1
00:00:02,520 --> 00:00:07,000
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:09,520 --> 00:00:12,320
Speaker 2: They say is the Bloomberg Daybreak Ero podcast, available every

3
00:00:12,320 --> 00:00:15,800
Speaker 2: morning on Apple, Spotify or wherever you listen. It's Monday,

4
00:00:15,840 --> 00:00:18,440
Speaker 2: the seventh of April in London. I'm Stephen Carroll and.

5
00:00:18,400 --> 00:00:20,280
Speaker 3: I'm Valerie Titel. Coming up today.

6
00:00:20,320 --> 00:00:23,880
Speaker 1: The global stock market meltdown is getting worse as tariffs

7
00:00:23,920 --> 00:00:28,520
Speaker 1: for session fears and growing retaliation concerns send investors fleeing

8
00:00:28,560 --> 00:00:29,520
Speaker 1: from risk assets.

9
00:00:29,640 --> 00:00:32,479
Speaker 2: Donald Trump projects the reaction from traders as he remains

10
00:00:32,479 --> 00:00:35,960
Speaker 2: defiant on his global tariff barrage.

11
00:00:35,520 --> 00:00:39,280
Speaker 1: And the only certainty is uncertainty. Bill Ackman warns of

12
00:00:39,320 --> 00:00:43,000
Speaker 1: an economic nuclear winter, as Cure Starmer says, the world

13
00:00:43,080 --> 00:00:44,479
Speaker 1: as we knew it has gone.

14
00:00:44,600 --> 00:00:46,680
Speaker 4: Let's start with a roundup of our top stories.

15
00:00:46,920 --> 00:00:50,440
Speaker 1: Global equities are plummeting again today as investors continue to

16
00:00:50,560 --> 00:00:54,080
Speaker 1: fear Trump's tariff salvo could lead to a global recession.

17
00:00:54,480 --> 00:00:58,040
Speaker 1: European shares have opened sharply lower. The eurostock six hundred

18
00:00:58,080 --> 00:01:01,600
Speaker 1: is down five point eight percent. In Asia, Japan's nick

19
00:01:01,640 --> 00:01:04,520
Speaker 1: I two two five entered a bear market, falling twenty

20
00:01:04,560 --> 00:01:08,280
Speaker 1: percent from its high end December. The MSCI Asia Pacific

21
00:01:08,319 --> 00:01:12,280
Speaker 1: Index having its worst session since October two thousand and eight.

22
00:01:12,560 --> 00:01:16,600
Speaker 1: Futures are pointing towards heavy losses on Wall Street SMPE minis.

23
00:01:16,319 --> 00:01:17,680
Speaker 3: Down three point eight percent.

24
00:01:18,120 --> 00:01:21,279
Speaker 1: The head of Economics a Renaissance Macro Research, Neil Dutta,

25
00:01:21,360 --> 00:01:24,160
Speaker 1: says markets are sending a clear message.

26
00:01:24,240 --> 00:01:25,880
Speaker 5: You're getting to a point now where I think the

27
00:01:25,920 --> 00:01:27,640
Speaker 5: market will take on more of a role of like

28
00:01:27,680 --> 00:01:31,039
Speaker 5: an active informant, where it begins aggregating macro risk factors

29
00:01:31,040 --> 00:01:33,480
Speaker 5: and outcomes and it tells you about the future, and

30
00:01:33,520 --> 00:01:35,360
Speaker 5: then the stock market does kind of take on this

31
00:01:35,480 --> 00:01:37,720
Speaker 5: macro role, and that's kind of where we are. So

32
00:01:37,760 --> 00:01:40,679
Speaker 5: if the stock market goes down, that creates a way

33
00:01:40,680 --> 00:01:44,280
Speaker 5: of tightening financial conditions, exacerbating the uncertainty that's already out there,

34
00:01:44,319 --> 00:01:46,800
Speaker 5: and you continue to have a negative feedback loop until

35
00:01:47,600 --> 00:01:50,760
Speaker 5: policy gets investors to shift their attention.

36
00:01:50,880 --> 00:01:53,680
Speaker 1: Neil Dutta was speaking as the global route inequities was

37
00:01:53,720 --> 00:01:56,440
Speaker 1: matched by a surge in the so called fear index

38
00:01:56,520 --> 00:01:59,320
Speaker 1: the VIX, which is now at levels not seen since

39
00:01:59,360 --> 00:02:02,200
Speaker 1: the pandemic and cross the sixty level at the open.

