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

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Speaker 2: This is the Bloomberg dayba QT podcast. Good morning, It's Monday,

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Speaker 2: the first of September. I'm Caroline Hepkeet in London and.

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Speaker 3: I'm Stephen Caroline Brussels. Coming up today, she Mody and

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Speaker 3: Putin meet in China as US tariffs and Western sanctions

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Speaker 3: push the three countries to pursue closer ties.

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Speaker 2: Trillions of dollars of global trade hang in the balance

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Speaker 2: following the latest court ruling that Trump's tariffs are illegal.

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Speaker 3: Plus say two trillion euro headache. Why major reforms to

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Speaker 3: the Dutch pension system could cause further upheaval for Europe's

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Speaker 3: battered bond markets.

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

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Speaker 3: India's Prime Minister in Narendra Modi, has used his first

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Speaker 3: trip to China in seven years to reset relations with

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Speaker 3: Beijing while also shoring up ties with Russia. As President

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Speaker 3: Trump ratchets obtensions with all three countries. After talks with

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Speaker 3: Chinese President cheating Ping, both leaders pledged to be partners

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Speaker 3: rather than rivals. Body also met President Putin at the

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Speaker 3: summit as relations between the two countries faced scrutiny. Trump

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Speaker 3: has Lambastad India for buying Russian oil and last week

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Speaker 3: slapped fifty percent tariffs on Indian goods. Henriette Eleven from

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Speaker 3: the Center for Strategic and International Studies says there's a

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Speaker 3: lack of joined up thinking in Washington on how it

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Speaker 3: handles the three countries.

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Speaker 4: There is no single Indo Pacific strategy. There is no

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Speaker 4: single China strategy coming out of Washington. You see many

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Speaker 4: different strategies with different priorities playing out at once. So

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Speaker 4: on the one hand, Secretary Rubio, the Secretary of State,

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Speaker 4: has convened numerous meetings with his quad counterparts, a grouping

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Speaker 4: very dependent on Indian goodwill with India, Japan, Australia and

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Speaker 4: the US. On the other hand, you see President Trump,

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Speaker 4: through his economic agencies, layering on these brutal tariffs with

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Speaker 4: very little strategic rationale.

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Speaker 3: Henry at eleven speaking there as Modi looks to bolster

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Speaker 3: India's economy in the face of Trump's tariffs. The United

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Speaker 3: States is India's biggest export market, and economists too warn

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Speaker 3: the tariffs could shave up to zero point eight percentage

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Speaker 3: points of annual growth.

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Speaker 2: The legal fight over President Trump's global tariffs is deepening

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Speaker 2: after a federal appeals court ruled on Friday that the

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Speaker 2: tariffs were issued illegally under an emergency law known as AIPA.

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Speaker 2: US trading partners are lightly dazed and confused, according to

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Speaker 2: the veteran trade negotia Wendy Cutler, who spoke to Bloomberg

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Speaker 2: after what was a major setback for the White House,

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Speaker 2: AU punel of judges in Washington ruled seven to four

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Speaker 2: in favor of upholding a decision by the Court of

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Speaker 2: International Trade in May of a Trump's Liberation Day tariffs.

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Speaker 2: Genie shhn Zaino's political science professor at Iona University, says

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Speaker 2: that the judgment is unsurprising.

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Speaker 5: Reading the statue, it was very very hard to imagine

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Speaker 5: that the court would support a declaration of an emergency.

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Speaker 5: You know, he talked about an emergency for things like

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Speaker 5: the trade deficit, for instance, but yet that has been

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Speaker 5: going on for decades and decades, hardly constituting an emergency.

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Speaker 5: So it was always an uphill battle for the administration.

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Speaker 5: They will certainly appeal.

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Speaker 2: That was Ione University's Genie shan Zaino speaking there. The

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Speaker 2: judges have left the levees intact while the case proceeds

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Speaker 2: at Trump's request, suggesting that any injunction could be narrowed

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Speaker 2: to apply only to those who sued. After the court movie,

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Speaker 2: the President posted on x that if the TIFFs went away,

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Speaker 2: it would be a total disaster for the country.

