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

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Speaker 2: This is the Bloomberg Daybreak You podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Thursday, the

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Speaker 2: sixth of June in London. I'm Caroline Hepke and.

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Speaker 1: I'm Stephen Carroll. Coming up today. The European Central Bank

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Speaker 1: is all but certain to cut rates in the coming hours,

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Speaker 1: but the path after that looks far less clear.

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Speaker 2: In Nvidia's value tops three trillion dollars as the AI

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Speaker 2: giants market cap surges past that of Apple.

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Speaker 1: Plus sun Wind and abundant land of attracted serious European

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Speaker 1: investment to Namibia. Whether the projects ever pay off as

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Speaker 1: a different story. We have a special report.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: The European Central Bank is poised to start lowering interest

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Speaker 1: rates from record highs later today. Analysts pulled by Bloomberg

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Speaker 1: almost unanimously predict rates will be reduced by a quarter

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Speaker 1: point to three point seventy five percent. Whoever, Hargreaves Landsdowne's

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Speaker 1: lead equity analyst, Sophie Lundiates says there's now increasing caution

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Speaker 1: about what the Central Bank does after today, and we've.

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Speaker 3: Been saying this for some time, and I believe that

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Speaker 3: there's there is a disconnect still between not necessarily the

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Speaker 3: timing of the first cut, but the extent of cuts.

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Speaker 3: I think, more broadly for Europe and the UK, I

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Speaker 3: don't think necessarily in matching up with market expectations.

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Speaker 1: As Sophie Loundiates highlighted, their economists expect three rate cuts

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Speaker 1: this year, but traders are now fully pricing in just two.

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Speaker 1: We'll bring you the decision live here on Bloomberg at

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Speaker 1: one fifteen pm London time, followed by ECB President Christine

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Speaker 1: Lagard's press conference thirty minutes later.

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Speaker 2: The US Competition Regulator is said to be investigating weather

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Speaker 2: a deal that Microsoft struck with AI's startup inflection may

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Speaker 2: have been structured to avoid regulatory scrutiny. The Wall Street

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Speaker 2: Journal is reporting that the Federal Trade Commission is now

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Speaker 2: seeking information about how the six hundred and fifty million

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Speaker 2: dollar deal was negotiated. Separately, The New York Times says

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Speaker 2: the regulators reached a deal that allows them to proceed

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Speaker 2: with antitrust probes into the roles played by Microsoft, Open AI,

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Speaker 2: and Nvidia in the artificial intelligence industry.

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Speaker 1: I Thought News comes as in Vidia's market valley rose

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Speaker 1: above three trillion dollars for the first time. Shares in

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Speaker 1: the AI chip giant have gained around one hundred and

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Speaker 1: forty seven percent this year, making the firm more valuable

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Speaker 1: than Apple. Steve Salznik is chief strategist at Interactive Brokers.

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Speaker 4: As early as like February twenty three, I did account

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Speaker 4: how many times I use the word AI in their

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Speaker 4: conference columns, like eighty two times or something, But they

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Speaker 4: leaned into it early. Once this AI became thus the

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Speaker 4: investment theme, in Vidia became the stock to watch. But

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Speaker 4: and at this point right now, my thesis is it's

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Speaker 4: in Vidia's market. We're all just trading in it.

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Speaker 1: Steve Salznik says one of the most impressive things about

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Speaker 1: the business is its ability to pivot to new and

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Speaker 1: emerging trends. The latest surge in the company's value comes

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Speaker 1: as the CEO Jen and Hawaiiang, said the firm plans

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Speaker 1: to upgrade its so called AI accelerators every year.

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Speaker 2: Goldman Sachs is expecting a wall of money to pour

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Speaker 2: into the stock market, setting up a continuing rally this summer.

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Speaker 2: The bank's trading desk is projecting an influx of passive

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Speaker 2: inflows in early July. A note from the firm's Global

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Speaker 2: Markets Managing Director, Scott Rubner says that markets will also

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Speaker 2: see rising interest from retail investors, which should also benefit

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Speaker 2: share prices. Goldman's calculations show roughly nine basis points of

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Speaker 2: new capital entering the market every July this year. That

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Speaker 2: would be twenty six billion dollars based on twenty nine

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Speaker 2: trillion dollars in passive assets available for investment.

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Speaker 1: UK landlord London Metric is set to join the forty

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Speaker 1: one hundred. It's part of a move that will push

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Speaker 1: online retailer Rocado and others out of Britain's blue chip gauge.

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Speaker 1: Bombergs tea Ware Adabaio has the details.

