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

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Speaker 2: This is the Blue Bag Day Baker Podcast. Good morning,

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Speaker 2: It's Wednesday, the eighteenth of February. I'm Caroline Hepkeit in

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Speaker 2: London and.

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Speaker 3: I'm Stephen Caroline Brussels. Coming up today, Iran and the

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Speaker 3: United States signal advances in nuclear talks, but the risk

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Speaker 3: of military action remains.

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Speaker 2: Japan's Prime Minister Sanai Takeichi announces up to thirty six

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Speaker 2: billion dollars of investments in the US as part of

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Speaker 2: the country's trade deal with President Trump.

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Speaker 3: Plus Ethiopia's example how banning the import of fossil fuel

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Speaker 3: cars has led to an increase in ev adoption.

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

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Speaker 3: Both the United States and Iran say talks on a

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Speaker 3: nuclear deal are making progress, suggesting the chances of an

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Speaker 3: imminent military clash are low. The US officialist told Bloomberg

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Speaker 3: the Tehran's diplomats are due to return to Geneva in

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Speaker 3: two weeks with a new proposal. Ruan's Foreign minister abbasaractually

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Speaker 3: says the path to a deal has started.

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Speaker 5: You're hopeful that negotiation will lead to a sustainable and

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Speaker 5: negotiated solution. At the same time, as demonstrated during the

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Speaker 5: aggression of thirteen June twenty twenty five, Iran remains fully

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Speaker 5: prepared to defend itself against any.

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Speaker 3: Threat, the Iranian Foreign minister, speaking in Geneva. A deal

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Speaker 3: could mean the US lifting tough sanctions on Around's oil

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Speaker 3: industry and wider economy, but the next steps are expected

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Speaker 3: to get more difficult, with each side needing to draft

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Speaker 3: a text for a deal. Vice President US Vice President

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Speaker 3: jd Vance told Fox News force was still an option.

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Speaker 6: You know, in some ways it went well, they agreed

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Speaker 6: to meet afterwards. But in other way is it was

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Speaker 6: very clear that the President has set some red lines

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Speaker 6: that the Iranians are not yet willing to actually acknowledge

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Speaker 6: and work through. So we're going to keep on working it.

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Speaker 6: But of course the President reserves the ability to say

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Speaker 6: when he thinks that diplomacy has reached its natural end.

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Speaker 6: We hope it will get to that point, but if

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Speaker 6: we do, that'll be the president's call.

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Speaker 3: Fans and other US officials have topped up the prospect

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Speaker 3: of strikes on Iran as the US has moved to

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Speaker 3: arms and troops to the region. Oil prices fell on

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Speaker 3: the signs of progress in the talks, but Brancrew is

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Speaker 3: up almost twelve percent this year, largely because of the

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Speaker 3: US around tensions and the prospect of a war in

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Speaker 3: the oil rich region.

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Speaker 2: Now, Japan is planning to invest up to thirty six

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Speaker 2: billion dollars in oil, gas and critical mineral projects in

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Speaker 2: the US. It marks the first trash of investments worth

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Speaker 2: more than five hundred billion dollars in all, as part

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Speaker 2: of the trade deal that was struck between the two countries.

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Speaker 2: In a social media post, President Trump hailed the scale

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Speaker 2: of the projects, which include a large natural gas plant

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Speaker 2: in Ohio and a crude export facility in the Gulf

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Speaker 2: of Mexico. Japan's by Minister Sana Takichi said the initiatives

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Speaker 2: are aimed at building resilient supply chains and economic security.

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Speaker 2: It comes weeks before Takichi is set to meet with

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Speaker 2: Trump in Washington.

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Speaker 3: The European Central Bank says Christine Leguard hasn't made any

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Speaker 3: decision about leaving her job as president early. That follows

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Speaker 3: a report from The Financial Times citing one person familiar

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Speaker 3: with Leguard's thinking saying she wants to step down before

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Speaker 3: France's presidential election in April twenty twenty seven. The statement

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Speaker 3: from the ECB says the central Bank chief has totally

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Speaker 3: focused on her mission. There had been speculation that Leguard

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Speaker 3: may want to exit before the end of her eight

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Speaker 3: year term, which ends in October twenty twenty seven. Here's

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Speaker 3: what Leguard told Bloomberg TV in November.

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Speaker 1: I was always under the impression that it was a

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Speaker 1: five year term and I hadn't checked. So having said

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Speaker 1: yes to Macon and Merkle, I said, oh, okay, well,

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Speaker 1: I'll be in Frankfort for five years. And at that

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Speaker 1: point Macaul said no for eight years, but it was

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Speaker 1: too late.

