm Tom Busby. We begin today's 0:01:05.240 --> 0:01:07.679 program with some key economic data here in the US 0:01:08.080 --> 0:01:11.720 out this week, including the July Consumer price Index on Wednesday, 0:01:12.160 --> 0:01:15.959 retail sales for that same month on Thursday. Well, after 0:01:16.000 --> 0:01:19.600 some incredible volatility in the markets last week, how might 0:01:19.720 --> 0:01:23.600 this affect the next actions by the Federal Reserve, a 0:01:23.640 --> 0:01:27.000 policy meeting less than five weeks away. Now for more, 0:01:27.360 --> 0:01:32.319 we're joined by Stuart paul, Us, economist with Bloomberg Economics. Well, Stuart, 0:01:32.360 --> 0:01:35.800 let's start with inflation. What that July CPI number may bring. 0:01:35.840 --> 0:01:36.960 What do you expect to see. 0:01:37.160 --> 0:01:40.800 We're expecting to see headline inflation slowing to an annual 0:01:40.840 --> 0:01:44.000 pace of two point nine percent in July from three 0:01:44.080 --> 0:01:47.200 percent in June. The core is going to slow a 0:01:47.240 --> 0:01:49.640 little bit as well, to three point two percent from 0:01:49.680 --> 0:01:53.560 three point three percent in June. Now, consumers are looking 0:01:53.560 --> 0:01:56.760 for discounts, and they're finding them when they look online, 0:01:56.880 --> 0:01:59.200 when they go to auto dealerships. But some of the 0:01:59.240 --> 0:02:01.920 biggest ticket items, some of the items that take up 0:02:01.920 --> 0:02:05.360 the most space in budgets, like shelter for example, it's 0:02:05.440 --> 0:02:08.120 just going to be a slow disinflation process. And in fact, 0:02:08.360 --> 0:02:10.800 we're expecting to see a little bit of an uptick 0:02:10.840 --> 0:02:13.760 in the pace of rent and owner's equivalent of rent 0:02:13.840 --> 0:02:17.799 inflation in the July data. And the big swing factor 0:02:17.840 --> 0:02:21.400 when it comes to inflation has been hotels, surprisingly, which 0:02:21.480 --> 0:02:24.240 created a lot of drag in June. We think it's 0:02:24.240 --> 0:02:26.600 going to create a little bit less drag in the 0:02:26.680 --> 0:02:29.680 July data, and that's going to booy the core just 0:02:29.720 --> 0:02:30.240 a little bit. 0:02:30.520 --> 0:02:33.280 Well, the housing market, I mean, what an uneven You 0:02:33.280 --> 0:02:35.200 don't know what to expect month to month, but one 0:02:35.200 --> 0:02:38.760 thing is certain, it's more expensive than it's ever been. 0:02:39.280 --> 0:02:41.680 Rates are still elevated, although there's hope that they're going 0:02:41.760 --> 0:02:44.679 to go down. So travel demand, which lays right into 0:02:44.840 --> 0:02:48.239 what you said about hotels, I mean, we have seen 0:02:48.320 --> 0:02:52.359 signs that people are pulling back now fewer trip Advisor 0:02:52.400 --> 0:02:56.200 says fewer bookings, Airbnb says fewer bookings, so they're bracing 0:02:56.320 --> 0:02:57.520 for a pullback. 0:02:57.320 --> 0:03:00.160 That's right. So consumers are becoming quite a bit more 0:03:00.160 --> 0:03:03.239 discerning in their spending habits. When we look at things 0:03:03.280 --> 0:03:05.880 like you said Airbnb, or you look at some of 0:03:05.919 --> 0:03:09.040 the online travel booking agencies, you're definitely seeing some of 0:03:09.040 --> 0:03:11.640 the swings month to month. If you look at where 0:03:11.680 --> 0:03:15.160 consumers are really starting to tighten their belt, it's in 0:03:15.240 --> 0:03:19.000 things like food services also very similar to travel and accommodations. 0:03:19.240 --> 0:03:21.320 Consumers are looking to rein in on some of those 0:03:21.360 --> 0:03:25.119 discretionary services categories in addition to some of the more 0:03:25.200 --> 0:03:28.119 interest sensitive spending categories like autos. 