WEBVTT - Daybreak Weekend: Nvidia Earnings, G7 Meeting, Taiwan President 0:00:02.920 --> 0:00:12.680 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Daybreak Weekend, 0:00:12.680 --> 0:00:14.640 our global look at the top stories in the coming 0:00:14.640 --> 0:00:17.239 week from our Daybreak anchors all around the world, and 0:00:17.280 --> 0:00:19.560 straight ahead on the program, a look at the struggling 0:00:19.760 --> 0:00:22.639 US housing market. I'm Tom Busby in New York. 0:00:22.880 --> 0:00:25.280 I'm Stephen carlon London, where we're looking ahead to how 0:00:25.320 --> 0:00:28.360 issues around trade and the war in Ukraine will feature 0:00:28.440 --> 0:00:31.320 at the upcoming meeting of G seven finance ministers and 0:00:31.480 --> 0:00:32.920 central bankers in Italy. 0:00:33.280 --> 0:00:35.839 I'm Brian Curtis in Hong Kong. We look ahead to 0:00:35.880 --> 0:00:39.680 the inauguration of Taiwan President elect Lyiching Da and what 0:00:39.760 --> 0:00:42.880 it means for Taiwan, US and China relations. 0:00:43.880 --> 0:00:47.159 That's all straight ahead on Bloomberg day Break Weekend on 0:00:47.320 --> 0:00:50.160 Bloomberg Ey Look the Free Own New York, Bloomberg ninety 0:00:50.240 --> 0:00:53.800 nine to one, Washington, d C, Bloomberg one O six one, Boston, 0:00:53.880 --> 0:00:58.680 Bloomberg nine sixty, San Francisco, DAB, Digital Radio, London, Sirius 0:00:58.840 --> 0:01:02.080 XM one nineteen and around the world on Bloomberg Radio 0:01:02.160 --> 0:01:04.400 dot com and via the Bloomberg Business App. 0:01:08.800 --> 0:01:09.320 Good day to you. 0:01:09.440 --> 0:01:11.920 I'm Tom Busby, and we begin today's program with home 0:01:12.000 --> 0:01:14.560 sales for the month of April, the heart of the 0:01:14.600 --> 0:01:18.119 spring home buying season. We get existing home sales on Wednesday, 0:01:18.640 --> 0:01:21.959 new home sales on Thursday. What will these reports tell 0:01:22.040 --> 0:01:24.600 us about the health of the US housing market, about 0:01:24.640 --> 0:01:28.480 housing affordability and the overall economy? For more, we're joined 0:01:28.480 --> 0:01:33.320 by Drew Redding, Bloomberg Intelligence US home Building Analysts. Drew, 0:01:33.440 --> 0:01:34.560 thanks for being here. 0:01:34.840 --> 0:01:35.360 Travl me. 0:01:35.720 --> 0:01:38.240 All right, so what do you expect to see this week? 0:01:38.680 --> 0:01:41.600 Well, I think some context is important here. We've been 0:01:41.720 --> 0:01:45.880 describing the housing market as a tail to markets. Existing 0:01:45.920 --> 0:01:50.280 home sales finally broke back about four million annalyzed run 0:01:50.360 --> 0:01:53.280 rate two months ago, and we think we'll probably remain 0:01:53.320 --> 0:01:55.120 above those levels. But what you have to keep in 0:01:55.160 --> 0:01:58.480 mind is the data that we're seeing now still reflects 0:01:58.760 --> 0:02:02.520 a period where rates were in that high six percent range. 0:02:02.920 --> 0:02:05.960 Subsequently rates rose to over you know, seven and a 0:02:06.000 --> 0:02:07.840 half percent, So we think that date is going to 0:02:08.320 --> 0:02:10.360 trickle in into the next couple of months. We expect 0:02:10.360 --> 0:02:13.560 some volatility on the existing home front side, you know, 0:02:13.760 --> 0:02:15.960 over the next couple of months and through the summer. 