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Speaker 3: The US to be president there. Speaking of Bloomberg's leaders

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Speaker 3: with Laqua last year, earlier this week, we reported that

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Speaker 3: European governments may choose to fast track finding a successor

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Speaker 3: for Leguard to avoid having to deal with a possible

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Speaker 3: far right French president after next year's elections.

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Speaker 2: Anthropic is releasing a new AI model designed to be

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Speaker 2: better at getting your computer to do complex tasks on

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Speaker 2: your behalf. The new update to the company's clawed chatbot

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Speaker 2: comes as AI fears continue to unsettle global markets. Some

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Speaker 2: private software companies like McAfee, have released their earnings ahead

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Speaker 2: of time in a bid to try to reassure investors

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Speaker 2: that they are resilient to disruption from this new technology.

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Speaker 2: Although the firms declined to comment, their disclosure comes after

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Speaker 2: a previous anthropic product launch sparked a major sell off.

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Speaker 3: Warren Buffet's Berkshire Hathaway is shaking up its portfolio, according

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Speaker 3: to the latest regulatory filings. Boombrooks t Adabio has the story.

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Speaker 7: When is firm first acquired shares in Amazon in twenty nineteen,

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Speaker 7: Warren Buffett said he'd been an idiot for not buying

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Speaker 7: the online retail giant stock sooner, but years later it

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Speaker 7: seems that a sentiment could have shifted. Berkshire Hathaway slashed

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Speaker 7: its investment in the company by more than seventy five

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Speaker 7: percent towards the end of last year, whilst also building

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Speaker 7: its position in The New York Times.

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Speaker 4: The move was one of Buffett's.

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Speaker 7: Last bets as CEO of the famed conglomerate before stepping down.

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Speaker 7: Berkshire also increased its stakes in Chevron and Chubb during

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Speaker 7: the period. In London, tiwa Adebayo, Bloomberg.

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Speaker 2: Radio Britain's Reform UK says that it plans to overhaul

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Speaker 2: the Bank of England and the government's budget watchdog if

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Speaker 2: it wins the next general election. In a speech later today,

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Speaker 2: newly appointed Treasury spokesman Robert Jenrick is expected to say

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Speaker 2: that the Office for Budget Responsibility needs more diversity of

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Speaker 2: opinion when making economic forecasts. The Bank of England is

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Speaker 2: also criticized for having green targets in addition to its

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Speaker 2: focus on inflation. Here, Reforms business spokesman Richard Tice.

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Speaker 8: Get rid of the madness of what we've politely coined

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Speaker 8: net stupid zero, which has been so damaging to our

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Speaker 8: industrial competitiveness and so expensive for everybody at.

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Speaker 2: Home, Reforms Richard Tice there. In an interview with Bloomberg

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Speaker 2: in January, Reforms leader Nigel Farage had vowed to quote

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Speaker 2: challenge every single tenant of UK economic policy. And those

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Speaker 2: are our top stories for you this morning. So in

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Speaker 2: terms of the markets this hour, so we're thinking about

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Speaker 2: the rotation that continued in stock markets yesterday in the US.

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Speaker 2: It looked as if little had changed by the end

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Speaker 2: of the day, but in fact there were significant moves

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Speaker 2: under the hood. And now as that features this morning

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Speaker 2: are by a quarter of one percent. Your socks fifty

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Speaker 2: futures also gaining three tens of one percent. Very thin

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Speaker 2: holiday trading in Asia, but Japanese stocks extending gains. The

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Speaker 2: powders hit hard yesterday. The dollar this morning is strengthening

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Speaker 2: against all currency majors or what next?

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Speaker 4: Up a tenth of one percent.

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Speaker 2: FED officials saying the AI productivity and the boosts that

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Speaker 2: that could bring could raise the neutral rate in terms

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Speaker 2: of ten year of treasury yields. This hour you've got

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Speaker 2: four spot zero six, so yields rising just a fraction,

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Speaker 2: and the crypto route continues, Bitcoin treading just above sixty

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Speaker 2: seven thousand dollars.

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Speaker 4: Those are the markets in a moment.