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Speaker 3: The US stock market's fate is set to come down

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Speaker 3: to the next fourteen trading sessions. That's as key data

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Speaker 3: lands in the coming weeks and sets the tone for investors.

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Speaker 3: Bin Brooks Tea Adebayo has more.

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Speaker 6: Jobs, reports of vital inflation reading, and the Federal Reserve's

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Speaker 6: interest rate decision will all hit Wall Street in the

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Speaker 6: coming weeks. The data dump is being closely watched by

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Speaker 6: cautious investors, as even Wall Street's biggest optimists grow concerned

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Speaker 6: over recent market calm in the face of seasonal weakness.

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Speaker 6: The S and P five hundred has posted its smallest

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Speaker 6: monthly gain since July twenty twenty four, and heads into

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Speaker 6: September historically its worst month of the year. With volatility vanished.

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Speaker 6: The CBOE Volatility Index has traded above the key twenty

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Speaker 6: level just once since the end of June. Friday will

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Speaker 6: mark the start of a series of major market catalysts,

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Speaker 6: kicking off with the monthly jobs reports, which economists expect

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Speaker 6: to show about seventy five thousand jobs were added according

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Speaker 6: to a Bloomberg survey. In London, he were at a

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Speaker 6: bio Bloomberg Radio.

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Speaker 2: The president of the European Commission says that Europe has

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Speaker 2: pretty precise plans for the potential deployment of troops to Ukraine.

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Speaker 2: Bloomberg's Mikael Kulabor has more on the EU's plans for

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Speaker 2: Ukraine's future.

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Speaker 7: Ursula vond reliance. That's arrangements for security gap grantees were

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Speaker 7: already agreed upon in Washington between US President Trump, Ukrain's

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Speaker 7: Volademir Zelenski and European leaders. She told The Financial Times

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Speaker 7: the roadmap can involve tens of thousands of European troops

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Speaker 7: with US support. Meanwhile, the prospects for peace in Ukraine

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Speaker 7: remain uncertain. With German Chancellor Friedrich Mertz he sees the

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Speaker 7: war dragging on. Merchtold German broadcast was it that if

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Speaker 7: he hasn't given up hope for a ceasefire, but that

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Speaker 7: he isn't under any illusions either. In Brussels, Michael Kubala

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Speaker 7: Bloomberg Radio.

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Speaker 3: Francis Prime Minister Francoberu has accused Italy of using its

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Speaker 3: tax policy unfairly to attract foreign investment, a practice known

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Speaker 3: as fiscal dumping. The comments at a TV interview dur

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Speaker 3: rebuke from Italian Prime Minister Georgia Maloney's office, which called

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Speaker 3: the charge utterly baseless. Fiscal dumping is the hot button

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Speaker 3: issue in the EU over weather countries and the blockers

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Speaker 3: seeking economic advantages the expense of their peers. Italy offers

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Speaker 3: a flat tax on worldwide assets and earnings for high

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Speaker 3: net worth individual who move their fiscal residence to the country.

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Speaker 3: Frost Barberia raised the Italian issue during a discussion on

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Speaker 3: a proposal for a two percent tax on France's ultra

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Speaker 3: wealthy put forward by the economist Gabrielle Zuckman.

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Speaker 6: That thanksas Ugman and constitution, the Zuckman tax is unconstitutional.

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Speaker 6: It is honestly a threat to investments in France because

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Speaker 6: what will they do.

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Speaker 3: They will leave, That's what Sarberia. They are speaking via

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Speaker 3: translator during a joint interview with French ANDES channels, including

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Speaker 3: Frans Haint Foe. The Prime Minister is trying to rally

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Speaker 3: support for his budget proposals ahead of a confidence vote

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Speaker 3: in a week's time.