0:02:16.320 --> 0:02:19.160 But big picture, you know, it's It's difficult to get 0:02:19.240 --> 0:02:22.600 too excited about a significant rebound in existing home sales 0:02:22.639 --> 0:02:25.680 when you have mortgage rates that are still hovering around 0:02:25.720 --> 0:02:28.600 seven percent. We just actually fell below that for the 0:02:28.639 --> 0:02:31.399 first time since April. We're at about six point nine 0:02:31.480 --> 0:02:34.000 right now, so you know that will add a little 0:02:34.040 --> 0:02:36.440 momentum to the market. But big picture, we're not expecting 0:02:36.440 --> 0:02:39.200 any type of significant, you know, rebound maybe until we 0:02:39.200 --> 0:02:42.080 get to twenty twenty five and even into twenty twenty six. 0:02:42.440 --> 0:02:44.480 Now you can trust that what we're seeing in the 0:02:44.520 --> 0:02:46.800 new home market. Demand in the new home sign has 0:02:46.840 --> 0:02:49.360 been a lot stronger, and that's because builders have been 0:02:49.400 --> 0:02:53.360 successful in pulling the levers in terms of financing incentives, 0:02:53.400 --> 0:02:56.320 closing costs, assistance, and things like that. So you know, 0:02:56.320 --> 0:02:58.440 they've been able to make the monthly payment a little 0:02:58.480 --> 0:03:01.200 more palatable than what you see on the resale side. 0:03:01.360 --> 0:03:04.440 Well, that's the problem, isn't it. Home affordability. You've got 0:03:04.520 --> 0:03:07.320 rates near seven percent, You've got record high prices for 0:03:07.440 --> 0:03:10.359 new and used homes. Plus you know there's just a 0:03:10.440 --> 0:03:12.560 lack of homes on the market. I mean, how are 0:03:13.000 --> 0:03:13.880 people affording this? 0:03:14.600 --> 0:03:18.840 It's one hundred percent all about afford affordability is, you know, 0:03:18.919 --> 0:03:22.040 hovering near the worst levels on record. We were looking 0:03:22.080 --> 0:03:24.400 at some data from redfind It actually shows the medium 0:03:24.400 --> 0:03:27.520 monthly payment is about twenty nine hundred dollars, which is 0:03:27.560 --> 0:03:30.760 fourteen percent above last month, and that's more than double 0:03:30.760 --> 0:03:34.280 where we were prior to the pandemic. You've had prices 0:03:34.320 --> 0:03:37.360 which increased more than fifty percent since the beginning of 0:03:37.400 --> 0:03:39.960 twenty twenty, and you know, depending on the index that 0:03:40.000 --> 0:03:42.520 you look at, we're either pretty close to those levels now, 0:03:43.000 --> 0:03:46.480 if not higher. And there's been certainly been some momentum 0:03:46.680 --> 0:03:48.800 of late with pricing, and part of that has to 0:03:48.800 --> 0:03:52.000 do with what you mentioned. Inventory in the resale market, 0:03:52.000 --> 0:03:54.520 we're still at about three months of supply, which is 0:03:54.800 --> 0:03:58.000 historically low, and that's putting a floor on the prices. 0:03:58.040 --> 0:03:59.800 There's there's demand out there and there's not a whole 0:03:59.800 --> 0:04:01.760 lot of inventory that's pushing prices up. 0:04:02.160 --> 0:04:02.360 Now. 0:04:02.400 --> 0:04:05.880 We have seen inventory in some markets start to rise, 0:04:05.920 --> 0:04:07.560 which is something we where to keep our eye on. 0:04:07.680 --> 0:04:10.760 You look at markets in Florida, a couple of markets 0:04:10.760 --> 0:04:14.360 in Texas like Austin, so that could have implications for 0:04:14.440 --> 0:04:17.640 prices should inventories continue to rise. But but you're right 0:04:17.680 --> 0:04:20.320 at this point, it's just difficult for the consumer to 0:04:20.400 --> 0:04:23.160 afford a house, and that's really what's held the market back. 0:04:23.640 --> 0:04:26.560 Now, this has also impacted the troubles in housing the 0:04:26.600 --> 0:04:30.880 broader economy not always bad or not all bad, but 0:04:31.080 --> 0:04:34.640 like home builders, home renovation still going pretty strong, but 0:04:35.000 --> 0:04:38.520 people aren't buying big ticket appliances. Home Depot confirming that 0:04:39.080 --> 0:04:43.680 high margin items grills, power washers, refrigerators. You know, it's 0:04:43.720 --> 0:04:45.760 really impacting a lot of other businesses. 