0:03:28.440 --> 0:03:31.600 There's groceries, and there's food service, and there are all 0:03:31.680 --> 0:03:34.320 kinds of restaurants from fast food, quick service, sit down, 0:03:34.320 --> 0:03:38.560 white tablecloth. Where are you seeing the big changes in food? 0:03:38.920 --> 0:03:41.880 It's interesting. So when we listen into earnings calls, when 0:03:41.920 --> 0:03:45.120 we look at earnings reports, we see a lot of 0:03:45.160 --> 0:03:49.400 reports of dining services companies that are starting to offer 0:03:49.480 --> 0:03:52.800 discount meals and that are starting to order discount opportunities 0:03:52.800 --> 0:03:56.520 and they're actually seeing some more traction with consumers. When 0:03:56.560 --> 0:03:59.840 we look on the higher end, those sort of re 0:04:00.080 --> 0:04:02.480 tailers and those chains are facing a little bit more 0:04:02.600 --> 0:04:06.000 headwinds and consumers are rotating a bit more back to 0:04:06.160 --> 0:04:09.000 cooking at home, dining at home. We're expecting to see 0:04:09.000 --> 0:04:11.840 about zero point one percent inflation when it comes to 0:04:12.000 --> 0:04:14.880 groceries during the month. That might not sound like a lot, 0:04:14.920 --> 0:04:17.880 but when consumers are really pinching pennies and they're raining 0:04:17.920 --> 0:04:22.560 and they're spending on food services, that inflation in groceries 0:04:23.000 --> 0:04:26.240 is going to is going to weigh on consumers. 0:04:27.120 --> 0:04:29.080 Well, I want to go back to something you mentioned before, 0:04:29.120 --> 0:04:32.320 just briefly, and that is autos again very uneven what 0:04:32.360 --> 0:04:35.920 we've seen with used car prices, new car prices. Now 0:04:36.000 --> 0:04:38.920 we have all the ads are out there, it's August, now, 0:04:38.960 --> 0:04:41.200 all the twenty five models are coming in the twenty four. 0:04:41.240 --> 0:04:44.360 They want to get rid of what's different now on 0:04:44.520 --> 0:04:45.360 auto pricing. 0:04:45.520 --> 0:04:47.599 There are a few factors at play here, and one 0:04:47.600 --> 0:04:50.520 of them is still the cyber attack on auto dealers 0:04:50.520 --> 0:04:53.719 that we saw in June, and so far in July, 0:04:54.120 --> 0:04:56.039 we've seen a bit of a rebound, about a three 0:04:56.080 --> 0:04:59.320 point five percent rebound in the pace of auto sales 0:04:59.440 --> 0:05:02.880 in July. So as those computers, those computer systems came 0:05:02.920 --> 0:05:07.040 back online, we saw auto dealers starting to sell more vehicles. 0:05:07.640 --> 0:05:11.480 But it also looks like they are offering discounts in 0:05:11.600 --> 0:05:14.719 part to offset the effect of higher interest expense for 0:05:14.800 --> 0:05:18.400 folks who are financing their cars. So we are expecting 0:05:18.400 --> 0:05:21.159 to see about one and a half percent decline in 0:05:21.200 --> 0:05:23.880 the price of autos, in the price of used autos 0:05:23.880 --> 0:05:27.800 in particular in the CPI report, But again the increase 0:05:28.000 --> 0:05:32.960 in sales volumes will probably buoy retail sales. Headline retail 0:05:33.040 --> 0:05:35.440 sales in the July report. 0:05:35.240 --> 0:05:38.240 Also out this week. Retail sales for July, what do 0:05:38.279 --> 0:05:38.960 you expect to see? 0:05:38.960 --> 0:05:39.400 Overall? 0:05:39.560 --> 0:05:41.919 The headline number is going to look pretty good again 0:05:41.960 --> 0:05:46.440 because of that rebound in sales volumes of autos. We're 0:05:46.480 --> 0:05:50.760 expecting to see zero point four percent increase in nominal 0:05:50.800 --> 0:05:55.320 retail sales in July. That's up from zero growth in June. 0:05:55.400 --> 0:05:57.640 So the headline's going to look pretty good. When you 0:05:57.680 --> 0:06:00.919 strip out some of the more voluable categories though, like autos, 0:06:00.960 --> 0:06:04.360 like gasoline, like building materials and food services, I think 0:06:04.360 --> 0:06:06.359 we're actually going to see a decline. So that's what 0:06:06.400 --> 0:06:09.480 we call the