40
00:02:02,520 --> 00:02:04,880
Speaker 2: President Donald Trump and his team are doubling down on

41
00:02:04,960 --> 00:02:08,840
Speaker 2: their tariff plan as he and his economic team dismissed investors'

42
00:02:08,880 --> 00:02:13,240
Speaker 2: fear of inflation and recession. Speaking on Air Force One yesterday,

43
00:02:13,280 --> 00:02:16,440
Speaker 2: the US leader struck a determined tone and repeatedly defended

44
00:02:16,480 --> 00:02:18,000
Speaker 2: the measures unveiled last week.

45
00:02:19,120 --> 00:02:21,960
Speaker 6: I don't want anything to go down, but sometimes you

46
00:02:21,960 --> 00:02:23,720
Speaker 6: have to take betterson to fix something.

47
00:02:24,320 --> 00:02:27,040
Speaker 2: In comments that may fuel further market fears, Trump said

48
00:02:27,040 --> 00:02:30,000
Speaker 2: he wouldn't strike deals to cut the highest tariff rates

49
00:02:30,200 --> 00:02:33,480
Speaker 2: unless countries eliminate their trade deficits with the US.

50
00:02:33,919 --> 00:02:37,720
Speaker 6: I spoke to a lot of leaders, European agent from

51
00:02:37,720 --> 00:02:38,560
Speaker 6: all over the world.

52
00:02:39,200 --> 00:02:42,160
Speaker 5: They're dying to make a deal, but I said, we're

53
00:02:42,160 --> 00:02:44,480
Speaker 5: not going to have deficits with your country.

54
00:02:44,760 --> 00:02:47,600
Speaker 2: Trump's insistence the trade deficits need to be balanced to

55
00:02:47,639 --> 00:02:51,280
Speaker 2: gain tariff relief will cause concern in many countries, as

56
00:02:51,320 --> 00:02:54,160
Speaker 2: delivering on that aim would be entirely separate from eliminating

57
00:02:54,160 --> 00:02:57,280
Speaker 2: any trade barriers or tariffs they may have on the US.

58
00:02:57,480 --> 00:02:59,960
Speaker 1: Trump's comments are the latest in a parade of def

59
00:03:00,040 --> 00:03:03,280
Speaker 1: fiance signals from the President and his top economic advisors.

60
00:03:03,680 --> 00:03:07,399
Speaker 1: The US Treasury Secretary Scott Besson, speaking on NBC's Meet

61
00:03:07,480 --> 00:03:10,280
Speaker 1: the Press, rejected the idea that they would cause a

62
00:03:10,320 --> 00:03:12,440
Speaker 1: protracted US economic contraction.

63
00:03:12,919 --> 00:03:18,360
Speaker 7: I reject that the assumption there doesn't have to be

64
00:03:18,360 --> 00:03:19,040
Speaker 7: a recession.

65
00:03:20,280 --> 00:03:21,320
Speaker 3: Who knows how.

66
00:03:21,120 --> 00:03:24,480
Speaker 7: The market is going to react in a day, in

67
00:03:24,520 --> 00:03:27,160
Speaker 7: a week. What we are looking at is building the

68
00:03:27,240 --> 00:03:31,560
Speaker 7: long term economic fundamentals for prosperity that I think the

69
00:03:31,600 --> 00:03:35,480
Speaker 7: previous administration had put us on the course toward financial calamity.

70
00:03:35,720 --> 00:03:39,320
Speaker 1: Treasury Secretary Scott Bessant, speaking to NBC's Meet the Press,

71
00:03:39,640 --> 00:03:42,360
Speaker 1: Besson said more than fifty countries had called the White

72
00:03:42,360 --> 00:03:45,760
Speaker 1: House seeking talks, but that any negotiations are going to

73
00:03:45,840 --> 00:03:46,320
Speaker 1: take time.

74
00:03:46,840 --> 00:03:49,720
Speaker 2: Prominent investors and traders have also been posting on social

75
00:03:49,800 --> 00:03:52,680
Speaker 2: media to make their views on the tariffs clear. Bloomberg's

76
00:03:52,760 --> 00:03:54,200
Speaker 2: Ewan Potts has more.

77
00:03:54,280 --> 00:03:57,360
Speaker 8: Off the two trading sessions, which saw five trillion dollars

78
00:03:57,400 --> 00:03:59,560
Speaker 8: wiped off the value of US stocks. America is a

79
00:03:59,640 --> 00:04:02,720
Speaker 8: vescal is coming to terms with its new diminished status

80
00:04:03,000 --> 00:04:06,520
Speaker 8: in the era of President Trump's trade offensive. Bill Lackman,

81
00:04:06,600 --> 00:04:09,880
Speaker 8: the founder of Pershing Square and vocal Trump supporter, posted

82
00:04:09,920 --> 00:04:13,120
Speaker 8: on x that he strongly believes launching tariffs against the

83
00:04:13,280 --> 00:04:16,960
Speaker 8: entire world is a mistake. Ray Dalio, the founder of Bridgewater,

84
00:04:17,080 --> 00:04:19,960
Speaker 8: the world's largest hedge fund warns the tariff package will

85
00:04:20,000 --> 00:04:24,320
Speaker 8: be significantly stagflationary for the United States. Ackmann went on

86
00:04:24,360 --> 00:04:26,200
Speaker 8: to say the White I should call time out on

87
00:04:26,240 --> 00:04:28,960
Speaker 8: the plans. He says, otherwise we're heading for a self

88
00:04:28,960 --> 00:04:32,480
Speaker 8: induced economic and nucular winter in London. I'm une pots

89
00:04:32,480 --> 00:04:33,279
Speaker 8: s Bloomberg Radio.

