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

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Speaker 2: This is the Bloomberg daybac AT podcast. Good morning, It's Wednesday,

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Speaker 2: the eleventh of March. I'm Caroline Hepget in London and

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Speaker 2: I'm Stephen Caroline Brussels. Coming up today, The International Energy

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Speaker 2: Agency is said to propose the largest ever release of

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Speaker 2: oil reserves as the Iran War halts tanker flows, President

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Speaker 2: Trump threatens to sink Iranian ships laying mines in the

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Speaker 2: Strait of Hormuz, as conflicting White House statement stoke market volatility.

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Speaker 3: Plus hedged no more. Top funds lose one and a

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Speaker 3: half billion dollars in a single week as events in

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Speaker 3: the Middle East up end portfolios.

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

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Speaker 3: The International Energy Agency is said to be proposing the

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Speaker 3: largest release of oil reserves and its history, with the

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Speaker 3: aim of bringing down crude prices that have soared during

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Speaker 3: the Iran War. The Wall Street Journal reports of the

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Speaker 3: release would exceed the one hundred and eighty two million

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Speaker 3: barrels used following Russia's full scale invasion of Ukraine in

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Speaker 3: twenty twenty two. The near total closure of the Strait

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Speaker 3: of Hormuz has led to production cuts from golf producers

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Speaker 3: as tankers remain unable to cross the narrow strait and

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Speaker 3: storage is filling up. And Donaharri, founder of Vanda, insides

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Speaker 3: that says it will be hard for the IA to

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Speaker 3: fill the output gap.

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Speaker 1: We are now past ten days of the war. The

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Speaker 1: market has already lost about two hundred million barrels, give

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Speaker 1: or take.

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Speaker 4: If the IA.

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Speaker 1: Countries released that much of oil, and a separate question

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Speaker 1: over what period of time they'll be able to release that,

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Speaker 1: that would simply make up what the market has already lost.

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Speaker 1: Then every single day after that that the war continues

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Speaker 1: and the strait remains closed. What do we do?

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Speaker 3: Van donah Harry was speaking as countries are expected to

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Speaker 3: decide on the proposal today. According to the report, the

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Speaker 3: thirty two nations that belong to the IA collectively held

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Speaker 3: at least one point two billion barrels of oil in

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Speaker 3: emergency stocks.

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Speaker 2: US news outlet's say that Iran has begun laying mines

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Speaker 2: in the Strait of Hormuz. CNN reports that Iran has

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Speaker 2: laid a few dozen minds in the strait in recent days. Meanwhile,

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Speaker 2: CBS says that intelligence assessments indicate that Iran is taking

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Speaker 2: steps to deploy minds. Shortly after those stories were published,

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Speaker 2: President Trump took to social media to warn Iran against

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Speaker 2: laying mines in the waterway, threatening to blow up any

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Speaker 2: ship attempting to do so. In twenty nineteen, the US

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Speaker 2: Defense Intelligence Agency estimated that Iran had more than five

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Speaker 2: thousand naval minds that could be deployed quickly using small,

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Speaker 2: high speed boats. The US has been targeting Iranian mind

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Speaker 2: laying ships as part of the campaign against Iran's navy.

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Speaker 3: Investors are trying to gauge the US administration's intentions towards

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Speaker 3: Iran as its public messaging shifts rapidly. President Trump has

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Speaker 3: delivered mixed signals on the war, saying it could end soon,

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Speaker 3: while also warning that military activity may increase the US

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Speaker 3: energy Second Chris Wright posted and then deleted a social

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Speaker 3: media message stating that the US Navy had escorted an

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Speaker 3: oil tanker through the Strait of Hormuz. That prompted the

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Speaker 3: White s Press Secretary Carline Levett to respond, I was

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Speaker 3: made aware of this post.

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Speaker 4: I haven't had a chance to talk to the Energy

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Speaker 4: Secretary about it directly. However, I know the post was

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Speaker 4: taken down pretty quickly, and I can confirm that the

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Speaker 4: US Navy has not escorted a tanker or a vessel.

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Speaker 1: Well.