control group for retail sales, and it's 0:06:09.480 --> 0:06:12.760 a pretty good indicator of consumer spending on goods within GDP. 0:06:12.920 --> 0:06:15.560 So that control group for retail sales, we think is 0:06:15.800 --> 0:06:18.720 going to decline about a quarter percentage point in the 0:06:18.800 --> 0:06:22.479 July data. And that's a material decline when you consider 0:06:23.360 --> 0:06:27.480 a June increase of nearly one percent. And that's because again, 0:06:27.600 --> 0:06:31.080 people are relying on their credit cards a little bit less, 0:06:31.240 --> 0:06:34.200 They have less access to credit. When they do look 0:06:34.440 --> 0:06:37.640 to take out their credit card, they're starting to pinch 0:06:37.680 --> 0:06:40.560 pennies quite a bit more, and again they're looking for 0:06:40.640 --> 0:06:43.000 discounts where they can get it, So they're not going 0:06:43.040 --> 0:06:45.400 to be spending lavishly on some big ticket items like 0:06:45.560 --> 0:06:48.960 washing machines. Instead, they're going to be looking for discounts. 0:06:49.040 --> 0:06:51.240 We think that'll show up in the control group sales 0:06:51.320 --> 0:06:51.680 boy our. 0:06:51.800 --> 0:06:56.360 Thanks to Stuart Paul, us economists with Bloomberg Economics. We 0:06:56.440 --> 0:06:58.960 continue with that discussion about the health of the US 0:06:59.000 --> 0:07:01.600 consumer with a look at head to some key earnings 0:07:01.640 --> 0:07:04.960 this Tuesday, second quarter earnings from the nation's biggest home 0:07:05.040 --> 0:07:08.920 improvement chain, home Depot. On Thursday, Q two earnings from 0:07:08.920 --> 0:07:12.240 the world's biggest retailer, Walmart. To help us break down 0:07:12.240 --> 0:07:15.360 what those results could tell us, we're joined by Bloomberg 0:07:15.400 --> 0:07:19.120 retail reporter Jaywon Kong. Jaywan, thank you for joining us. 0:07:19.120 --> 0:07:22.280 And Home Depot often seen as a proxy for the 0:07:22.360 --> 0:07:25.320 US housing market. So what do you expect to see 0:07:25.520 --> 0:07:26.960 from Home Depot's earnings. 0:07:27.600 --> 0:07:32.440 Yeah, with Home Depot, consumers just aren't buying dick ticket 0:07:32.440 --> 0:07:35.840 home products or projects right now, and we expect to 0:07:35.880 --> 0:07:41.720 see another challenging quarter. We also anticipate to hear that 0:07:41.880 --> 0:07:45.400 the business will remain challenging in the coming months, even 0:07:45.600 --> 0:07:48.280 if there are rate cuts, because there's typically a lag 0:07:48.480 --> 0:07:52.880 in consumer spending. You know, as you said, the housing 0:07:52.880 --> 0:07:56.600 market remains tough and people are staying on the sidelines 0:07:56.680 --> 0:08:00.640 because of you know, high interest rates. They're just spending 0:08:00.720 --> 0:08:05.520 less on larger descriptionary projects and instead spending on things 0:08:05.560 --> 0:08:08.840 that cost less, like you know, gardens, lawns. 0:08:08.960 --> 0:08:12.080 All right, So inflation, high borrowing costs a lot of 0:08:12.560 --> 0:08:15.920 economic uncertainty. Well, I guess when you're hiring a contractor, 0:08:16.240 --> 0:08:19.200 it involves all of that, and so maybe you're not 0:08:19.200 --> 0:08:21.160 going to redo the bathroom or the kitchen this year. 0:08:21.600 --> 0:08:24.760 Yeah, it's you know, spending you know, tens of thousands 0:08:24.800 --> 0:08:28.680 of dollars on a kitchen. People are either holding off 0:08:28.960 --> 0:08:31.920 or you know, they're choosing to do smaller at the 0:08:31.960 --> 0:08:36.439 II projects. And it's something that the company has talked 0:08:36.440 --> 0:08:40.560 about in recent quarters, and you know, we anticipate to 0:08:40.600 --> 0:08:45.320 hear that narrative again this quarter. You know, I think 0:08:45.400 --> 0:08:48.680 investors expect that there could be a pop in the 0:08:48.760 --> 0:08:52.680 stock whenever the said you know, decides to cut race. 0:08:52.920 --> 0:08:58.040 But you know, it's not like people start spending immediately 0:08:58.240 --> 0:09:01.719 after the rate cuts. So I think this quarter and 0:09:02.200 --> 0:09:04.360 the rest of the year it'll be pretty challenging. 