0:04:46.240 --> 0:04:49.120 It's certainly been a challenging backdrop for the consumer. You 0:04:49.120 --> 0:04:52.400 have to remember, you know, they're battling the cumulative impact 0:04:52.440 --> 0:04:54.839 of inflation. So you know, even when you see inflation 0:04:54.960 --> 0:04:57.720 coming down to three percent, it's still inflation and it's 0:04:57.760 --> 0:05:01.280 been going on for years. So it's really the cumulative 0:05:01.320 --> 0:05:04.159 impact that we're seeing. You're seeing credit card balances rise, 0:05:04.760 --> 0:05:06.280 and you know, when you talk about some of the 0:05:06.360 --> 0:05:09.520 names that we cover, like A Home Depot and A Lows, 0:05:09.640 --> 0:05:12.240 they're really seeing it on the discretionary side and on 0:05:12.320 --> 0:05:15.480 the big ticket products in particular. You know, they've got 0:05:15.520 --> 0:05:19.320 a little bit of a unique situation in that, you know, 0:05:19.400 --> 0:05:21.880 some of the products they sell are what they call 0:05:21.960 --> 0:05:24.240 one time purchases. So if you think about, you know, 0:05:24.279 --> 0:05:26.400 the early days of the pandemic, people loaded up on 0:05:26.880 --> 0:05:30.200 you know, grill's patio furniture, lawn mowers and things like that, 0:05:30.720 --> 0:05:32.640 and that's just something that you don't need to replace 0:05:32.640 --> 0:05:35.320 as frequently. So they've been contending with that. But at 0:05:35.320 --> 0:05:38.240 the same time, something they mentioned this quarter that was 0:05:38.279 --> 0:05:42.120 pretty interesting is that they're seeing weakness in projects that 0:05:42.160 --> 0:05:45.200 are typically debt financed, which goes back to that mortgage 0:05:45.240 --> 0:05:48.359 rate or the interest rate dynamic, and that it's just 0:05:48.520 --> 0:05:51.400 a lot more expensive to get these projects done. So 0:05:51.440 --> 0:05:55.200 we're seeing you know, kitchens and bath projects being deferred, 0:05:55.440 --> 0:05:59.040 or we're seeing projects, you know, kind of being toned 0:05:59.080 --> 0:06:01.640 down in size. We've heard that from home DEEPO, We've 0:06:01.640 --> 0:06:03.760 heard that some from a handful of the building product 0:06:03.839 --> 0:06:04.920 manufacturers as well. 0:06:05.240 --> 0:06:07.400 Yeah you need a new roof, you've got to get 0:06:07.400 --> 0:06:10.560 a new roof, but maybe not a new kitchen. Looking ahead, 0:06:10.600 --> 0:06:13.920 do you see or can you see any green shoots 0:06:14.120 --> 0:06:16.760 later in the year or into twenty twenty five or 0:06:16.800 --> 0:06:19.240 does it all depend on maybe what the FED does 0:06:19.279 --> 0:06:20.279 with interest rates. 0:06:20.520 --> 0:06:22.520 Yeah, well, look, I think that I think Holsing Broadley 0:06:22.640 --> 0:06:25.120 is going to continue to EBB and flow with what 0:06:25.200 --> 0:06:28.240 happens with interest rates. That being said, I mean, if 0:06:28.279 --> 0:06:30.960 you could call this a bright picture, I mean, existing 0:06:30.960 --> 0:06:33.280 home sales are the lowest level they's been in you know, 0:06:33.320 --> 0:06:37.479 two decades, so we think we've probably reached are very 0:06:37.520 --> 0:06:40.520 close to trough levels. So we do think that if 0:06:40.600 --> 0:06:42.359 rates start to pull back a little bit and you 0:06:42.360 --> 0:06:45.240 get to that mid six percent range, you know, you 0:06:45.279 --> 0:06:47.800 could start to see some growth towards the back end 0:06:47.800 --> 0:06:50.840 of this year and as we get into twenty twenty five. 0:06:50.960 --> 0:06:52.800 So the way we look at it now is there's 0:06:52.880 --> 0:06:55.960 not a whole lot of downside risk with where the 0:06:56.000 --> 0:06:59.159 economy