90
00:04:33,839 --> 00:04:37,040
Speaker 1: After the events of recent days, economists at Goldman Sachs

91
00:04:37,080 --> 00:04:40,520
Speaker 1: have raised the probability of a US recession from thirty five.

92
00:04:40,360 --> 00:04:41,440
Speaker 3: To forty five percent.

93
00:04:41,960 --> 00:04:44,960
Speaker 1: They now expect the FED to deliver three consecutive twenty

94
00:04:44,960 --> 00:04:48,599
Speaker 1: five basis point insurance cuts starting in June, but Warren

95
00:04:48,640 --> 00:04:51,080
Speaker 1: the Central Bank could deliver much deeper cuts in the

96
00:04:51,120 --> 00:04:55,120
Speaker 1: event of a recession. Here's Bloomberg Opinion columnist Mohammed Elarian.

97
00:04:55,839 --> 00:04:58,039
Speaker 9: I think the hardest thing for the markets right now

98
00:04:58,480 --> 00:05:01,800
Speaker 9: is not only to try to evaluate where the destination is,

99
00:05:02,080 --> 00:05:04,240
Speaker 9: but how bumpy will the journey be. And I'm saying

100
00:05:04,279 --> 00:05:08,360
Speaker 9: that because we have technicals playing in margin calls are there,

101
00:05:08,680 --> 00:05:13,120
Speaker 9: people are in fact reducing winners and losers across the

102
00:05:13,160 --> 00:05:17,799
Speaker 9: board to waste cash. Fund managers are worried about actual

103
00:05:18,200 --> 00:05:19,520
Speaker 9: and expected outflows.

104
00:05:20,520 --> 00:05:23,720
Speaker 1: Mohammad el Arian, speaking there as Goldman Sachs economists said

105
00:05:23,720 --> 00:05:27,080
Speaker 1: their baseline forecasts for some growth still rest on the

106
00:05:27,120 --> 00:05:30,760
Speaker 1: assumption that US tariffs will be reduced from their current level.

107
00:05:31,480 --> 00:05:35,200
Speaker 2: China's policymakers are discussing frontloading stimulus to counter the hit

108
00:05:35,279 --> 00:05:39,040
Speaker 2: from Donald Trump's tariffs, Bloomberg has learned. Senior officials discussed

109
00:05:39,120 --> 00:05:43,599
Speaker 2: new exports subsidies and a stock market stabilization fund. State

110
00:05:43,680 --> 00:05:46,680
Speaker 2: run media also talked about domestic demand becoming the long

111
00:05:46,760 --> 00:05:50,599
Speaker 2: term strategy for economic growth, and The Securities Times reported

112
00:05:50,640 --> 00:05:54,479
Speaker 2: that Chinese sovereign fund Central Huejin is actively carrying out

113
00:05:54,640 --> 00:05:59,120
Speaker 2: market stabilization operations today, as the onshore CSI three hundred

114
00:05:59,240 --> 00:06:01,800
Speaker 2: index of share so its biggest declines in more than

115
00:06:01,839 --> 00:06:02,520
Speaker 2: five years.

116
00:06:02,920 --> 00:06:06,400
Speaker 1: UK Prime Minister Keir Starmer says he'll announce new measures

117
00:06:06,520 --> 00:06:09,320
Speaker 1: to support British businesses in the face of the global

118
00:06:09,360 --> 00:06:12,120
Speaker 1: trade war. Writing in a newspaper over the weekend, he

119
00:06:12,240 --> 00:06:15,400
Speaker 1: said the world as we knew it has gone. Treasury

120
00:06:15,480 --> 00:06:19,359
Speaker 1: Minister Darren Jones says the support package will involve investment

121
00:06:19,440 --> 00:06:21,799
Speaker 1: in industrial policy and public services.