0:09:05.240 --> 0:09:09.160 Now, combined with a lack of housing turnover. This you 0:09:09.200 --> 0:09:11.079 expect to see a bit of a pullback in home 0:09:11.120 --> 0:09:14.400 depot spending. What does it tell us about the housing market? 0:09:14.480 --> 0:09:16.640 And I know you're not the housing expert, you're a 0:09:16.679 --> 0:09:20.440 retail expert, but I mean with home depot with lows, 0:09:20.559 --> 0:09:23.480 with target with you know, it's really got to impact 0:09:23.559 --> 0:09:24.880 consumer spending overall. 0:09:25.520 --> 0:09:30.839 Yeah, what we've heard in recent quarters is that consumers 0:09:30.880 --> 0:09:36.319 are being selective. You know, they're choosing to prioritize what 0:09:36.360 --> 0:09:39.679 they need versus what they want. So that's you know, 0:09:39.800 --> 0:09:46.360 translated to pullback on discretionary you know, products projects, and 0:09:47.520 --> 0:09:51.040 you know, generally low to middle income consumers have been 0:09:52.000 --> 0:09:55.040 more stretched than under more pressure, and you know, upper 0:09:55.160 --> 0:09:59.560 income consumers are still spending. So you know, that's sort 0:09:59.559 --> 0:10:04.600 of the pick or that we've we've seen from these retailers, 0:10:04.640 --> 0:10:09.640 and it'll be pretty similar this this quarter as well. 0:10:09.679 --> 0:10:11.559 And you know, of course we'll be on the lookout 0:10:11.640 --> 0:10:16.120 for any youth signals about how people are spending. You know, 0:10:16.160 --> 0:10:20.000 what they're buying and you know how they're choosing to prioritize. 0:10:20.160 --> 0:10:22.800 Well, then let's move on because that's a great segue 0:10:22.960 --> 0:10:26.360 into Walmart, where it looks like it is all about 0:10:26.520 --> 0:10:30.080 value for customers and Walmart is providing it. So what 0:10:30.120 --> 0:10:32.120 do you expect to see from Walmart? 0:10:32.559 --> 0:10:36.080 Yeah? With Walmart, you know right now is sort of 0:10:36.120 --> 0:10:38.200 you know, their time, it's you know, most of their 0:10:38.200 --> 0:10:43.320 business is in essentials. You know, they are super focused 0:10:43.320 --> 0:10:48.040 on low prices, and we expect them to deliver another good, 0:10:48.400 --> 0:10:53.880 good quarter because of this. And with grocery at Walmart, 0:10:54.000 --> 0:10:55.960 you know, it goes back to what we were talking 0:10:56.000 --> 0:10:59.240 about a bit ago, which is that people are prioritizing 0:10:59.520 --> 0:11:03.440 what they needed. So grocery has been a bright spot 0:11:03.559 --> 0:11:07.559 for for Walmart on and you know in other categories, 0:11:09.080 --> 0:11:12.800 you know, like general merchandise have been have been softer, 0:11:13.840 --> 0:11:18.400 and you know, we're seeing consumers search for value, you know, 0:11:18.480 --> 0:11:21.200 buying things that are on sale or buying things that 0:11:21.240 --> 0:11:24.240 they think are you know, good deal. 0:11:25.360 --> 0:11:28.160 Who is raining and their spending and what do we 0:11:28.200 --> 0:11:29.480 continue to spend money on? 0:11:30.040 --> 0:11:35.040 Yeah, so with consumers, you know, they have been resilient 0:11:35.280 --> 0:11:39.640 in that they are still spending, you know, even with 0:11:39.800 --> 0:11:45.120 years of inflation. That being said, you know, they are 0:11:45.360 --> 0:11:48.360 being what a lot of these companies have called choiceful. 