stands now, with where employment stands now. You know, 0:06:59.240 --> 0:07:02.880 obviously if those things deteriorate further, that's a concern, you know, 0:07:02.920 --> 0:07:05.240 But looking ahead, we think you could start to build 0:07:05.240 --> 0:07:07.359 a little bit momentum looking into next year. And on 0:07:07.400 --> 0:07:10.840 the remodeling side, we think that a lot of these projects, 0:07:10.840 --> 0:07:13.200 as we mentioned, are being deferred, So we think there's 0:07:13.200 --> 0:07:15.200 a lot of pent up demand that starts to get 0:07:15.280 --> 0:07:18.480 unleashed in twenty twenty five and twenty twenty six. As 0:07:18.560 --> 0:07:21.520 rates pull back, people are able to tap that record 0:07:21.520 --> 0:07:23.920 amount of home equity they have, and we think that 0:07:23.920 --> 0:07:26.640 that'll ultimately support a rebound in big ticket spending. 0:07:27.120 --> 0:07:29.480 So if you're a painter or a drywall guide, just 0:07:29.520 --> 0:07:32.680 told on tight Well our thanks to Drew Redding, Bloomberg 0:07:32.800 --> 0:07:36.160 Intelligence US home building analyst. We move now to big 0:07:36.200 --> 0:07:38.440 tech and chip maker and Video, which has been on 0:07:38.520 --> 0:07:41.640 a roll, seeing its market value balloon thanks to demand 0:07:41.640 --> 0:07:44.920 for its artificial intelligence chips, also its data center and 0:07:45.000 --> 0:07:47.800 gaming offerings. What does it all mean for the company's 0:07:47.840 --> 0:07:50.640 earnings out this Wednesday. Well for more, we're joined by 0:07:50.680 --> 0:07:56.520 Kunjan Sobanni, Bloomberg Intelligence Senior semiconductor analyst, Konjohn Thanks for 0:07:56.600 --> 0:07:58.840 joining us. Why don't you start right away? What do 0:07:58.880 --> 0:08:01.520 you expect to see in vidious first quarter earnings? 0:08:02.160 --> 0:08:04.160 Well, just similar to what we have been seeing for 0:08:04.200 --> 0:08:07.400 the past almost six plus quarters, We again expect a 0:08:07.720 --> 0:08:11.960 solid beaten race coming into this earnings. Throughout the quarter, 0:08:12.040 --> 0:08:18.360 we have seen multiple strong demand signals, namely its largest 0:08:18.400 --> 0:08:23.720 cloud and hyperscaled customers all upsiding their hapexpend guidance for 0:08:23.800 --> 0:08:27.640 AI for twenty twenty four and twenty five. Second, we 0:08:27.760 --> 0:08:32.160 have seen strong demand from outside of the cloud players, 0:08:32.240 --> 0:08:38.520 namely Sogn, Wild Government, entities, other enterprises, large enterprises like 0:08:38.559 --> 0:08:41.959 the deal we saw about Elon purchasing about ten billion 0:08:42.000 --> 0:08:45.040 dollars of AI capacity from Oracle, etc. 0:08:45.640 --> 0:08:47.400 So and all the same. 0:08:47.240 --> 0:08:50.000 Time, we have seen the h one hundred lean times 0:08:50.040 --> 0:08:52.959 continue to shrink. What that means is supply continue to 0:08:53.080 --> 0:08:56.160 keeps up for that product family. So the combination of 0:08:56.200 --> 0:08:59.200 all of this gives us confidence again they will be 0:08:59.280 --> 0:09:00.480 coming out with US Beta. 0:09:00.559 --> 0:09:03.800 DACE now in video appears to be far ahead of 0:09:03.840 --> 0:09:06.839 a lot of US competitors on AI. And how important 0:09:06.880 --> 0:09:09.200 is that for this earnings and for the company? 0:09:09.800 --> 0:09:13.400 I mean, it is important, and that's why you see 0:09:13.400 --> 0:09:18.640 this level of positive sentiment around the stock and what 0:09:18.720 --> 0:09:21.520 you've seen in the return. I mean, it still continues 0:09:21.559 --> 0:09:24.680 to be the market leader and has a market share 0:09:24.720 --> 0:09:29.560 in the mid nineties, which we expected to continue at 0:09:29.679 --> 0:09:34.000 least for the foreseeable future. So that is definitely a 0:09:34.040 --> 0:09:36.000 big part of the story right now. 0:09:36.640 --> 0:09:40.319 And to keep up with that demand, How is it growing? 