122
00:06:22,080 --> 00:06:24,240
Speaker 10: Globalization as we've known it for the last number of

123
00:06:24,320 --> 00:06:27,600
Speaker 10: decades has come to an end. That's why we need

124
00:06:27,640 --> 00:06:31,200
Speaker 10: Britain to be strong and resilient, also build out our

125
00:06:31,240 --> 00:06:33,680
Speaker 10: relationships with our allies and partners around the world. But

126
00:06:33,720 --> 00:06:36,680
Speaker 10: also why we have to invest in the domestic economy,

127
00:06:36,760 --> 00:06:40,080
Speaker 10: both the UK businesses but also our public services, so

128
00:06:40,200 --> 00:06:43,719
Speaker 10: that we have workers and communities who are well skilled

129
00:06:43,920 --> 00:06:45,599
Speaker 10: able to take advantages of jobs.

130
00:06:45,960 --> 00:06:48,839
Speaker 1: Jones gave no details, but after he spoke, the UK

131
00:06:48,960 --> 00:06:52,560
Speaker 1: government announced it would ease it's green targets for carmakers.

132
00:06:53,000 --> 00:06:56,239
Speaker 1: Britain has so far said it won't retaliate against Trump's

133
00:06:56,279 --> 00:06:58,599
Speaker 1: tariffs as it hopes it can secure a deal with

134
00:06:58,640 --> 00:06:59,560
Speaker 1: the United States.

135
00:07:00,000 --> 00:07:03,080
Speaker 2: Finance ministers from Italy and Spain have warned against reacting

136
00:07:03,160 --> 00:07:06,719
Speaker 2: too aggressively to Donald Trump's tariffs. There Our mars contrast

137
00:07:06,720 --> 00:07:09,760
Speaker 2: with a push by France and Germany for more forceful reaction.

138
00:07:10,200 --> 00:07:13,520
Speaker 2: Miguel Berger, the German ambassador to the UK, says trade

139
00:07:13,520 --> 00:07:16,440
Speaker 2: ministers are drawing up a list of potential countermeasures.

140
00:07:16,720 --> 00:07:19,280
Speaker 6: I think it's the biggest assault we have seen since

141
00:07:19,320 --> 00:07:21,880
Speaker 6: the end of the Second World War on global trade.

142
00:07:21,920 --> 00:07:24,280
Speaker 6: We all will have to find a way to deal

143
00:07:24,320 --> 00:07:27,520
Speaker 6: with it, and European trade ministers going to meet on

144
00:07:27,680 --> 00:07:31,040
Speaker 6: Monday and then take a decision on how to react.

145
00:07:31,160 --> 00:07:34,040
Speaker 2: Germany's ambassadors to the UK micguil Berger, speaking there ahead

146
00:07:34,040 --> 00:07:36,640
Speaker 2: of the meeting of EU trade ministers today in Luxembourg,

147
00:07:36,760 --> 00:07:40,200
Speaker 2: focused on the levies. His comments come after European Center

148
00:07:40,280 --> 00:07:44,480
Speaker 2: Bank executive board member Isabelle Schnabel suggested that US tariffs

149
00:07:44,480 --> 00:07:48,280
Speaker 2: may signify that the era of free flowing global commerce

150
00:07:48,800 --> 00:07:49,200
Speaker 2: is over.

151
00:07:49,560 --> 00:07:52,080
Speaker 1: Those are your top stories on the markets. The eurostock

152
00:07:52,120 --> 00:07:54,440
Speaker 1: six hundred, in its first hour of trade is down

153
00:07:54,520 --> 00:07:55,920
Speaker 1: five point one percent.

154
00:07:56,080 --> 00:07:56,880
Speaker 3: Losses are being.

155
00:07:56,760 --> 00:08:00,160
Speaker 1: Felt across all sectors. The EU stock six hundred, banking

156
00:08:00,240 --> 00:08:03,120
Speaker 1: sectors down nearly six percent on the session. Over on

157
00:08:03,160 --> 00:08:06,280
Speaker 1: Wall Street, SMP futures down three point six percent, Nasdaq

158
00:08:06,360 --> 00:08:09,600
Speaker 1: futures down four percent. In effect, the Bloomberg dollar is

159
00:08:09,640 --> 00:08:13,120
Speaker 1: a tenth of a percent weeker versus peers across fixed.

160
00:08:12,840 --> 00:08:14,560
Speaker 3: Income, a big rally in the front end.

161
00:08:14,560 --> 00:08:17,280
Speaker 1: Two year yields in the US down thirteen basis points

162
00:08:17,440 --> 00:08:20,040
Speaker 1: down fifteen basis points into your Germany.

163
00:08:20,080 --> 00:08:22,000
Speaker 2: Okay, so, Valerie, we are very lucky to have you

164
00:08:22,040 --> 00:08:24,440
Speaker 2: with us for this hour on Bloomberg Radio, as you.

165
00:08:24,560 --> 00:08:26,600
Speaker 4: Are, of course, are our market's voice.