0:11:49.080 --> 0:11:52.640 You know, they are being selective. You know they're looking 0:11:52.679 --> 0:11:56.680 for areas to trade down, so to speak. So you know, 0:11:56.720 --> 0:12:00.200 instead of buying if you buy chicken or you know 0:12:00.320 --> 0:12:04.240 inspetifying name brands, you buy straw brands. So I think 0:12:04.240 --> 0:12:09.520 consumers are looking for areas to save money. And you know, 0:12:09.559 --> 0:12:14.040 we're seeing that comes through in grocery shopping and you 0:12:14.040 --> 0:12:16.600 know in other areas of merchandise. 0:12:17.240 --> 0:12:19.480 Well, we should learn a lot earnings this week from 0:12:19.480 --> 0:12:22.679 two of the biggies Home Depot and Walmart Our thanks 0:12:22.679 --> 0:12:26.679 to Jaywan Kong, Bloomberg retail reporter. Coming up on Bloomberg 0:12:26.720 --> 0:12:30.640 day Break weekend, we'll examine the consequences of Europe's sweltering summer. 0:12:31.200 --> 0:12:44.840 I'm Tom Busby, and this is Bloomberg. This is Bloomberg 0:12:44.880 --> 0:12:46.960 day Break Weekend, our global look ahead at the top 0:12:46.960 --> 0:12:49.840 stories for investors in the coming week. I'm Tom Busby 0:12:49.840 --> 0:12:52.120 in New York. Up later in our program, we'll look 0:12:52.160 --> 0:12:55.840 ahead to the latest reading of Japan's GDP. But first, 0:12:56.200 --> 0:12:58.560 Europe is heating up with high tempts and excess of 0:12:58.640 --> 0:13:02.440 forty degrees celsius this summer, a huge uptick from the norm, 0:13:02.800 --> 0:13:06.439 with climate chains a likely culprit of the Mediterranean's tropical makeover. 0:13:06.600 --> 0:13:09.600 Can the insurance industry keep up for more? Let's go 0:13:09.640 --> 0:13:12.960 to London and bring in Bloomberg daybreak, europe banker Caroline 0:13:12.960 --> 0:13:14.160 hepgar Tom. 0:13:14.400 --> 0:13:19.160 Climate change is increasing the frequency and intensity of heat waves, 0:13:19.200 --> 0:13:24.520 bringing extreme weather events from flooding to wildfires across Europe. 0:13:24.720 --> 0:13:28.800 Just last month, in Greece, wildfires were found by strong winds. 0:13:28.880 --> 0:13:32.800 In the Balkans, you saw burning forests and homes, which 0:13:32.840 --> 0:13:36.720 also forced the evacuation of a resort town in Albania. 0:13:37.000 --> 0:13:40.360 In North Macedonia, a blaze near the Greek border burned 0:13:40.440 --> 0:13:44.280 five houses and led to evacuations, and the damage spread 0:13:44.320 --> 0:13:49.760 to Croatia, a popular holiday destination, whilst in Bulgaria firefighters 0:13:49.800 --> 0:13:52.920 had to stop fighting a wildfire in the mountains near 0:13:52.960 --> 0:13:56.520 the Greek border because of land mines dating back to 0:13:56.559 --> 0:14:00.800 the Cold War era. The volatile weather condition in Europe 0:14:00.880 --> 0:14:04.600 really show no sign of abating in the northwest of Europe, 0:14:04.600 --> 0:14:08.640 in France, in Germany, in the UK we're expected to 0:14:08.679 --> 0:14:12.240 see the hottest temperatures of the summer in the next 0:14:12.280 --> 0:14:17.480 few days. Popular tourist destinations are on high alert for fires. 0:14:17.880 --> 0:14:21.840 The growing prevalence of extreme weather conditions is weighing heavily 0:14:21.880 --> 0:14:26.360 also on the insurance sector, often charged with the clear up. 0:14:26.800 --> 0:14:30.400 Navigating the consequences is something that we've been discussing with 0:14:30.520 --> 0:14:35.880 the Munich RECFO Christophe Jureka. He says that the unexpected 0:14:35.960 --> 0:14:39.440 conditions in Europe are affecting his company's bottom line. 0:14:39.560 --> 0:14:42.640 Indeed, we have very pleasing results again this quarter, and 0:14:42.840 --> 0:14:45.200 after six months we are now already at three point 0:14:45.240 --> 0:14:47.680 eight billion euros of a net result, by the way, 0:14:47.720 --> 0:14:50.440 the highest net result ever we had after six months, 0:14:50.480 --> 0:14:53.920 so very well on twek to achieve all for your guidance. Indeed, 0:14:54.600 --> 0:14:58.240 now the question is why didn't be increase it? Probably well, 0:14:58.400 --> 0:15:01.400 I would say that's the typical Munich conservativism. We are 0:15:01.440 --> 0:15:05.720 cautious until the very end, and you know, the third 0:15:05.760 --> 0:15:09.160 and the fourth quarter are very cut heavy in our planning. 