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Speaker 5: London metrics four point two two billion pound market cap

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Speaker 5: will propel the company into the UK's top index. According

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Speaker 5: to Footsie Russell, the firm will join others including dark

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Speaker 5: Trace and Vistry Group, who enter the benchmark in a

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Speaker 5: reshuffle taking effect later this month. Their success will push

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Speaker 5: storewarts of the group down the ranks, including online grosser

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Speaker 5: a Kajo, who will end its six year run in

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Speaker 5: the Footsy one hundred London Metric recorded a twenty percent

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Speaker 5: increase in profit and boosted its dividend before securing its promotion,

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Speaker 5: whilst Vistry Groups Assent follows a forty percent rise in

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Speaker 5: its shares this year. Meanwhile, a Cardostock is down fifty

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Speaker 5: two percent year to date in London tiwa Adebayo Bloomberg Radio.

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Speaker 2: In the general election campaign, Reformer UK has closed in

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Speaker 2: on the Conservative Party. In the polls, the right wing

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Speaker 2: party is within two percentage points of the Tories after

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Speaker 2: Nigel Farage returned to lead it. Bloom Exchange Wilcock has more.

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Speaker 6: There's a new word being whispered in Conservative circles, crossover.

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Speaker 6: It means the scenario almost unthinkable even a few months ago,

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Speaker 6: where a poll puts Reform ahead of them. Nagel Ferrad

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Speaker 6: is trying to make that scenario a reality.

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Speaker 1: The Conservatives have betrayed that trust. They opened up the

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Speaker 1: borders to massive immigration like we've never seen before.

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Speaker 6: Now, Conservative Party strategists will insist that the UK's first

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Speaker 6: past the post system means a lot of those polled

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Speaker 6: won't actually vote for reform on an election day, but

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Speaker 6: with Reform fielding candidates against the Tories in many seats

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Speaker 6: for the first time. Any loss votes are likely to

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Speaker 6: give the Labor Party a serious edge in London.

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Speaker 1: James Wilcock Bloomberg Radio.

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Speaker 2: Now in a moment, we're going to discuss the Europan

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Speaker 2: Central Bank rate decision with sticky inflation unraveling bets on

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Speaker 2: significant easing and of Europe. Will also have of course

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Speaker 2: all the coverage live when the decision comes in the

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Speaker 2: press conference too. But first I wanted to talk but this.

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Speaker 2: Wealthy people in the UK are racing to shelter their money.

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Speaker 2: This is all about the general election campaign. Bloomberg has

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Speaker 2: spoken to dozens of high net worth individuals and advisors. Now, Stephen,

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Speaker 2: maybe not everybody is going to sort of weep about

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Speaker 2: the loss of the super wealthy from the UK, but

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Speaker 2: I can tell you that other countries are competing for them.

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Speaker 2: It's not just let's say Switzerland, Monaco, Dubai. It's also

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Speaker 2: Italy and Greece in Europe who've rolled out programs cillure

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Speaker 2: the super wealthy. And it's a really interesting piece on

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Speaker 2: the terminal. I don't want to kind of focus on

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Speaker 2: on sort of expectations around labor, sort of stereotypes around

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Speaker 2: labor of wealthy people sort of fleeing because it's a

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Speaker 2: more left wing party. But this is based on the

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Speaker 2: conversations that Bloomberg has had and I think is really interesting.

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Speaker 1: Part of us to do with getting rid of the

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Speaker 1: non darmstart is well flagged by both parties now that

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Speaker 1: that's going to make a change people who are taking

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Speaker 1: advantage of that particular tax situation. But there's also i mean,

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Speaker 1: there's very different views about how many people were expected

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Speaker 1: to be to move out of the UK. You know,

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Speaker 1: the one of the firms quoted and our piece, Henley

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Speaker 1: in Partners, saying that it's three thy two hundred high

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Speaker 1: net worth individuals left last year, that was the most

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Speaker 1: in Europe according to their numbers. Others put it as

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Speaker 1: a couple of hundred that would leave if these loopholes

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Speaker 1: were changed as well. So it's something that there's you know,

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Speaker 1: it's not an exact science to know the cause and

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Speaker 1: effect of these sorts of changes.

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Speaker 2: No, absolutely not, and there's been kind of big LC

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Speaker 2: research on that very point. But it's also the fact

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Speaker 2: that Labor wants to add taxes on private equity professionals

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Speaker 2: and private school fees. So that's the kind of difference

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Speaker 2: that maybe is seen as tipping people into seriously thinking

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Speaker 2: about what they do with their money and maybe even

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Speaker 2: where they live.