166
00:08:26,960 --> 00:08:30,480
Speaker 2: During the program, across Bloomberg Radio and television as well.

167
00:08:30,520 --> 00:08:32,800
Speaker 2: And this is the day to be thinking about the

168
00:08:32,840 --> 00:08:35,800
Speaker 2: scale of the moves that we're seeing, looking at the

169
00:08:35,840 --> 00:08:38,160
Speaker 2: stock six hundred being down and in fact all of

170
00:08:38,160 --> 00:08:40,640
Speaker 2: the European markets down over five percent as well, looking

171
00:08:40,640 --> 00:08:42,800
Speaker 2: ahead to what's happening on Wall Street as well, where

172
00:08:42,840 --> 00:08:46,000
Speaker 2: we're in for another pretty bruising day ahead.

173
00:08:46,360 --> 00:08:49,760
Speaker 1: Yeah, if this move in the futures market holds until

174
00:08:49,760 --> 00:08:52,720
Speaker 1: the closed, Stephen, we are looking at the worst three

175
00:08:52,800 --> 00:08:56,480
Speaker 1: days for the US equity market since Black Monday back

176
00:08:56,520 --> 00:08:59,680
Speaker 1: in nineteen eighty seven. Even the two day move though

177
00:09:00,080 --> 00:09:02,839
Speaker 1: from Friday and Thursday of last week, stands out as

178
00:09:02,880 --> 00:09:05,000
Speaker 1: one of the worst two day slides that we've seen.

179
00:09:05,040 --> 00:09:08,000
Speaker 1: It joins the board with the slide of nineteen eighty seven,

180
00:09:08,120 --> 00:09:11,120
Speaker 1: with the slide of the global financial crisis and the

181
00:09:11,160 --> 00:09:14,280
Speaker 1: COVID slide back in March twenty twenty. And what a

182
00:09:14,320 --> 00:09:18,160
Speaker 1: pummeling session when it comes to Asian equities. A lot

183
00:09:18,200 --> 00:09:21,520
Speaker 1: of these Asian indices had their worst session since October

184
00:09:21,800 --> 00:09:24,560
Speaker 1: two thousand and eight, and they closed at the lows.

185
00:09:24,720 --> 00:09:27,160
Speaker 2: Yeah, I mean, look, the hangsanging down thirteen percent. Pretty

186
00:09:27,160 --> 00:09:30,200
Speaker 2: astonishing there. Let's dig into some of the other sides

187
00:09:30,200 --> 00:09:32,320
Speaker 2: of these trades though, as well, as investors have been

188
00:09:32,320 --> 00:09:34,480
Speaker 2: looking for haven assets and a big rally in bonds

189
00:09:34,480 --> 00:09:36,679
Speaker 2: we're seeing as a result. Our managing editor for FX

190
00:09:36,679 --> 00:09:39,160
Speaker 2: and Rachel Evans, is with us as well.

191
00:09:39,280 --> 00:09:41,319
Speaker 4: Rachel looking at the moves.

192
00:09:41,040 --> 00:09:43,280
Speaker 2: On European yields first of all this morning, I mean,

193
00:09:43,320 --> 00:09:47,080
Speaker 2: Germans to your yield down sixteen basis points. This feels

194
00:09:47,120 --> 00:09:49,240
Speaker 2: like it's accelerating from last week.

195
00:09:49,559 --> 00:09:51,200
Speaker 11: Yeah, I mean we're trying to get that feeling that

196
00:09:51,240 --> 00:09:53,800
Speaker 11: you know, this isn't going to be necessarily contained to

197
00:09:53,880 --> 00:09:55,760
Speaker 11: a few days, you know, with the moves kind of

198
00:09:55,880 --> 00:09:59,040
Speaker 11: very much going far beyond US assets. I think like

199
00:09:59,160 --> 00:10:01,400
Speaker 11: last week, you know, the US was very much kind

200
00:10:01,440 --> 00:10:04,000
Speaker 11: of front and center and that was really where the

201
00:10:04,000 --> 00:10:07,880
Speaker 11: worst of the action was. That still kind of holds today,

202
00:10:07,880 --> 00:10:09,400
Speaker 11: but we're starting to get you know a little bit

203
00:10:09,400 --> 00:10:12,320
Speaker 11: of a bigger move kind of coming through into European

204
00:10:12,360 --> 00:10:14,600
Speaker 11: assets as well. So we did see ye that the

205
00:10:14,600 --> 00:10:17,319
Speaker 11: two year yield on the German burn actually falling twenty

206
00:10:17,320 --> 00:10:20,120
Speaker 11: basis points at one point, and I was really taken

207
00:10:20,240 --> 00:10:21,640
Speaker 11: last week by the fact that, you know, by the

208
00:10:21,760 --> 00:10:23,680
Speaker 11: end of Friday we'd actually seen all of the big