0:15:09.600 --> 0:15:12.120 So therefore we thought, let's give it another quarter and 0:15:12.320 --> 0:15:16.040 see how the development goes and keep the guidance unchanged 0:15:16.040 --> 0:15:19.280 for now. But what is very clear, were likely good 0:15:19.280 --> 0:15:22.600 of it of overachieving our target has significantly increased? 0:15:24.160 --> 0:15:26.520 Okay, Well that's what it sounds like. Okay, so that's important. 0:15:26.560 --> 0:15:30.480 The likelihood of overachieving on that five billion europrofits target 0:15:30.800 --> 0:15:33.400 has increased. That's an important line I think for investors 0:15:33.520 --> 0:15:35.960 and talk to us about some of these extreme weather events. 0:15:36.000 --> 0:15:39.360 Then there are higher payment claims coming through for insurers 0:15:39.600 --> 0:15:43.720 and reinsurers. Are there some regions now that are becoming uninsurable? 0:15:45.640 --> 0:15:45.920 Well. 0:15:45.960 --> 0:15:48.720 Indeed, in the second quarter again we had a relatively 0:15:48.800 --> 0:15:52.560 high share of cut losses, slightly above our budget or 0:15:52.600 --> 0:15:55.680 average budget is fourteen percent per quarter this time, whilst 0:15:55.680 --> 0:15:59.160 it was fourteen point four, so slightly higher. And what 0:15:59.360 --> 0:16:02.440 actually happened was that there was not this one single 0:16:02.440 --> 0:16:06.000 headline event, you know, affecting us to that extent, but 0:16:06.080 --> 0:16:09.280 it was a number of smaller, mid sized events which 0:16:09.320 --> 0:16:12.680 then added up to that overall amount. The most significant 0:16:12.680 --> 0:16:17.040 fast disc quarter was a flood in southern Germany which 0:16:17.080 --> 0:16:20.240 which all together cost us in reinsurance around two hundred 0:16:20.280 --> 0:16:23.760 million euros. But then there were other events across the globe, 0:16:23.760 --> 0:16:27.000 all of them rather mid sized, which then finally added 0:16:27.080 --> 0:16:28.520 up to the to the number. So in a way 0:16:28.640 --> 0:16:32.040 busy quarter with with not this single so significant event 0:16:32.120 --> 0:16:34.760 that it would have made headline headlines in the in 0:16:34.800 --> 0:16:35.440 the neuse. 0:16:36.640 --> 0:16:39.400 Is it is it your assessment there is sufficient capacity 0:16:39.680 --> 0:16:43.040 within the insurance sector to be able to make up 0:16:43.080 --> 0:16:45.600 for what is expected to be the increased claims around 0:16:45.960 --> 0:16:46.760 climate change. 0:16:48.280 --> 0:16:51.400 So our clear answer is yes, there is enough capacity, 0:16:51.480 --> 0:16:55.080 So we are very happy to deploy capacity into cut risks, 0:16:56.120 --> 0:16:58.880 always under the precondition, of course that the prices in 0:16:58.920 --> 0:17:01.680 the terms and conditions have to have to be reasonable 0:17:01.720 --> 0:17:05.119 also from a rene insurance perspective. But under that precondition, 0:17:05.359 --> 0:17:08.359 absolutely there is that there's sufficient capacity in the market 0:17:08.560 --> 0:17:11.879 and and and we are very happy to deploying more cognacity. 