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Speaker 2: Now Here in the UK, the government will look into

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Speaker 2: potentially trying to change the European Convention on Human Rights

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Speaker 2: as it tries to blunt political attacks on migration. A

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Speaker 2: record fifty thousand asylum seekers have crossed into Britain illegally

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Speaker 2: since the Labor government took power last year. Education Secretary

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Speaker 2: Bridget Phillipson told skies the Trevor Phillips so there needs

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Speaker 2: to be clarity over tough rules around migration.

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Speaker 8: We do believe there needs to be reform of the ECCHR,

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Speaker 8: and that's what the Home Secretary is looking at. But

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Speaker 8: we also believe as a government that our responsibilities under

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Speaker 8: international law matter too, and our standing in the world

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Speaker 8: matters as well, and that's why, yes, we have to

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Speaker 8: have clear control all for our own borders, a fair

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Speaker 8: system with rules that are followed, and we will to

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Speaker 8: remove people who don't have a right to be here.

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Speaker 2: That was the Education Secretary Bridget Phillips, and speaking after

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Speaker 2: the Reform UK Party made an eye catching promise to

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Speaker 2: deport six hundred thousand people if it wins the next

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Speaker 2: general election duely twenty twenty nine. In the UK, reform

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Speaker 2: have only four MPs in parliament, but our leading opinion polls.

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Speaker 3: Those are your top stories on the market. The MSCI

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Speaker 3: Asia Pacific Index is down a tenth of one percent.

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Speaker 3: The NICKA in Tokyo down by one point six percent

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Speaker 3: the morning. In Hong Kong, though shares being lifted one

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Speaker 3: point eight percent at the moment, mainly by Ali Babo's

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Speaker 3: shares are up by almost eighteen percent today. Looking at

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Speaker 3: the European stock future session, we're seeing Eurostox fifty features

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Speaker 3: up by a tenth of one percent. US markets are

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Speaker 3: closed today due to the Labor Day holiday.

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Speaker 2: Now, in a moment, we'll bring you more on that

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Speaker 2: meeting between Vladimir Putin and Narendramodi, plus why a change

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Speaker 2: in the Dutch pension system is making waves across Europe's

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Speaker 2: bond markets. But as ever, there's always something that's caught

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Speaker 2: our I on a Monday that's a bit different. One

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Speaker 2: of the great debates for cooks is cooking with gas

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Speaker 2: really the best stephen.

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Speaker 3: Kel, Well, this is I have had this debate with

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Speaker 3: the chef in my life, and this is something that

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Speaker 3: I've won the argument essentially, So I'm thrilled about this

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Speaker 3: piece of Olivia Redguard which is talking about the top

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Speaker 3: chefs that are saying that induction is actually better than gas.

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Speaker 3: It's quiet, it's more environmentally friendly, and the best chef

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Speaker 3: say that is actually more precise when it comes to cooking.

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Speaker 3: So she visited Ekoi, which is a Too Michillin starred

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Speaker 3: restaurant on one eighty Strand in London as well, and

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Speaker 3: the chef there switched to induction. This is something that

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Speaker 3: it's actually when I lived in France, that's when I

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Speaker 3: realized that everyone's apartments had induction cooking rather than gas.

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Speaker 3: So you how to get used to it essentially, And

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Speaker 3: it's because it takes up less space. It's much safer

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Speaker 3: in an apartment building not to have gas, or especially

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Speaker 3: older buildings where you know the infrastructure could be could

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Speaker 3: have been there for a very long time when it

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Speaker 3: comes to gas safety. But it heats things up faster,

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Speaker 3: uses less energy. You have to replace all your paths,

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Speaker 3: which is very annoying. But once you have that part done,

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Speaker 3: I'm in favor. I'm an induction fan.