209
00:10:23,760 --> 00:10:25,680
Speaker 11: yield surge that we saw in the wake of that

210
00:10:25,760 --> 00:10:29,120
Speaker 11: fiscal plan that that Germany announced at the beginning of March, Yeah,

211
00:10:29,160 --> 00:10:30,680
Speaker 11: just a little over a month ago. That it feels

212
00:10:30,679 --> 00:10:32,960
Speaker 11: like a lifetime that's all gone and we're kind of

213
00:10:32,960 --> 00:10:35,360
Speaker 11: back here on the ten years to yielding basically the

214
00:10:35,360 --> 00:10:38,880
Speaker 11: same before that that that fiscal spending plan was announced.

215
00:10:39,280 --> 00:10:43,200
Speaker 2: But we're seeing these big moves in yields, but not

216
00:10:43,440 --> 00:10:46,760
Speaker 2: equally spread across the European economies either. I note that

217
00:10:46,760 --> 00:10:48,880
Speaker 2: that as of these eels aren't moving anywhere near the

218
00:10:48,920 --> 00:10:51,959
Speaker 2: same size and the spread they're really blowing out between

219
00:10:52,000 --> 00:10:53,720
Speaker 2: German and Italian yields.

220
00:10:53,720 --> 00:10:54,840
Speaker 4: What should we be reading into that?

221
00:10:55,800 --> 00:10:57,400
Speaker 11: I think it's really just at this point kind of

222
00:10:57,559 --> 00:10:59,959
Speaker 11: a sense of you know, risk on versus risk of asset.

223
00:11:00,160 --> 00:11:02,400
Speaker 11: You know, bums are definitely getting a bid because they

224
00:11:02,440 --> 00:11:05,080
Speaker 11: are seen as kind of the safest asset in Europe.

225
00:11:05,320 --> 00:11:07,520
Speaker 11: So if you're not interested in treasuries, and maybe the

226
00:11:07,559 --> 00:11:10,160
Speaker 11: appeal there has diminished somewhat given that, you know, the

227
00:11:10,320 --> 00:11:14,120
Speaker 11: US sort of framework for treasuries and for for U

228
00:11:14,200 --> 00:11:16,720
Speaker 11: stock seems to have weakened. You know, you can't necessarily

229
00:11:16,720 --> 00:11:18,320
Speaker 11: rely on the US in a way that maybe you

230
00:11:18,400 --> 00:11:21,280
Speaker 11: once were. That whole US exceptionalism story is kind of

231
00:11:21,400 --> 00:11:24,000
Speaker 11: fracturing a little, you know, maybe you'd go into buns instead.

232
00:11:24,000 --> 00:11:26,480
Speaker 11: They've always been kind of europe safe haven, whereas you're

233
00:11:26,559 --> 00:11:29,520
Speaker 11: on the Italian side, that's very much still counts as

234
00:11:29,559 --> 00:11:32,440
Speaker 11: as a risk asset. Were Obviously, Italy has had a

235
00:11:32,440 --> 00:11:35,360
Speaker 11: lot of debt issues over the years, so investors tend

236
00:11:35,720 --> 00:11:39,040
Speaker 11: to get out of those sort of bonds more quickly

237
00:11:39,080 --> 00:11:41,080
Speaker 11: than they would something else. So I think that's what

238
00:11:41,120 --> 00:11:42,640
Speaker 11: you're seeing. Really, there's kind of just sort of this

239
00:11:43,040 --> 00:11:46,320
Speaker 11: preference for safe havens and flight away from risk.

240
00:11:46,320 --> 00:11:47,160
Speaker 4: Effet Valerie.

241
00:11:47,200 --> 00:11:49,880
Speaker 2: The question of volumes kind of key to watch here

242
00:11:49,880 --> 00:11:53,400
Speaker 2: when we're thinking about the context for these size of

243
00:11:53,480 --> 00:11:54,520
Speaker 2: moves that we're looking at.

244
00:11:54,840 --> 00:11:57,800
Speaker 1: Yeah, it's interesting to note that in Friday's s and

245
00:11:57,840 --> 00:12:01,360
Speaker 1: P five hundred slide, there was a healthy volumes going

246
00:12:01,400 --> 00:12:04,000
Speaker 1: into that. So this is a market that is still

247
00:12:04,080 --> 00:12:07,560
Speaker 1: functioning properly. And that's one thing to note because one

248
00:12:07,559 --> 00:12:10,440
Speaker 1: thing about the COVID slide, I mean, that was nasty

249
00:12:10,480 --> 00:12:13,319
Speaker 1: on all levels. Because the treasury market essentially broke, We're

250
00:12:13,320 --> 00:12:16,720
Speaker 1: not necessarily seeing markets breaking in that terms. Even in