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Speaker 3: More on the progress made in the US around talks

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Speaker 3: and what it means for the risk of military action,

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Speaker 3: plus how Ethiopia is bann on importing fossil fuel cars

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Speaker 3: as spurred a jump in electric vehicle use. But first,

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Speaker 3: another story that we've been reading this morning on a

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Speaker 3: trend of restaurants getting smaller. Kay Krater and Chris Rosar

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Speaker 3: have been writing about this, with examples from London, New

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Speaker 3: York and beyond the restauranturs they spoke to, like the

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Speaker 3: creators of Corner Store in New York or One Club

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Speaker 3: Row in London, say that it's about creating a sense

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Speaker 3: of exclusivity, but also the coziness and more familiarity with

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Speaker 3: staff serving fewer people. It's also extending to hotels. Have

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Speaker 3: you heard about the Shoom, Permit Room and Portobello? So

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Speaker 3: do Shume obviously famous Italian or famous Indian restaurants. Yes,

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Speaker 3: all over the city of London. They have a two

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Speaker 3: bedroom essentially apartment that you rent. It's designed to feel

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Speaker 3: like a rich relatives guesthouse.

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Speaker 4: But you know love that.

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Speaker 3: Another brand going small. I always think every time I

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Speaker 3: read one of Kate's articles, I end up with a

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Speaker 3: list of places that I want to go. But this

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Speaker 3: does actually speak to something that does really is really

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Speaker 3: important to me, which is the acoustics in places and

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Speaker 3: can you hear the person that you're sitting opposite. There

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Speaker 3: is an acceptable level of background noise where you want

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Speaker 3: to hear a bit of a buzz, but you don't

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Speaker 3: want it to be overwhelming. To me, a smaller venue

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Speaker 3: makes that much easier.

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Speaker 4: Oh yes, I sympathize.

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Speaker 2: I mean, we use that is so much every day,

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Speaker 2: don't we But yes, small venues they almost feel necessary, now,

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Speaker 2: don't they a kind of antidote to the digital world

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Speaker 2: that we're all kind of immersed in. Smaller and what

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Speaker 2: Kate calls bitsier.

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Speaker 4: Rooms, which I like.

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Speaker 2: What it means is that the rooms are smaller, but

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Speaker 2: often in one venue you might get several rooms. And

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Speaker 2: so there's a kind of depth of experience, a richness

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Speaker 2: in the design that she says might bring authenticity. But

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Speaker 2: then there's also, of course, the money is getting more

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Speaker 2: expensive to build things. Everything is more expensive, deck or

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Speaker 2: hiring people, the food, the design, the lighting.

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Speaker 4: So of course the trend is to t need tiny.

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Speaker 3: Indeed, well, we'll put a link that piece in our

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Speaker 3: podcast show notes. Well, let's bring you more now. In

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Speaker 3: the talks between the US and Iran, officials say they

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Speaker 3: made progress, suggesting the risk of military intervention has been

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Speaker 3: averted or lessened at least for now. Are Head of

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Speaker 3: Middle East, North Africa and Russia coverage, Stuart Livingstone Wallace

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Speaker 3: joins us Now for more, Stuart, what do we know

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Speaker 3: then about the progress that was made in these talks?

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Speaker 9: Yeah, good morning. So I mean I think that both

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Speaker 9: sides are taking it as a positive in the sense

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Speaker 9: that they're still talking. The timeframe seems to be that

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Speaker 9: there will be a two week pause where they going

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Speaker 9: to come up with some actual proposals. They're going to

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Speaker 9: swap drafts see if they can come to I suppose

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Speaker 9: a more formal working document. Now, the real question here

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Speaker 9: is what exactly are the red lines for both sides.

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Speaker 9: So the US has made it clear that it wants

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Speaker 9: to talk about the nuclear file, which in itself is

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Speaker 9: a pretty complex topic, but also wants to talk about missiles,

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Speaker 9: wants to talk about the regional proxies that Iranian forces

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Speaker 9: fund and provide with military supplies. On the Iranian side,

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Speaker 9: this I they really only want to talk about the

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Speaker 9: nuclear phile, and within that there are red lines around

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Speaker 9: its right to enrich the uranium at all. So we'll

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Speaker 9: waste and see. And you know, the background to this

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Speaker 9: is that the second Strike Carrier group making its way

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Speaker 9: from the Caribbean to certainly the Indian Ocean, potentially the

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Speaker 9: Persian Gulf, and that again builds this arm Marda that

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Speaker 9: Trump has spoken about repeatedly. So there is the threat

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Speaker 9: there of military action in the background that I hope,

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Speaker 9: and many people hope are sort of focusing minds around

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Speaker 9: getting some sort of resolution.