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Speaker 1: And of course this is ahead of us having the

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Speaker 1: full manifestos in the parties as well, so it could

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Speaker 1: be more to common this front as well. Let's go

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Speaker 1: back to our top story, though, the European Center Bank

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Speaker 1: points to start lowering interest rates from a higher four

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Speaker 1: percent at its meeting today. Let's bring in our senior

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Speaker 1: ec be An economic supporter, Yana Aroando for more. Yana,

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Speaker 1: good morning. So this rate cut today clearly telegraphed by

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Speaker 1: policy makers at the ECB. The question is what signals

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Speaker 1: will we get about what happens next.

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Speaker 7: Indeed, that is the crucial question that everybody is looking

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Speaker 7: and answer. Yeah, looking looking to be answered today. And

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Speaker 7: if you expect any official guidance like the kind that

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Speaker 7: we've seen over the past years, then I think you'll

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Speaker 7: be disappointed. There won't be any official This is what

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Speaker 7: the ECB intends to do, just because the economy is

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Speaker 7: so volatile. At the moment, things are bumpy, uh and

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Speaker 7: we've seen that in the latest data. But that's said,

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Speaker 7: policymakers seem to cannot help themselves and offer some some

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Speaker 7: sort of direction one the less. And we've seen a

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Speaker 7: lot of that over the past days and weeks actually,

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Speaker 7: where officials have come out and said, well, with the

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Speaker 7: situation the way it is and the data coming in

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Speaker 7: the way it comes, in July, maybe not so much

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Speaker 7: an option. We're looking for September. And you can probably

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Speaker 7: see that reflected on what the President will say as well.

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Speaker 7: So I would fully expect her to repeat that the

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Speaker 7: ECB will be data dependent, will look at all incoming information.

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Speaker 7: If she, for example, refers to you know, a new

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Speaker 7: update of staff projections, those will be out this in September.

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Speaker 7: If she puts a lot of emphasis on wages and

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Speaker 7: new data coming in for the second quarter, those will

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Speaker 7: be available just before the September meeting. So there will

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Speaker 7: be clues for them to give a point to a

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Speaker 7: quarterly pace and them having their eye on September. But

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Speaker 7: really it'll it'll depend on the data and it will

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Speaker 7: require reading between the lines.

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Speaker 2: This afternoon, okay, Janna, very interesting, and so speaking of

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Speaker 2: the data, how much concern is there about sticky inflation

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Speaker 2: in Europe?

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Speaker 7: I would say still a lot. And and what we've

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Speaker 7: seen is that that the ECB uh, I mean, the

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Speaker 7: ECB has been talking about this rate cut ever since

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Speaker 7: the start of the year and and their conviction has

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Speaker 7: hardened in a way. And what they did was they

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Speaker 7: set up a number of indicators to say those will

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Speaker 7: be available before and we're watching it closely and we

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Speaker 7: believe those data will will show that we are right

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Speaker 7: in our timing. And unfortunately that hasn't quite panned out.

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Speaker 7: We waited a lot for wage information and wage growth

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Speaker 7: you know, as as it turned out, picked up at

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Speaker 7: the start of the year. The latest inflation figures haven't

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Speaker 7: been so great. Services prices went higher, core inflation ticked up,

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Speaker 7: headline inflation tied up. So there is still a lot

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Speaker 7: of uncertainty. That trend is down and and everybody agrees

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Speaker 7: on that. But but you know, we've had the Chief

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Speaker 7: economist Philip Lane warning that the road to two percent

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Speaker 7: will be bumpy, there will be setbacks. So for this

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Speaker 7: year at least, he said, policy needs to be restrictive.

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Speaker 7: That tells you a lot about their concern about inflation.

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Speaker 7: So the job isn't yet done. They have the scope

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Speaker 7: to ease that restriction that is in place just because

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Speaker 7: inflation is no longer at ten percent. We are you know,

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Speaker 7: approaching to but we're not at two percent yet. And

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Speaker 7: for a policy maker, that's not good enough. So dialing

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Speaker 7: back restriction, staying very focused. And I think what they

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Speaker 7: urgently want to avoid is making a mistake easing too early,

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Speaker 7: having having to go back and high grates again, and

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Speaker 7: that sense of caution that will drive them and and

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Speaker 7: that will that will dictate what policy is haded. So

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Speaker 7: I'd say a lot of concern about inflation, a very

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Speaker 7: careful approach and interest rates and yeah, not a whole

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Speaker 7: lot of visibility for the people who try to read them.