0:09:40.440 --> 0:09:44.479 Where is Nvidia expanding here in the US and worldwide? 0:09:45.040 --> 0:09:47.000 I mean it is global at this point if you 0:09:47.000 --> 0:09:51.160 think about it. Look, it's the only sort of almost 0:09:51.600 --> 0:09:54.800 the only game in the town, and the town being globally, 0:09:55.040 --> 0:09:58.080 if you want to set up a high end AI 0:09:58.240 --> 0:10:03.040 server to train model, there's only really one go to 0:10:03.240 --> 0:10:04.520 full tax solution right now. 0:10:04.520 --> 0:10:05.240 We just in media. 0:10:05.679 --> 0:10:07.840 We do have AMD, which has entered the game, but 0:10:07.920 --> 0:10:11.120 again the scale is significantly different. 0:10:11.280 --> 0:10:13.839 Here in Media's making is going to. 0:10:13.760 --> 0:10:17.120 Be generating about in the sort of between fifty to 0:10:17.200 --> 0:10:20.040 eighty billion dollars from its data center it's here, and 0:10:20.640 --> 0:10:23.520 on the contrast, AMD is projected to generate about four 0:10:23.559 --> 0:10:26.280 billion from its cview business. So, I mean, look, the 0:10:26.320 --> 0:10:29.640 demand is globally now when it comes to allocation. When 0:10:29.640 --> 0:10:32.920 it comes to where its customers are residing, a big 0:10:32.960 --> 0:10:36.840 portion majority is in US in the West, but it 0:10:36.920 --> 0:10:40.280 is also trying to allocate as much as it can 0:10:40.440 --> 0:10:42.360 to most of its consider outside of US. 0:10:42.600 --> 0:10:44.760 Well, that brings me to the next point, the growing 0:10:44.800 --> 0:10:47.640 trade war between the US and China. There was a 0:10:47.800 --> 0:10:52.520 ban on advanced chips selling them another technology to China, 0:10:52.600 --> 0:10:56.120 implemented last year. We know that President Biden just last 0:10:56.160 --> 0:10:59.439 week up the nite with a whole bunch of tariffs 0:10:59.760 --> 0:11:03.480 on all kinds of Chinese products. How has that impacted 0:11:03.480 --> 0:11:07.040 in video and the wider chip you know, semiconductor market 0:11:07.080 --> 0:11:08.040 here in the US. 0:11:08.400 --> 0:11:11.280 Yeah, it has impacted Nvidia, I would say the most. 0:11:11.960 --> 0:11:15.240 If you actually go back almost two years back, the 0:11:15.679 --> 0:11:20.440 very first ban in this data center space came on 0:11:20.679 --> 0:11:25.400 in media specific chips. So from that time when China 0:11:25.480 --> 0:11:30.880 represented about mid twenties percentage of revenue of its data 0:11:30.920 --> 0:11:34.080 center segment, all the way to now this year, we 0:11:34.160 --> 0:11:37.880 expected to be somewhere between mid single digit to high 0:11:37.960 --> 0:11:40.800 single digits. So that gives you a magnitude that it 0:11:40.880 --> 0:11:44.480 has lost the potential that it could have been shipped 0:11:44.520 --> 0:11:47.200 in absence of these bands and billions of dollars to China. 0:11:47.280 --> 0:11:49.720 So that's the company that has most been impacted. And 0:11:50.120 --> 0:11:54.440 I think a lot of restrictions and bands have heavily 0:11:54.480 --> 0:11:57.640 focused on in media chips initially. What you're seeing now 0:11:57.720 --> 0:12:01.319 is sort of those bands get ex span, their range 0:12:01.360 --> 0:12:05.800 getting expand As again, regulation always runs behind technology, So 0:12:05.840 --> 0:12:08.200 what you're seeing is now out those impacting in other 0:12:08.280 --> 0:12:11.840 players like Intel, like Caulcom and AMD, etc. 0:12:12.640 --> 0:12:14.920 And Vidia's the big name, and in Vidia's first