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Speaker 2: Yeah, indeed, I mean ahead of the talk, Iran said

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Speaker 2: that it would close part of the straits of horn

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Speaker 2: Moves for military drills. And as you say, the US

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Speaker 2: continuing to build up its military presence in the region,

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Speaker 2: I mean, should we expect to see more of that,

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Speaker 2: of the kind of military tensions as the discussions progress.

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Speaker 9: Yeah, I mean, I think it's reasonable to expect it. Now,

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Speaker 9: these were formal naval drills that had been pre announced.

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Speaker 9: I think it is unusual that they decided to close

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Speaker 9: horm Moves for a couple of hours, but it's really

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Speaker 9: a show of force. On top of that, you had

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Speaker 9: this live missile fire going into Horror Moves and into

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Speaker 9: that strait that's very narrow strait, which I think carries

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Speaker 9: something like a fifth of the world seaborn oil. So

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Speaker 9: really it's Iran trying to demonstrate that it still has

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Speaker 9: some military capability. Again, when you stack that up against

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Speaker 9: what's coming into the region, what's already in the region,

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Speaker 9: or at least on the U S side, I mean,

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Speaker 9: it pales into insignificance. But nonetheless it is Iran trying

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Speaker 9: to show the it's not going to capitulate. Now whether

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Speaker 9: that's a reality that can actually carry out in the

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Speaker 9: long term, and that's really open to question, but you

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Speaker 9: should anticipate more of this sort of action in the

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Speaker 9: next several weeks.

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Speaker 3: As there was another round of talks taking place in

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Speaker 3: Geneva as well that you've also been keeping an eye

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Speaker 3: on for a stewart. This is between Russia and Ukraine,

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Speaker 3: the latest round of the US broker peace talks. They're

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Speaker 3: set to continue today. Are there any signs of progress

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Speaker 3: in those negotiations.

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Speaker 9: No, no, no, not really much. I mean again, you

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Speaker 9: can at least say, look, they're talking to each other,

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Speaker 9: that in itself is progress, but really this comes down

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Speaker 9: to territory and the Russians insisting that Ukraine see territory,

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Speaker 9: the Ukrainians insisting they will not see territory, and it's

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Speaker 9: very hard to see how those two sides can come

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Speaker 9: to any sort of agreement. So I don't think anyone

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Speaker 9: was particularly optimistic going into this lacest round of talks.

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Speaker 9: They continue today and that is a positive, but it's

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Speaker 9: very hard to see how you navigate your way down

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Speaker 9: those sort of two positions into something that can actually

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Speaker 9: manifest itself into a lasting piece.

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Speaker 4: Yeah.

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Speaker 2: So lots then for us to think about in terms

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Speaker 2: of the negotiations that we saw yesterday, those two regions

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Speaker 2: of difficulty, not quite conflict in the Middle East, but

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Speaker 2: certainly in Ukraine. Thank you so much Stuart for being

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Speaker 2: with us. Livingston Wallace joining us for discussions around that

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Speaker 2: are head of Middle East, North Africa and Russia coverage.

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Speaker 3: Thank you, and those discussions due to recommence, according to

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Speaker 3: the Task News Agency this morning eleven am local time.

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Speaker 3: According to the latest reporting this morning, we also had

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Speaker 3: the news that Ukraine's the head of their peace negotiation team,

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Speaker 3: Ruster Momarov, met with representatives of the US and their

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Speaker 3: European partners following the trilateral togs in Geneva, as well

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Speaker 3: him talking in a social media post about the importance

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Speaker 3: of maintaining a common vasion and coordination of action between

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Speaker 3: the US, Ukraine and Europe as well. So those talks

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Speaker 3: set to continue today in Geneva over the issue of

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Speaker 3: the future of Ukraine, of course, and whether or not

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Speaker 3: an end can be brought to Russia's war there as

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Speaker 3: we're approaching the fourth anniversary and I would just point

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Speaker 3: as well to the latest from our Bloomberg Opinion columnists

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Speaker 3: Mark Champion on this as well, talking about the US

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Speaker 3: multitasking in the peace talks that we've seen in Geneva.

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Speaker 3: So we have obviously the set of discussions with Iran,

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Speaker 3: but also the set of discussions with Ukraine, both happening

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Speaker 3: in Geneva yesterday, and the question of I suppose what

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Speaker 3: the US motivations and strategy is in both of those

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Speaker 3: sets of negotiations too of interest. So Bloomberg dot Com

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Speaker 3: Forward Slash Opinion is where you'll find the latest writing

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Speaker 3: from Mark Champion. Stay with us more from Bloomberg Daybreak

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Speaker 3: Europe coming up after this.

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Speaker 7: Now.