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Speaker 3: Prices had fallen nearly twenty percent following the initial report

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Speaker 3: before reversing course after Levitt's denial to find. Secretary Pete

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Speaker 3: Hegseth said military operations against Iran or escalating that there

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Speaker 3: is little chance of diplomatic talks.

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Speaker 4: As President Trump declared, we're crushing the enemy in an overwhelming.

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Speaker 5: Display of technical skill and military force.

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Speaker 6: We will not relent until the enemy is totally and

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Speaker 6: decisively defeated.

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Speaker 3: Whoever hessets from Marks appeared to contrast with those of

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Speaker 3: Special End Voice Steve Whitcoff, who told CNBC that the

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Speaker 3: US is in theory open to negotiations.

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Speaker 5: The President has said that he's open to communication. The

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Speaker 5: question is do they It's the same question today that

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Speaker 5: we had when we were negotiating with them. Do they

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Speaker 5: apps do they actually want to make have a diplomatic

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Speaker 5: solution here?

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Speaker 3: A lot of those white ized officials were speaking yesterday.

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Speaker 2: The European Central Bank president says that she will ensure

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Speaker 2: that the war in Iran doesn't spark the same inflation

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Speaker 2: pain for the Eurozone as Russia's invasion of Ukraine. Christine

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Speaker 2: Leguard says that she will do all that is necessary

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Speaker 2: to avoid a repeat of the spiking prices in twenty

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Speaker 2: twenty two, she was speaking to France to television on.

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Speaker 7: Economic We are in an economic situation that's different. We

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Speaker 7: are in a better situation and we have a greater

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Speaker 7: capacity to absorb shocksitude.

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Speaker 2: Christine la Guard, speaking via a translator, whip sawing oil

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Speaker 2: and gas prices have triggered concerns that INFLA, which had

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Speaker 2: settled at the ECB's two percent target, could flare up again.

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Speaker 2: It comes as the IMF's former chief economist key to

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Speaker 2: go beIN asf Toll Bloomberg, governments don't have the fiscal

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Speaker 2: capacity to respond to a prolonged economic downturn. Traders of

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Speaker 2: ramp top bets on ECB interest rate hikes since the

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Speaker 2: war began twelve days ago.

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Speaker 3: The cost of Britain meeting its net zero goal is

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Speaker 3: smaller than a single fossil fuel price shock. According to

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Speaker 3: the UK's official climate advisor, the Climate Change Committee, forecast

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Speaker 3: that roughly four billion pounds in additional spending is needed

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Speaker 3: every year to meet net zero by twenty fifty, whereas

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Speaker 3: the twenty twenty two oil price bike costs the UK

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Speaker 3: economy one hundred and eighty three billion pounds over four years.

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Speaker 3: Britain's populist Writing Reform UK Party has campaigned against green policies,

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Speaker 3: with their leader in Nigel Farag, saying the UK should

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Speaker 3: drill for more oil in the North Sea. We will

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Speaker 3: end this net.

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Speaker 8: Zero obsession which the tours started. We will end all subsidy.

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Speaker 8: We will use your energy bills. We will get industry

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Speaker 8: back in this country. We will produce our own oil,

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Speaker 8: we will produce our own gas. We'll make ourselves self

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Speaker 8: sufficient on energy, not rely on on the rest of

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Speaker 8: the world.

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Speaker 3: But Paras has been criticized for his backing of the

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Speaker 3: US and Israeli war in Iran. Yesterday, he reversed his

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Speaker 3: position on the UK's involvement, saying Britain should not get

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Speaker 3: involved in the conflict. UK gas prices have risen by

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Speaker 3: more than fifty percent since the conflict began, reigniting concern

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Speaker 3: over Britain's approach to energy security, which is heavily reliant

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Speaker 3: on imported LNG.

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Speaker 2: Now In other news, Chinese authorities have moved to restrict

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Speaker 2: the use of openclaw AI applications on the state's office computers.

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Speaker 2: The open source AI agent has been particularly popular in

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Speaker 2: the country, with companies from Tencent to JD dot Com

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Speaker 2: using it. However, the AGENTICAI platform requires unusually broad access

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Speaker 2: to private data, and it can communicate externally. Sources of

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Speaker 2: ow telling Bloomberg that employees, including those at China's state

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Speaker 2: run banks and some government agencies have been banned from

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Speaker 2: installing open claw for security reasons.