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Speaker 2: Well, the thing is it is actually being phased out

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Speaker 2: in new builds in the UK, and if anyone knows me,

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Speaker 2: you will know how baffled and frustrated and with people

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Speaker 2: putting in wood burning stoves. So I didn't realize actually

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Speaker 2: how bad for the environment, how bad for your health? Actually,

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Speaker 2: guess stoves are the thing is you could you have

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Speaker 2: to kind of buy a top end induction often for

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Speaker 2: it to really work well and for it to be

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Speaker 2: as precise as some of the chefs are talking about.

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Speaker 2: I'm not sure mine is that expensive.

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Speaker 3: Well, you know what, They're not as expensive as you

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Speaker 3: might think. I would say. Well, we'll discuss later. You'll

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Speaker 3: read that full story from Olivia at Guide at Bloomberg

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Speaker 3: dot com and on the terminal. We'll put a link

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Speaker 3: to it on our podcast show Notes.

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Speaker 2: Now, let's bring in more now on India's Prime Minister

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Speaker 2: Nuendra Modi's diplomatic overtures to China and Russia at a

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Speaker 2: meeting in Tianjin. Our chief Asia correspondent us In Mathieson

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Speaker 2: joins us now for more. Good morning of oz so

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Speaker 2: Mody met with Vladimir Putin today at a time when

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Speaker 2: his country's relationship with Russia is coming in for particular criticism.

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Speaker 2: From President Trump. Is this a show of defiance then

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Speaker 2: from the Indian leader?

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Speaker 9: Well, very much so in fact for Indians with both

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Speaker 9: Russia and China, because as you say, we know India

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Speaker 9: has been under fire from the US from Donald Trump

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Speaker 9: and and other officials over their purchases of Russian energy,

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Speaker 9: even accusing India or funding the war in Ukraine. Peter Navarro,

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Speaker 9: one of Trump's key aids on the weekend saying India

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Speaker 9: is nothing but a laundromat for the Kremlin, so really

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Speaker 9: strong accusations there, and you can see as a result

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Speaker 9: of that, is making the decision to certainly double down.

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Speaker 9: He's saying We're going to continue to buy Russian oil

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Speaker 9: to refine it in India. That's a key, key business

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Speaker 9: for India refiners and from the photos of their meeting,

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Speaker 9: a really warm embrace going on, sending a signal to

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Speaker 9: the US. Is going to be repercussions of this criticism,

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Speaker 9: which is that his force Undermodi's hand. Modi's going to

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Speaker 9: very clearly double down his relationship with Vladimir Putin. He

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Speaker 9: needs to support refiners in India, and it's also prestige

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Speaker 9: at home for him to be facing this criticism from

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Speaker 9: Donald Trump given their long standing friendship. So he needs

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Speaker 9: to show at home that he's standing up to the

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Speaker 9: US and all of this, and a very conscious decision

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Speaker 9: in that meeting, the warm embrace and the optics of it,

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Speaker 9: to show that he's certainly not going to be changing course.

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Speaker 3: But before he met Vladimir Putin or Ander Rodi spoke

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Speaker 3: to Vladimo's Landski of Ukraine and promised to deliver the

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Speaker 3: appropriate signal to Russia. Was there any sign of that.

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Speaker 9: Well, that's right, they did meet and they had a

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Speaker 9: conversation about this, and certainly India has like other countries,

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Speaker 9: been pushing for a ceasefire in Ukraine and talking about

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Speaker 9: the need to get towards a ceasefire because things have

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Speaker 9: slowed very much on that front, as we know, the

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Speaker 9: idea of a pool push for peace, for example, or

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Speaker 9: even the idea of Vladimir Putin meeting with Vladimir's Lensky

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Speaker 9: as the next step. So perhaps the hope was that

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Speaker 9: Modi could use his leverage with Vladimir Putin to try

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Speaker 9: and coax him into meeting with the Ukrainian president. There's

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Speaker 9: no sign that that happened, of course, and there's no

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Speaker 9: sign that Putin is inclined to meet with Zlynski in

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Speaker 9: general anytime soon, or to stop or slow his war

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Speaker 9: in Ukraine. So if that message was passed on at

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Speaker 9: least to get towards a ceasefire, sign that Vladimir Putin

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Speaker 9: is keen to move on that front anytime soon.