251
00:12:16,760 --> 00:12:19,079
Speaker 1: the Asia session overnight, you know, the Hong Kong stock

252
00:12:19,120 --> 00:12:22,839
Speaker 1: index saw a record amount of turnover. To me, that

253
00:12:23,600 --> 00:12:26,480
Speaker 1: a healthy market slide, if that makes sense. We're not

254
00:12:26,520 --> 00:12:29,960
Speaker 1: seeing these gaps lower on no volumes. So in that way,

255
00:12:30,240 --> 00:12:32,600
Speaker 1: maybe is one thing that can make us feel a

256
00:12:32,600 --> 00:12:36,559
Speaker 1: bit more positive about this move, is that we're not

257
00:12:36,600 --> 00:12:39,240
Speaker 1: necessarily seeing a massive gap one way or the other.

258
00:12:39,720 --> 00:12:41,960
Speaker 2: You've been looking at the European banks moving this morning,

259
00:12:41,960 --> 00:12:44,280
Speaker 2: because that's been kind of one of the dramatic sets

260
00:12:44,320 --> 00:12:46,679
Speaker 2: of moves we've seen among many. We should say, but

261
00:12:46,760 --> 00:12:49,400
Speaker 2: does that necessarily translate into the Wall Street session later?

262
00:12:49,640 --> 00:12:52,520
Speaker 1: I think so because the banks, the decline in the

263
00:12:52,559 --> 00:12:57,040
Speaker 1: eurostocks banks is basically a reflection of credit spreads widening

264
00:12:57,440 --> 00:13:00,520
Speaker 1: and the market positioning for a slowdown where you know,

265
00:13:00,559 --> 00:13:03,679
Speaker 1: we see bankruptcies, so those high yield.

266
00:13:03,480 --> 00:13:05,200
Speaker 3: Junk credit names, you know, the.

267
00:13:07,000 --> 00:13:09,800
Speaker 1: Probability of bankruptcy goes up, which means that banks will

268
00:13:09,800 --> 00:13:12,080
Speaker 1: be holding more losses on those loans.

269
00:13:12,080 --> 00:13:13,920
Speaker 3: That was something that was mirrored in the US session

270
00:13:13,960 --> 00:13:14,280
Speaker 3: as well.

271
00:13:14,320 --> 00:13:17,960
Speaker 1: So the dynamic isn't just isolated to hear in Europe

272
00:13:17,960 --> 00:13:20,680
Speaker 1: credit spreads or widening globally We even saw it in Asia.

273
00:13:20,720 --> 00:13:23,880
Speaker 1: Even the CDs spreads on some of these Asian nations

274
00:13:23,920 --> 00:13:26,400
Speaker 1: blew out as well. That's just you know, the market

275
00:13:26,400 --> 00:13:29,680
Speaker 1: really questioning the business model of some of these nations

276
00:13:29,720 --> 00:13:32,559
Speaker 1: if these tariffs are to stay in, you know, for

277
00:13:32,600 --> 00:13:36,680
Speaker 1: some time for a matter of months. The Eurostocks Bank

278
00:13:36,720 --> 00:13:40,560
Speaker 1: INDECKS that's SX seven E is down nineteen percent in

279
00:13:40,600 --> 00:13:43,360
Speaker 1: the last to three days. That's definitely something that I'm

280
00:13:43,400 --> 00:13:45,520
Speaker 1: sure the ECB does not want to see.

281
00:13:45,679 --> 00:13:49,360
Speaker 2: Rachel thinking about where we go from here, what sort

282
00:13:49,400 --> 00:13:53,320
Speaker 2: of catalysts do markets need to see, any reversal of

283
00:13:53,360 --> 00:13:55,760
Speaker 2: the sentiment that's driven us to where we are now.

284
00:13:55,800 --> 00:13:59,040
Speaker 2: Donald Trump says to forget about the markets.

285
00:13:58,760 --> 00:14:01,160
Speaker 4: Will they start looking else for catalysts?

286
00:14:01,440 --> 00:14:02,760
Speaker 11: And I think, you know, there was a lot of

287
00:14:02,800 --> 00:14:06,880
Speaker 11: attention on sort of drown Poals speech on Friday kind

288
00:14:06,880 --> 00:14:08,679
Speaker 11: of this hope that, you know, if there wasn't going

289
00:14:08,720 --> 00:14:10,240
Speaker 11: to be a trumpet, if Trump wasn't going to come

290
00:14:10,280 --> 00:14:11,960
Speaker 11: in and save the market, then maybe there might be

291
00:14:12,000 --> 00:14:15,080
Speaker 11: still the lingering hopes of a FED put And certainly

292
00:14:15,160 --> 00:14:18,040
Speaker 11: your Powell's kind of comments on Friday suggested that they're