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Speaker 3: Winston Churchill will be removed from British banknotes as part

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Speaker 3: of a revamp by the Bank of England. Boomberg's ewhen

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Speaker 3: parts has the story.

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Speaker 9: War time Prime Minister Winston Churchill is out, Badgers and

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Speaker 9: hedgehogs are in following a public consultation. The next generation

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Speaker 9: of Bank of England banknotes that does feature the UK's

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Speaker 9: native wildlife. Picking historical figures to feature on the notes

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Speaker 9: has not been with our controversy in the past, and

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Speaker 9: perhaps unsurprisingly, opposition parties are making hay, with one Tory

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Speaker 9: MP calling the move wokery. But with cash now making

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Speaker 9: up only an estimated nine percent of transactions in the UK,

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Speaker 9: banknotes are becoming as endangered as some species of native

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Speaker 9: wildlife in London. I'm utine parts, Bloomberg radio.

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Speaker 2: Okay, those are a few of our top soys are

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Speaker 2: ending yes on pound notes. Right. Let's think about the market.

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Speaker 2: So oil retreating now below ninety dollars a barrel helping

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Speaker 2: to lift the market mood. So we saw Brent crewd

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Speaker 2: plunging by eleven percent yesterday. We trade exactly eighty eight

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Speaker 2: dollars this morning, but Brent, remember is forty five percent

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Speaker 2: high than it was roughly since the start of this year.

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Speaker 2: In terms of markets, Masciah Pacific indexes up by one

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Speaker 2: point two percent. Stop futures for the US are in

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Speaker 2: the green. For US sopecial futures down by four tenths

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Speaker 2: of one percent. And interesting FT report has some eyes

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Speaker 2: in the market. JP Morgan is marking down loan portfolios

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Speaker 2: for private credit. According to that FT report, Treasury is rising.

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Speaker 2: We've got US inflation report today and the dollar is

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Speaker 2: down this morning two tenths of one percent. Those are

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Speaker 2: the markets.

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Speaker 3: In a moment, We'll bring you the latest on the

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Speaker 3: Iron war. Plus how hedge funds have last hundreds of

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Speaker 3: millions of dollars over the world market moves of the

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Speaker 3: past twelve days. But another story that we've been reading

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Speaker 3: this morning on the disruption to global travel from a

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Speaker 3: series of events this year, including the war in the

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Speaker 3: Middle East. Member Computing columnist Andrea Felsted has been writing

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Speaker 3: about how destinations like Dubai, which attract generally very high

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Speaker 3: end tourists, are bracing for a sharp downturn. Of course,

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Speaker 3: the images of missiles being intercepted over the city or

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Speaker 3: stranded holidaymakers telling their stories maybe putting a lot of

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Speaker 3: travelers off. And according to data and Forward Keys, Toubai

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Speaker 3: was the fifth most visited travel destination last year. Now,

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Speaker 3: Andrea says this is part of something that is actually

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Speaker 3: a kind of a greater upending of classic travel destinations.

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Speaker 3: There's been unrest in Mexico as well, after the killing

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Speaker 3: of the cartel leader on Men Show last month. Of course, Cuba,

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Speaker 3: which is a very popular destination for Canadian tourists in particular,

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Speaker 3: being crippled by the US oil blockade as well. Now,

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Speaker 3: where will people go instead is part of the question

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Speaker 3: the travel industry is trying to answer. Rhinaier says it's

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Speaker 3: seen a surgeon bookings to European destinations, but it sort

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Speaker 3: of depends on essentially how much money you have to

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Speaker 3: be able to spend.

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Speaker 2: Yeah, well, maybe that will put paid to the protests

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Speaker 2: that we've seen in recent summers in Europe, you know,

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Speaker 2: anti tourism protests or as you say, will people be

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Speaker 2: rerouting somewhere else? And it's hard to think about holiday

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Speaker 2: making in the midst of a war, but obviously it's

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Speaker 2: very important in terms of industries for a lot of

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Speaker 2: a lot of countries and including for Dubai.