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Speaker 1: Right yat arounda a busy day for you ahead, This

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Speaker 1: our senior ECB and Economics reporter, and around they're joining

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Speaker 1: us from Frank first.

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Speaker 2: Okay to a longer term story. The strong sun and

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Speaker 2: wind of the Southwest Africa nation of Namibia has raised

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Speaker 2: interest from Europe in a plan to realize a number

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Speaker 2: of green hydrogen projects there. Bloomberg reporters have been lucky

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Speaker 2: enough to travel there to find out what these ambitious

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Speaker 2: plans actually look like. And joining us now is our

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Speaker 2: Africa Energy reporter, Paul Burkhart. Paul, good morning, and thanks

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Speaker 2: for being with us.

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Speaker 1: What exactly is.

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Speaker 2: Green hydrogen and why aren't we all using more of

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Speaker 2: it if Nabibia can provide it?

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Speaker 8: Yeah, good morning. Well, green hydrogen it's a very it's

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Speaker 8: a clean fuel that could be used to replace diesel.

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Speaker 8: Natural gas has huge applications for replacing shipping fuel. And

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Speaker 8: the way that it's processed it uses wind in solar

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Speaker 8: power to split water into hydrogen and oxygen, so that's

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Speaker 8: how it derives the hydrogen. But the technology is still

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Speaker 8: being developed, so it needs to get a lot cheaper

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Speaker 8: in order to become competitive with fossil fuels, and we're

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Speaker 8: very far away from that. So there's kind of there's

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Speaker 8: a first mover type thing that's going on where they're

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Speaker 8: looking to build prep projects and to produce the fuel

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Speaker 8: and Namibia happens to be like a great destination for that.

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Speaker 1: Okay, So talk us through why Namibia happens to be

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Speaker 1: the place to be.

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Speaker 8: Well, there's a World Bank study that that puts Namibia's

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Speaker 8: solar radiation is the best in the world, and I

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Speaker 8: can attest from you know, our visits there that that

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Speaker 8: it is quite hot even in the it's winter now

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Speaker 8: in southern Africa, and so the seasonal profile of the

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Speaker 8: solar radiation is quite consistent throughout the year and it's

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Speaker 8: very strong as compared to you know, the sun and

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Speaker 8: probably you know the solar potential in Europe where we're

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Speaker 8: in winter really dips down quite a bit. The other

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Speaker 8: thing about Namibia that that's a key factor and realizing

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Speaker 8: these projects is it has a stable government that also

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Speaker 8: owns the land. That makes you know, citing these projects

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Speaker 8: much easier. So those are really big factors that have

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Speaker 8: that have led a lot of companies to look to

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Speaker 8: develop there.

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Speaker 2: Okay, I mean there may be it must be about

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Speaker 2: five thousand miles from London. Why is Europe interested in

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Speaker 2: these projects?

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Speaker 1: It's a long.

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Speaker 8: Way, yeah it is. It's it's quite a long way.

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Speaker 8: But you know, because of the the amount of land

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Speaker 8: and and how how easy it is to I guess,

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Speaker 8: cite these projects. The Port of Rotterdam, port of Antwerp,

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Speaker 8: they've both been involved in setting up export terminals there

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Speaker 8: so you convert the green hydrogen into ammonia then you

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Speaker 8: can ship it by vessel. And so Germany has also

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Speaker 8: been involved. It's just one of these places that where

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Speaker 8: where the conditions are really optimal and Europe wouldn't say

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Speaker 8: have the same amount of room lands at a premium

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Speaker 8: to to realize some of these projects doesn't have the

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Speaker 8: same condition. So so that's that's one reason why we

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Speaker 8: see quite quite a few officials coming down to you know,

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Speaker 8: visit these projects and to speak with the government down here.

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Speaker 1: Well, what do these developments mean for Namibia?

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Speaker 8: If it goes as planned, you know, Namibia has a

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Speaker 8: very small population, it could become the plan is to

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Speaker 8: realize this hub for green hydrogen that would have a

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Speaker 8: significant effect in the economy. It could double the economy,

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Speaker 8: you know by some estimates. Uh, there's high unemployment in Namibia,

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Speaker 8: and they really have grand designs. They've worked with McKenzie

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Speaker 8: around plans that you know, if it reached its full potential,

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Speaker 8: it would be the hydrogen powered trains and green metals

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Speaker 8: processing and all this. But really need to start with

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Speaker 8: realizing some of these these probably it's for green irogen production. First.

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