quarter 0:12:14.960 --> 0:12:18.800 earnings out this Wednesday. Our thanks to Kunjan Sobanni, Bloomberg 0:12:18.840 --> 0:12:23.120 Intelligence Senior semiconductor analyst, coming up on Bloomberg Day Break 0:12:23.120 --> 0:12:25.320 weekend to look ahead to the upcoming meeting of G 0:12:25.600 --> 0:12:30.160 seven finance ministers and central bankers in Italy. I'm Tom 0:12:30.200 --> 0:12:43.800 Busby and this is Bloomberg. This is Bloomberg day Break weekend, 0:12:43.800 --> 0:12:46.199 our global look ahead at the top stories for investors 0:12:46.200 --> 0:12:48.640 in the coming week. I'm Tom Busby in New York. 0:12:48.920 --> 0:12:50.840 Up later on our program, we look ahead to the 0:12:50.840 --> 0:12:55.160 inauguration of Taiwan President elect Ley ching Da and what 0:12:55.200 --> 0:12:59.520 it means for Taiwan, the US and China relations. But first, 0:13:00.080 --> 0:13:02.720 G seven finance ministers meeting this week in the northern 0:13:02.800 --> 0:13:06.120 Italian town of Stressa as representatives to reflect on the 0:13:06.200 --> 0:13:09.960 fragmentation of global trade. For more, Let's go to London 0:13:10.000 --> 0:13:13.360 and bring in Bloomberg Daybreak. Europe Banker Stephen Carroll. 0:13:13.840 --> 0:13:16.880 Tom, Italy's Finance Minister and Central Bank governor, will be 0:13:16.920 --> 0:13:20.400 hosting this G seven meeting on the banks of Lake Majore. 0:13:20.760 --> 0:13:24.280 It's a majestic setting to discuss some weighty topics, not 0:13:24.400 --> 0:13:27.320 least the latest ratcheting up of trade tensions between the 0:13:27.400 --> 0:13:30.840 United States and China, as well as Russia's war in 0:13:31.040 --> 0:13:34.120 Ukraine and the Ukrainian Finance Minister will be attending with 0:13:34.200 --> 0:13:38.160 issues around the use of frozen Russian assets on the agenda. 0:13:38.600 --> 0:13:41.400 Both the United States and the European Union have struggled 0:13:41.440 --> 0:13:44.559 to mobilize the help that Kiev needs to defend itself, 0:13:44.720 --> 0:13:47.240 as AID has been caught up in other political debates 0:13:47.679 --> 0:13:50.120 in the EU. There's also a discussion about how best 0:13:50.200 --> 0:13:54.600 to bolster the European defense industry. Here's what European Investment 0:13:54.600 --> 0:13:58.560 Bank President Nadia Calvino told Bloomberg that her institution is 0:13:58.600 --> 0:13:59.360 doing about this. 0:14:00.160 --> 0:14:02.040 I think it's quite clear that we need to step 0:14:02.120 --> 0:14:05.240 up our support to Europe's security and defense industry. We 0:14:05.280 --> 0:14:10.760 need to reinforce our capacity in this area, and the 0:14:10.920 --> 0:14:14.240 European Investment Bank is ready to play its role in 0:14:14.280 --> 0:14:16.040 supporting Europe's defense industry. 0:14:16.600 --> 0:14:17.600 From this point of view. 0:14:17.679 --> 0:14:20.400 What we have done is put forward an action plan 0:14:20.480 --> 0:14:24.720 which has been endorsed by our board last week and 0:14:24.800 --> 0:14:27.760 this up and running since first of May, and which 0:14:27.800 --> 0:14:34.120 will indeed allow us to finance dual use technologies and infrastructures, 0:14:34.400 --> 0:14:37.560 removing a constraint that existed which required that more than 0:14:37.600 --> 0:14:41.080 fifty percent of future revenues should come from the civil 0:14:41.200 --> 0:14:42.440 use side for it to be. 0:14:42.440 --> 0:14:45.120 Financed right, and so now it's zero percent, but there 0:14:45.160 --> 0:14:47.640 still is this mandate of dual use. So just for 0:14:47.800 --> 0:14:50.840 to understand better how this actually works, because this doesn't 0:14:50.880 --> 0:14:52.920 mean that you can, for example, invest in something that 0:14:52.960 --> 0:14:56.000 produces a ammunition, which isn't what is in high sort 0:14:56.040 --> 0:14:58.120 of need right now for Ukraine and in Europe. 