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Speaker 2: In terms of these diplomatic efforts though, between China, Russia, India,

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Speaker 2: it's all being driven or many people see it being

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Speaker 2: driven by President Trump's trade war. The trade measures though,

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Speaker 2: have been in focus because federal courts in the US

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Speaker 2: on Friday have issued this ruling upholding the fact that

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Speaker 2: it's illegal. How significant is that really because there are

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Speaker 2: limitations on the ruling, Well.

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Speaker 9: That's right, I mean, it's certainly a setback for Trump

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Speaker 9: and his trade ambitions. Essentially, you say that the tariffs

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Speaker 9: were enacted illegally under a law that the court says

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Speaker 9: was not for that purpose. And it covers quite a

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Speaker 9: bit Donald Trump's so called Liberation Day tariffs, reciprocal tariffs,

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Speaker 9: some of the extra tariffs on countries like China and Mexico.

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Speaker 9: So if a final ruling is the same, that could

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Speaker 9: upend all his trade deals. And then you have countries

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Speaker 9: and companies demanding back the money that been paid. They've

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Speaker 9: got to rejigger their paperwork, their supply chains again to

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Speaker 9: take that into account. There's already been a lot of

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Speaker 9: that impact. But as you say, it does keep these

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Speaker 9: tariffs in place for now, and there's a possibility that

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Speaker 9: if the final ruling is that these tariffs were illegal,

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Speaker 9: that really may only apply to those who sued, which

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Speaker 9: was basically democratic led states and a small group of companies.

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Speaker 9: So there's a lot of uncertainty around this. What does

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Speaker 9: this ruling mean, What does a final ruling potentially mean?

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Speaker 9: But if you're in the middle of talks right now,

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Speaker 9: for example, Europe, Japan and so on, what you probably

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Speaker 9: will do in the intim at least you'll slow things

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Speaker 9: down in terms of the trade conversations with the US

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Speaker 9: because you don't want to commit. So there's a medi

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Speaker 9: impact of this ruling. And then of course there's a

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Speaker 9: big question of what would happen if a final ruling

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Speaker 9: does uphold this.

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Speaker 3: Yeah, plenty to watch on that front as well for now.

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Speaker 3: Our chief Phaser correspondent, Rasalind Mathison, thank you.

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

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Speaker 2: Now let's move on and think about a story here

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Speaker 2: in Europe. There's a near two trillion euro upheaval coming

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Speaker 2: for European bond markets, capping a year that has already

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Speaker 2: been marked by tariffs, by deficit worries, and now this

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Speaker 2: political crisis in France. The storm is centered on a

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Speaker 2: long planned reform of the European Union's biggest pension system

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Speaker 2: in the Netherlands, Iffects and rates. To report it, Alice

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Speaker 2: Gledhield joins us now for more on this. Alice, good morning.

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Speaker 2: What is changing then in the Dutch pension system?

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Speaker 1: Good morning, Yeah, So this change has been years in

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Speaker 1: the making and essentially the system is moving from a

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Speaker 1: defined benefit one to a defined contribution system. And that's

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Speaker 1: similar to a transition that we've undergone in the UK

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Speaker 1: for people who are familiar with the system here. And

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Speaker 1: it really just reflects changes in society. So you have,

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Speaker 1: as you do in a lot of cultures around the world,

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Speaker 1: and aging population. People are changing their jobs, through their

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Speaker 1: careers and so on. So as you mentioned, there's a

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Speaker 1: huge amount of money at stake. The Dutch pension funds

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Speaker 1: have accumulated or total assets of around almost two trillion euros.

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Speaker 1: They're much the bigger system in the year area. Now

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Speaker 1: a small number of funds have already switched, but the

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Speaker 1: first big tranch is going to happen around the start

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Speaker 1: of twenty twenty six, and then the rest, in theory

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Speaker 1: will mostly go at the start of twenty twenty seven.