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Speaker 3: I'll put a link to Andrea's peace in our podcast

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Speaker 3: show notes. Let's bring you up to date with events

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Speaker 3: in the Middle East. Oil prices have swung wildly over

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Speaker 3: the range of comments from US officials now these reports

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Speaker 3: and the International Energy Agency about a proposal for the

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Speaker 3: largest ever release of oil reserves. We have our Middle

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Speaker 3: East managing Ezra Paul Wallace with us now for more

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Speaker 3: polp What do we know first of all about this

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Speaker 3: potential plan for oil stockpiles and would it help to

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Speaker 3: bridge the gap from supply that's been disrupted in the Gulf.

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Speaker 6: Well, this plan is in its early stages, but the

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Speaker 6: International Energy Agency, which is essentially a group of the

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Speaker 6: world's biggest energy consumers, so essentially the world's richest countries

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Speaker 6: is moving quickly because of because of all the chaos

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Speaker 6: cinema in energy markets over the last week. They're talking,

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Speaker 6: according to a Wall Street General report, of releasing something

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Speaker 6: in excess of one hundred and eighty two million barrels of.

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Speaker 2: Oil.

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Speaker 6: Now that figure was what was released in two tranches

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Speaker 6: in twenty twenty two after Russia invaded Ukraine. So by

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Speaker 6: historical standards, yes, that is a big amount to release

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Speaker 6: in terms of emergency oil reserves. But you know, just

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Speaker 6: to put it into perspective, I said, one hundred and

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Speaker 6: eighty two million barrels. Global consumption of oil is more

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Speaker 6: than one hundred million barrels a day. It's about one

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Speaker 6: hundred and five million barrels a day. So when you

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Speaker 6: put it like that, it's it's not that much. So

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Speaker 6: there was a report by Goldman today saying it would

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Speaker 6: make a slight difference to oil prices, but not a

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Speaker 6: heck of a lot. I think at most it would

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Speaker 6: it would help steady markets, but it's certainly wouldn't do

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Speaker 6: much to really bring down prices to where they were

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Speaker 6: before the Iran US tension started soaring earlier this year.

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Speaker 2: Yeah, so there are real concerns then about the Strait

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Speaker 2: of Hormuz. The tanker traffic has slowed to a really

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Speaker 2: just barely a trickle, and there are real fears about

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Speaker 2: Iran laying minds in the waterway, aren't there?

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Speaker 6: Yes, yes, there are. Hormones does not look like it's

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Speaker 6: opening any time soon, not in the next few days anyway.

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Speaker 6: That's from all the signals we're getting from Iran and

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Speaker 6: from the US and from Gulf states about the state

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Speaker 6: of the war. Minds would certainly be a big problem

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Speaker 6: and their fears about that. I think it's also important

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Speaker 6: to note though, that you know, Iran doesn't necessarily have

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Speaker 6: to lay minds or any kind of physical barrier in

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Speaker 6: the Strait of Hormuz to keep this effective closure going.

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Speaker 6: I mean, what it's done so far is threatened ships

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Speaker 6: and hit a few, and in the last hour there

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Speaker 6: was a report by an organization linked to the UK

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Speaker 6: Navy saying that a container ship has been hit Yark Moos.

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Speaker 6: So essentially that's all that Iran needs to do. It's

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Speaker 6: a fairly cheap strategy if it wants to keep this

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Speaker 6: closure going and to keep roiling energy markets. It doesn't

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Speaker 6: need to lay mind, that would be an escalation. But

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Speaker 6: even if it just keeps threatening ships or ships think

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Speaker 6: there's a threat of attacks by Iran, that will probably

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Speaker 6: be enough to stop the vast majority from sailing through

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Speaker 6: the Strait Paul.

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Speaker 3: That's the situation in the straight of WARMUS. What about

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Speaker 3: across the region this morning? What are we seeing in

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Speaker 3: terms of strikes on this twelfth day of the war.