293
00:14:18,160 --> 00:14:21,800
Speaker 11: very concerned still about inflation. And whether tariff brings you know,

294
00:14:21,960 --> 00:14:24,160
Speaker 11: an inflation reimpact, whereas I think the market is more

295
00:14:24,200 --> 00:14:26,680
Speaker 11: focused on the growth impact. I think if that starts

296
00:14:26,720 --> 00:14:28,880
Speaker 11: to change, that's the sort of thing that could go

297
00:14:28,960 --> 00:14:30,560
Speaker 11: either way. You could see that as you know, a

298
00:14:30,640 --> 00:14:32,560
Speaker 11: sign that all things are so bad that the FED

299
00:14:32,560 --> 00:14:34,760
Speaker 11: has to kind of change its stance at panic time,

300
00:14:35,240 --> 00:14:37,600
Speaker 11: or you could see people taking some reassurance from the

301
00:14:37,640 --> 00:14:39,400
Speaker 11: fact that the Fed will step in. You know that

302
00:14:39,480 --> 00:14:42,480
Speaker 11: the market is starting to kind of price in a

303
00:14:42,560 --> 00:14:45,440
Speaker 11: May cup more seriously, we now see that as more

304
00:14:45,480 --> 00:14:48,000
Speaker 11: than fifty percent likely. And there are also the beginnings

305
00:14:48,000 --> 00:14:50,840
Speaker 11: of bets on the potential for an emergency rate cut.

306
00:14:50,880 --> 00:14:53,640
Speaker 11: Now that's definitely not the base case scenario, particularly as

307
00:14:53,680 --> 00:14:56,480
Speaker 11: we don't have a May cut fully priced in yet,

308
00:14:56,520 --> 00:14:58,960
Speaker 11: but those are the sorts of bets that are starting

309
00:14:59,000 --> 00:15:01,360
Speaker 11: to be placed because I think everyone is so in

310
00:15:01,480 --> 00:15:03,840
Speaker 11: need of some sense of stability and are looking to

311
00:15:03,880 --> 00:15:05,480
Speaker 11: try and find it kind of any way they can.

312
00:15:05,800 --> 00:15:08,560
Speaker 2: And just on the question of volatility, while we have

313
00:15:08,600 --> 00:15:11,080
Speaker 2: seen that spike in the Vicks this morning, you know,

314
00:15:11,360 --> 00:15:16,800
Speaker 2: a pretty significant move in that that gauge of volatility,

315
00:15:17,360 --> 00:15:19,240
Speaker 2: I mean, how rough is today going to be?

316
00:15:19,280 --> 00:15:19,800
Speaker 4: On Wall Street.

317
00:15:20,360 --> 00:15:22,440
Speaker 1: Yeah, the Vicks when it did open up, which was

318
00:15:22,520 --> 00:15:25,120
Speaker 1: just an hour ago, across the sixty level mark, which

319
00:15:25,160 --> 00:15:27,760
Speaker 1: is something we haven't seen in some time. And you know,

320
00:15:27,760 --> 00:15:30,880
Speaker 1: it goes back to saying that the three day slide

321
00:15:30,880 --> 00:15:32,520
Speaker 1: that we've seen in the acuity market.

322
00:15:32,280 --> 00:15:34,040
Speaker 3: Is lining up just to be one of.

323
00:15:33,960 --> 00:15:36,600
Speaker 1: The worst that we've seen since World War Two.

324
00:15:37,160 --> 00:15:39,880
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

325
00:15:39,920 --> 00:15:43,000
Speaker 2: stories making news from London to Wall Street and beyond.

326
00:15:43,280 --> 00:15:46,440
Speaker 12: Look for us on your podcast feed every morning, on Apple,

327
00:15:46,600 --> 00:15:49,280
Speaker 12: Spotify and anywhere else you get your podcasts.

328
00:15:49,320 --> 00:15:52,360
Speaker 2: You can also listen live each morning on London Dab Radio,

329
00:15:52,400 --> 00:15:55,080
Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

330
00:15:55,160 --> 00:15:57,920
Speaker 12: Our flagship New York station is also available on your

331
00:15:57,920 --> 00:16:02,640
Speaker 12: Amazon Alexa devices. Just Alexa play Bloomberg eleven thirty.

332
00:16:02,880 --> 00:16:04,640
Speaker 4: I'm Caroline Hepka and I'm Stephen.

333
00:16:04,680 --> 00:16:07,240
Speaker 2: Carol. Join us again tomorrow morning for all the news

334
00:16:07,280 --> 00:16:09,880
Speaker 2: you need to start your day right here on Bloomberg

335
00:16:09,920 --> 00:16:12,960
Speaker 2: Daybreak Europe.