0:17:12.560 --> 0:17:14.600 Your business men, Ray has been a leader in terms 0:17:14.640 --> 0:17:17.640 of cybersecurity solutions within the insurance space. How how big 0:17:17.640 --> 0:17:21.280 an impact was the crowd strike event within the industry 0:17:21.280 --> 0:17:21.600 and for. 0:17:21.600 --> 0:17:24.919 You, that's a very good question. I would very I 0:17:24.920 --> 0:17:27.920 would love to know myself, but it's very early days, 0:17:28.560 --> 0:17:31.560 so I cannot give you any any internal insights in 0:17:31.640 --> 0:17:34.840 any internal numbers. Yet we're still assessing what's was going on. 0:17:35.840 --> 0:17:39.280 I think the the the the industry estimates as for 0:17:39.400 --> 0:17:42.760 example just shown in the media, they have come down 0:17:42.880 --> 0:17:46.720 a bit recently. But any anyways, it's early days. We 0:17:46.840 --> 0:17:49.879 have to you know, really assess it, wait for the 0:17:49.920 --> 0:17:53.080 collect claim stotifications and from from our clients. And then 0:17:53.119 --> 0:17:54.560 we'll see that was. 0:17:54.560 --> 0:18:00.000 The munich ree CFO Christopherjureka. So are Europe's soaring temperature 0:18:00.160 --> 0:18:03.760 is here to stay? What does it mean for insurers 0:18:03.800 --> 0:18:07.399 on the one hand, but also for local people, for businesses, 0:18:07.400 --> 0:18:10.879 for holidaymakers, and so much more. I've been talking about 0:18:10.920 --> 0:18:14.840 that question with Bloomberg's energy reporter Aiman Farhat. 0:18:15.280 --> 0:18:17.200 I mean in the last few years, I mean definitely 0:18:17.240 --> 0:18:19.280 last summer and the summer before, we've been seeing these 0:18:19.320 --> 0:18:22.000 increasingly record temperatures. I mean, you know you talked about 0:18:22.000 --> 0:18:24.000 in excess of foy degrees. We actually reached even forty 0:18:24.000 --> 0:18:26.639 six degrees celsius in Spain. I think that was last week. 0:18:26.920 --> 0:18:28.399 And I think the important thing is it's not just 0:18:28.480 --> 0:18:32.280 the high temperatures, it's also the intense heat for longer periods, 0:18:32.480 --> 0:18:36.400 affecting people's health, as you said, affecting wildfires. So it's 0:18:36.400 --> 0:18:39.080 definitely getting more extreme, and we're seeing that that's kind 0:18:39.080 --> 0:18:41.560 of summer period. Start earlier. We were already seeing heat 0:18:41.560 --> 0:18:44.000 waves in Spain in April and finish even later. We're 0:18:44.040 --> 0:18:47.480 expecting this heat evening continue into October for some places. 0:18:48.160 --> 0:18:52.360 Okay, so the scorching weather is back then for another summer. 0:18:52.600 --> 0:18:55.920 How prepared are parts of Europe for this? I mean, 0:18:56.000 --> 0:19:00.960 some places in Europe are fairly accustomed to wildfires, but 0:19:01.280 --> 0:19:03.280 how ready are Greece and other places? 0:19:04.200 --> 0:19:05.960 Yeah, I mean Greece has definitely been the center of 0:19:06.040 --> 0:19:08.160 kind of our wildfire coverage this summer. You know, every 0:19:08.160 --> 0:19:10.680 single day we have new blazers, you know, on very 0:19:10.720 --> 0:19:14.120 popular tourist spots of popular islands as well, but also 0:19:14.280 --> 0:19:17.040 on the mainland. I mean, on the worst days in 0:19:17.040 --> 0:19:19.200 Greece you will have you know, maybe sixty new blazers, 0:19:19.560 --> 0:19:21.679 but they are quite responsive. One thing that's quite interesting 0:19:21.720 --> 0:19:23.399 is there's much more of a kind of shared approach 0:19:23.400 --> 0:19:25.600 in Europe, where you know, planes will be sent from 0:19:26.200 --> 0:19:29.040 France or Italy to Greece to help out with wildfires. 0:19:29.400 --> 0:19:31.080 But at the same time, you know, it is quite 0:19:31.080 --> 0:19:33.600 worrying when lots of countries in that area are under 0:19:33.640 --> 0:19:36.160 extreme risk of wildfire. Says, you know, something very small 0:19:36.160 --> 0:19:37.560 could tip it all over to the edge. 0:19:38.160 --> 0:19:40.919 Okay, So if it's a difficult wildfast season, then what 0:19:40.960 --> 0:19:44.480 sort of tactics have been developed? You say, sharing equipment 0:19:44.560 --> 0:19:48.879 is one. How else can countries in Europe try to 0:19:48.880 --> 0:19:50.760 curb the damage? 