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Speaker 3: Two years ago, Ethiopia banned the import of fossil fuel

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Speaker 3: powered vehicles and slashed tariffs on the import of electric cars.

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Speaker 3: The result has been a far higher adoption of evs

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Speaker 3: compared to the global average. Our senior climate reporter and

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Speaker 3: host of Bloomberg's Zero podcast, Actuasrathi, is with us now

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Speaker 3: for more. Actually, good morning, how big has the change

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Speaker 3: been in Ethiopia then, in terms of electric vehicle adoption?

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Speaker 10: I mean, look, Ethiopia is a small economy, right it's

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Speaker 10: one hundred and thirty million people, but only one thousand

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Speaker 10: dollars per capita, so it's not a big car business.

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Speaker 10: But what has happened is completely extraordinary and something other

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Speaker 10: developing countries can look to. So within this two year

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Speaker 10: period from when the ban was brought in, it has

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Speaker 10: gone from an electric vehicle penetration of less than one

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Speaker 10: percent to more than six percent, and that is higher

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Speaker 10: than the global average of four percent.

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Speaker 11: And of course we know we've heard stories here in.

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Speaker 10: The West where countries are pushing really hard, like Norway

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Speaker 10: now has one hundred percent of all its new cars

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Speaker 10: being electric and yet that level of penetration to achieve

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Speaker 10: it within a small two year window just shows what

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Speaker 10: a leap frog in car technology can look like if

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Speaker 10: governments are serious about moving in that direction.

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Speaker 2: Yeah, and how has the country managed to do that

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Speaker 2: to overcome the obstacles that you know, loads of countries

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Speaker 2: are thinking about charging infrastructure for one.

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Speaker 11: Sometimes desperation gets you the answer.

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Speaker 10: So if your peas suffered a sovereign debt default in

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Speaker 10: twenty twenty three, and at the time it was paying

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Speaker 10: billions of dollars importing fuel and subsidizing it for its population,

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Speaker 10: and it's just dollars it did not have that it

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Speaker 10: could afford, and so it brought in this policy thinking, okay, well,

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Speaker 10: if we have to import fuel and import cars, let's

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Speaker 10: just import cars.

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Speaker 11: Because it turns out.

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Speaker 10: The country has been over the past decade or so

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Speaker 10: building a huge amount of electricity resources, mostly renewable, some solar,

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Speaker 10: some wind, but vastly the hydropower dam called the Grand

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Speaker 10: Ethiopian Renaissance Dam on the Nile, and that has made

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Speaker 10: electricity really cheap and plentiful. So that combination of desperation

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Speaker 10: and availability of cheap, clean power allowed it to take

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Speaker 10: this policy and actually make it work.

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Speaker 11: Inside.

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Speaker 3: Are there lessons from Ethiopia's experience for other countries that

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Speaker 3: want to boost the adoption of evs. I'm looking at,

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Speaker 3: you know, with a story out of Poland this morning

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Speaker 3: talking about the concerns there and security from Chinese made

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Speaker 3: electric cars. This is an active debate happening in many places.

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Speaker 11: Yeah, very much so.

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Speaker 10: So I think two lessons here beyond the ones that

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Speaker 10: we talked about, which is economics needs to make sense

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Speaker 10: for your country, and that you need to have plentiful electricity,

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Speaker 10: ideally at very cheap prices. But the two things that

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Speaker 10: they can learn is it needed a charging network, which

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Speaker 10: it hadn't built, So that is something other countries as

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Speaker 10: they look towards going electric, need to be clear about

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Speaker 10: that a charging network needs to be available for an

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Speaker 10: adoption to happen quickly.

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Speaker 11: On the security side, we're.

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Speaker 10: Seeing a two split world where countries that are in

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Speaker 10: the China orbit, you know, China is the largest creditor

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Speaker 10: to Ethiopia, do not really see the security concerns and

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Speaker 10: are very happy to get these cheap, tech, heavy electric

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Speaker 10: cars from China, which you know, many Western automakers can't

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Speaker 10: even compete with, whereas in Europe, yes, we are seeing

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Speaker 10: this threat of China as a security issue, but that

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Speaker 10: also means then the Western automakers need to catch up

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Speaker 10: to what is available in China, because it's not just

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Speaker 10: producing cheap electric cars, it's also producing the techiest, the

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Speaker 10: sexiest electric cars, ones that you can't get from Western automakers.

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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 beyond.

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Speaker 4: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carol. Join us again tomorrow morning for all

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Speaker 3: on Bloomberg day Break Europe