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Speaker 6: So essentially there's not much let up. Iran is still

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Speaker 6: attacking countries across the region. In Dubai where I am,

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Speaker 6: there was an alert across the city round about midnight

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Speaker 6: and then we got an all clear signal about an

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Speaker 6: hour later. As I know, that attack, whatever it was with,

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Speaker 6: whether it was missiles or drones or both, didn't sort

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Speaker 6: of cause any damage. And most of these attacks are

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Speaker 6: being intercepted, but Iran keeps going. There were more reports

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Speaker 6: of targeting on Kuwait in the last twelve hours, and

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Speaker 6: in terms of US and Israeli attacks on Iran, they

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Speaker 6: keep going. An important to note that the Pentagon said

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Speaker 6: that yesterday was probably going to be the most intense

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Speaker 6: bombing yet of Iran and that may continue as the

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Speaker 6: US in Israel try to further degrade Iran's military capabilities.

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Speaker 2: Okay, Paul, thank you so much for being with us.

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Speaker 2: That is our Middle East Managing editor, Paul Wallace, stay

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

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Speaker 3: Hedge funds suffered hundreds of millions of dollars and losses

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Speaker 3: last week after the war against Iran triggered volatile market moves.

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Speaker 3: Our chief hedge fund correspondent Nishand Kuma joins us now

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Speaker 3: for more in Nishan Morning. Who lost money then and

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Speaker 3: how big were the losses.

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Speaker 10: The losses were across some of the largest names in

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Speaker 10: the hedge fund industry. It's still too early, but the

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Speaker 10: reports that we have so far include losses at hedge

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Speaker 10: One Giant, Millennium Management, Ballyasni gave up all its gains

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Speaker 10: for the year, Exodus Point Capital Management they gave up

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Speaker 10: all gains for the year. So yeah, it's very widespread

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Speaker 10: and it has hit some of the largest names who

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Speaker 10: manage tens of billions of dollars between them. And what

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Speaker 10: is important here is that all these hedge ones are

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Speaker 10: known for their steady returns. They should not be losing

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Speaker 10: this kind of money in such a short period of time.

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Speaker 10: Although I mean the market moves were really wild. It

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Speaker 10: was a perfect storm for hedge one, so there is

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Speaker 10: an explanation, but the losses were very deep.

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Speaker 2: Yeah, I mean set classes produced then these big shocks

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Speaker 2: or the biggest of the shocks.

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Speaker 10: So mostly it seems to be around commodities trading and

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Speaker 10: macro bets as well. One of the real pain points

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Speaker 10: was you know, rates in UK, especially where market rapidly

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Speaker 10: reprised what the Bank of England might do and two

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Speaker 10: year guilt hills jumped about thirty five basis points in

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Speaker 10: a week, so it was one bad bet. It was

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Speaker 10: multiple market moving fast at the same time in the

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Speaker 10: wrong direction that led to you know, this sort of

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Speaker 10: a perfect storm for hedge fund industry last week.

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Speaker 3: Were there any winners among this volatility?

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Speaker 10: Again, it's too early generally hedgemund's post their returns to

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Speaker 10: send it to investors on third or fourth business day onward,

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Speaker 10: so we will know. I mean, I'm sure there are

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Speaker 10: there will be some winners, especially among the hedge funds

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Speaker 10: that trade volatility, so they love this kind of a situation.

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Speaker 10: Among the larger multi strategy hedge funds. We have so

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Speaker 10: far reported that Bobby Jantce hedge fund, which was a

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Speaker 10: startup in the space, they made ten basis point. I

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Speaker 10: mean it's tiny returns, but in the overall context of

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Speaker 10: some of the biggest hedge funds losing that much money,

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Speaker 10: it's still quite respectable. So yeah, so far, very few

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Speaker 10: winners emerging.

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Speaker 2: Is there something that these companies can do now?

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Speaker 10: I mean, you know these so what the beauty of

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Speaker 10: multi strategy hedge funds is they are very well diversified.

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Speaker 10: They are run by dozens and dozens of traders doing

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Speaker 10: multiple trades across asset classes. So yeah, they were hit

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Speaker 10: and these guys are known for their amazing risk management.

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Speaker 10: They will bounce back eventually. I won't be surprised that

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Speaker 10: all these funds recover all the losses by the end

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Speaker 10: of the of the month.

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Speaker 3: For this here, this is Bloomberg Daybreak Europe, your morning

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Speaker 3: Street and beyond.

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