0:19:51.080 --> 0:19:52.800 Yeah, I mean I think it's definitely though the shard 0:19:52.840 --> 0:19:54.680 its equipment is a big factor, but also there's a 0:19:54.720 --> 0:19:57.200 lot more monitoring now. I mean, we have very advanced forecasts, 0:19:57.240 --> 0:19:58.879 you know. The one thing is that wildfires are kind 0:19:58.880 --> 0:20:02.359 of driven by dry conditions, by specific kinds of wind, 0:20:02.640 --> 0:20:04.920 and by quite advanced marching technique. You can really tell 0:20:04.960 --> 0:20:07.119 almost exactly where they're going to take place, and then 0:20:07.160 --> 0:20:09.919 using southline imagery, European kind of forecasters can also tell 0:20:09.960 --> 0:20:12.520 where the wildfires actually are, how they're doing with kind 0:20:12.520 --> 0:20:15.320 of controlling blazers, and especially for the bigger, bigger issues, 0:20:15.359 --> 0:20:17.520 that can really help to just a market situation and 0:20:17.560 --> 0:20:20.159 to make sure that races are being used efficiently. 0:20:20.920 --> 0:20:23.440 Do you think that there's a risk that wildfires could 0:20:23.480 --> 0:20:25.800 spread further north? I mean, let's say to the UK. 0:20:26.200 --> 0:20:28.160 Would we be equipped to deal with them, and would 0:20:28.200 --> 0:20:31.200 it get hot enough dry enough here for that to happen? 0:20:32.320 --> 0:20:34.080 Yeah, So, I mean I'm kind of checking these wildfire 0:20:34.080 --> 0:20:35.720 maps almost every single day to see what it's going 0:20:35.760 --> 0:20:37.560 to look like, and actually into next week there was 0:20:37.560 --> 0:20:39.280 an increased risk in the UK. We've seen that a 0:20:39.280 --> 0:20:40.840 few times a season where you kind of have this 0:20:40.960 --> 0:20:42.600 high or very high wildfire risk. 0:20:42.880 --> 0:20:43.040 Now. 0:20:43.040 --> 0:20:44.480 Back in twenty twenty two, you know, we had the 0:20:44.480 --> 0:20:46.480 hotest day ever and on that day we had some 0:20:46.560 --> 0:20:49.360 wildfires in London. About twenty homes are destroyed. And since 0:20:49.400 --> 0:20:52.199 then there's definitely been a much bigger concern about wildfires 0:20:52.240 --> 0:20:54.560 in London and in the UK, and there's been lots 0:20:54.600 --> 0:20:56.920 of consultations. There was kind of a whole kind of 0:20:56.920 --> 0:20:58.520 period this year where there was people from you know, 0:20:58.640 --> 0:21:01.480 from fire agencies and Spain, in France and Greece coming 0:21:01.520 --> 0:21:03.320 to London and giving their advice. In the end that 0:21:03.359 --> 0:21:06.080 did lead to some changes, you know, lots of the 0:21:06.119 --> 0:21:08.560 staff in ord and now being traded specifically for wildfires. 0:21:09.080 --> 0:21:11.719 They're even giving recommendations to local council to really reduce 0:21:11.760 --> 0:21:14.000 that kind of risk of you know, of having barbecues 0:21:14.000 --> 0:21:15.879 and parks and trying to reduce all those things that 0:21:15.920 --> 0:21:18.800 could create wildfires because it is increasingly becoming a problem 0:21:18.880 --> 0:21:20.639 in the UK. We are seeing hot of summers. We 0:21:20.680 --> 0:21:22.159 are seeing it's not just about hot of summer, it's 0:21:22.160 --> 0:21:24.560 about having those specific days where the heat really spiked. 0:21:24.600 --> 0:21:26.120 As you said, you know into next week there will 0:21:26.119 --> 0:21:28.080 be some days where it could reach thirty three degrees 0:21:28.080 --> 0:21:30.080 and although that doesn't seem too hot, that can be 0:21:30.200 --> 0:21:32.040 enough to course some wildfires. 0:21:32.720 --> 0:21:37.520 So then also the other big market that is involved 0:21:37.520 --> 0:21:39.720 in this is insurance in you know, the homes you 0:21:39.760 --> 0:21:42.080 talk about being destroyed, I mean, that's all of that 0:21:42.119 --> 0:21:46.359 has huge insurance implications. How are they dealing with the 0:21:46.400 --> 0:21:49.000 optic and the issues around climate change? 0:21:49.520 --> 0:21:51.240 Yeah, I mean definitely when when you take a step back, 0:21:51.280 --> 0:21:54.160