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Speaker 1: And under the new system, individual pension members will have

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Speaker 1: their own independent pension pots and the money in those

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Speaker 1: pots will be invested differently depending on how old you are.

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Speaker 1: So younger people's savings will be skewed more towards risky

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Speaker 1: assets like equities or maybe credit, and older people will

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Speaker 1: be more heavily invested in safer securities things things like

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Speaker 1: government bonds and so on.

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Speaker 3: So what sort of effect is this having on markets?

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Speaker 3: Then I suppose what's the potential change this could mean

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Speaker 3: for markets?

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Speaker 1: So I think the first way is really the demand

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Speaker 1: for different asset classes. It's going to change over time.

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Speaker 1: So there's a particular focus on government bonds. So I

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Speaker 1: think there's a view that gradually there will be less demand,

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Speaker 1: especially for longer dated government bonds. Now it's more to

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Speaker 1: remember that's at a time when governments globally issuing more

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Speaker 1: and more debts. So there's a concern that you're going

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Speaker 1: to get at a sort of mismatch I guess in

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Speaker 1: terms of supply and demand. And it's a big enough

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Speaker 1: concern that some investors like black Rock or JP Morgan

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Speaker 1: Asset Management have said that they're cautious. It's another reason

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Speaker 1: to be cautious on the long end of European yield curves.

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Speaker 1: Then there's another aspect, which is the impact of the

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Speaker 1: transition on some derivatives known as interest rates swaps. Now,

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Speaker 1: the Dutch pension funds have used these very long data

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Speaker 1: swaps for a long time to hedge their interest rate risk,

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Speaker 1: and that's just to make sure that they can pay

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Speaker 1: their retirees further down the line whatever happens to interest

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Speaker 1: rates and borrowing costs. Now, the transition means they'll be

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Speaker 1: less demand for those very long dated hedges. And the

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Speaker 1: risk that everyone's been worried about is that the pension

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Speaker 1: funds are going to go all in at once and

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Speaker 1: try and unwind them en mass, perhaps in December or

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Speaker 1: kind of in January this year, and that's a time

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Speaker 1: of year, particularly around Chriss, when liquidity is poor anyway,

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Speaker 1: So you can see you can see that already being

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Speaker 1: priced in some instruments, so for example, types of derivatives

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Speaker 1: known as waptions. That's a measure of where vlacility might

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Speaker 1: be in the coming months, and you can see the

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Speaker 1: people are positioning for an optic and done some vlacility.

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Speaker 1: Of course, it might all be fine. This transition has

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Speaker 1: been a long time coming, it's been well flagged. You've

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Speaker 1: got lots of market partisimpants like hedge funds and so on,

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Speaker 1: and sort of prepositioning, so you know, positioning should make

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Speaker 1: a profit from this trade, but there really is very

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Speaker 1: little visibility at how over how it's all going to

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Speaker 1: pan out. There's still lots f uncertainty over which pension

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Speaker 1: funds will try to position where and just how they're

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Speaker 1: going to do that. So I think, you know, the

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Speaker 1: chance of placility around sort of year end into January

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Speaker 1: is seen as high.

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Speaker 2: Okay, very briefly, how does the government kind of upheaval?

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Speaker 2: What does that mean in the case of this is

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Speaker 2: is it going to have any effect on what's going

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Speaker 2: on with this much longer change.

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Speaker 1: I think, fortunately the short answer is hopefully not too much.

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Speaker 1: You know it does add a layer of uncertainty, but

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Speaker 1: I think I think broadly speaking, this is seen as

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Speaker 1: a shift that's important for Dutch society as a whole,

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Speaker 1: and I don't think there's a sense that any new

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Speaker 1: government that forms might might sort of stand in the

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Speaker 1: way of it.

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Speaker 3: Okay, Alice glad Hill, our FX and Rates reporter, thank

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Speaker 3: you very much for joining us with details at that story.

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