0:14:58.120 --> 0:14:58.480 Correct. 0:14:58.640 --> 0:15:01.040 Well, we are an investment bank and the mandate from 0:15:01.040 --> 0:15:03.560 European leaders was cleared that we should step up our 0:15:03.560 --> 0:15:07.880 support to europe security and defense industry while safeguarding our 0:15:08.000 --> 0:15:09.040 financing capacity. 0:15:09.360 --> 0:15:11.640 And this is what we have been doing. This is 0:15:11.680 --> 0:15:12.640 what we are doing. 0:15:13.120 --> 0:15:16.280 The reaction of financial markets is confirming that we're on 0:15:16.320 --> 0:15:19.640 the right track, and our Board of Directors endorsed our 0:15:19.680 --> 0:15:23.000 strategy as recently as last week. And so now we 0:15:23.080 --> 0:15:25.720 have this action plan which should allow us to speed 0:15:25.800 --> 0:15:29.440 up with the investment of the six billion euros which 0:15:29.480 --> 0:15:31.240 are already earmarked for this industry. 0:15:31.320 --> 0:15:33.040 Yeah, and so those also, I mean six billion is 0:15:33.040 --> 0:15:35.680 also quite a small proportion of the entire fund. Are 0:15:35.680 --> 0:15:38.000 you looking at potentially boosting that over the years, just 0:15:38.040 --> 0:15:39.880 given the scale of the need that there is in 0:15:39.960 --> 0:15:40.800 European defense. 0:15:41.360 --> 0:15:42.760 We have six billion euros. 0:15:42.840 --> 0:15:47.080 Actually the program was had eight billion euros ear marked, 0:15:47.120 --> 0:15:50.280 we have only invested two billion euros. We're focusing right 0:15:50.360 --> 0:15:52.720 now in speeding up the investment of these six billion 0:15:52.720 --> 0:15:56.120 euros and also getting up and running a capital investment 0:15:56.200 --> 0:15:59.240 of one hundred and seventy five million euros in startups, 0:15:59.240 --> 0:16:01.440 innovative startups also in this area. 0:16:01.520 --> 0:16:03.280 And for those two billion, was it just because there 0:16:03.320 --> 0:16:04.960 wasn't demand for the loans or is it because there 0:16:04.960 --> 0:16:06.840 were all these rules around and you hope that that 0:16:06.960 --> 0:16:08.320 capital can get to work well. 0:16:08.360 --> 0:16:13.240 Obviously, we are now expanding, enlarging the scope of projects 0:16:13.360 --> 0:16:16.360 that we can finance. We are also speeding up these 0:16:16.400 --> 0:16:20.880 divestments with a single stop shop with a dedicated team, 0:16:21.160 --> 0:16:23.280 and we're going to be proactively reaching out. 0:16:23.320 --> 0:16:24.880 Actually, we have launched a call for. 0:16:24.880 --> 0:16:27.960 Projects, and so our expectation is that in the second 0:16:27.960 --> 0:16:30.080 part of the year there will be more projects, more 0:16:30.120 --> 0:16:33.480 demand as you named it, and that we will be 0:16:33.520 --> 0:16:35.680 able to step up our support to europe security and 0:16:35.720 --> 0:16:38.960 defense industry while safeguarding our financing capacity, which is the 0:16:39.000 --> 0:16:39.680 mandate from MARS. 0:16:39.760 --> 0:16:42.680 When you say safeguarding your financing capacity is to do 0:16:42.720 --> 0:16:44.720 with the credit rating, you think that could be jeopardized 0:16:44.720 --> 0:16:46.840 by investing in these sorts of companies, what exactly is 0:16:46.880 --> 0:16:47.880 the relationship there? 0:16:48.040 --> 0:16:52.080 Well, obviously rating agencies, but also investors are looking carefully 0:16:52.120 --> 0:16:55.800 at many areas that have to do with our financing capacity. 0:16:56.520 --> 0:16:59.520 So far, as I was saying, financial markets are responding 0:16:59.520 --> 0:17:03.280 as we had anticipated, and our Board of Directors indoors 0:17:03.360 --> 0:17:06.000 last week our action plan which will allow us to 0:17:06.040 --> 0:17:06.959 step up our support. 0:17:07.359 --> 0:17:10.000 And in terms of the eb's rule and rebuilding Ukraine 0:17:10.000 --> 0:17:12.440 and funding that, how do you imagine the ib's role 0:17:12.440 --> 0:17:12.639 in that. 0:17:13.200 --> 0:17:15.040 Well, we're playing a very important role already. 0:17:15.080 --> 0:17:20.320 We're probably the key financing investor partner to the Ukrainian government. 0:17:20.359 --> 0:17:21.560 We're very close contact. 0:17:21.880 --> 0:17:24.800 Only some weeks ago I signed a memorandrov of understanding 0:17:24.840 --> 0:17:27.760 with Prime Minister Smichael, and I hope that in June 0:17:27.760 --> 0:17:30.679 we will be able to already sign some specific projects 0:17:30.800 --> 0:17:33.720 and speed up our investments on the ground in large 0:17:33.760 --> 0:17:39.440 infrastructures energy transport, also in municipal and local projects having 0:17:39.480 --> 0:17:45.680 to do with restoring and renovating, rebuilding schools, hospital houses, 0:17:46.000 --> 0:17:48.760 and also supporting the private sector. Many of these projects 0:17:48.800 --> 0:17:52.399 are already ongoing and as of the signature of the 0:17:52.480 --> 0:17:54.760 memorandum of understanding, I think we will be able to 0:17:54.800 --> 0:17:58.159 do more while the war is unfortunately going on. I 0:17:58.200 --> 0:18:00.240 hope we will be able to step up our support 0:18:00.480 --> 0:18:03.120 with the rebuilding of the country once the war is over. 0:18:03.640 --> 0:18:07.080 That's the European Investment Bank President Nadia Calvino there speaking 0:18:07.160 --> 0:18:10.320 to Bloomberg's Oliver Crook in recent days. Now, Oliver will 0:18:10.320 --> 0:18:13.720 also be attending the G seven meeting in Straisa along 0:18:13.760 --> 0:18:16.639 with finance ministers and central bankers. I've been speaking to 0:18:16.720 --> 0:18:18.920 him about it and started by asking him how much 0:18:19.000 --> 0:18:23.119 the latest announcement of increased US tariffs on Chinese goods 0:18:23.359 --> 0:18:25.439 will be weighing on ministers' minds. 0:18:26.359 --> 0:18:28.520 I think it'll be weighing on their minds very very much, 0:18:28.520 --> 0:18:30.480 in part because it's so fresh and it just sort 0:18:30.480 --> 0:18:32.520 of dropped just you know, just before the meeting. And 0:18:32.520 --> 0:18:33.960 then on the other side of the meeting, of course, 0:18:34.000 --> 0:18:36.160 you're going to get the initial report from the EU 0:18:36.200 --> 0:18:38.520 in terms of the ev probe that they're going into China. 0:18:38.600 --> 0:18:40.200 So trade is really going to be front and center 0:18:40.280 --> 0:18:43.159 for both the finance ministers and the central bankers, who 0:18:43.200 --> 0:18:45.719 are both present there. For the central bankers, obviously this 0:18:45.760 --> 0:18:47.840 is also a big question in terms of inflation because 0:18:47.840 --> 0:18:50.719 if we're dealing with just one off things, that's one thing. 0:18:50.720 --> 0:18:53.080 If we're talking about basically the beginning of another kind 0:18:53.119 --> 0:18:55.119 of trade war and tit for tat, this could have 0:18:55.200 --> 0:18:58.399 huge implications for inflation to what degrees. So they'll be 0:18:58.440 --> 0:19:00.680 exchanging notes, you know, it's the ec be the FED 0:19:00.720 --> 0:19:02.920 will be there much. The FED is setting the tone 0:19:02.920 --> 0:19:05.080 for global interest rates, and of course the question will 0:19:05.119 --> 0:19:08.520 be will China retaliate. Biden has been quite targeted in 0:19:08.560 --> 0:19:11.159 terms of this. These sounds like a lot of import 0:19:11.280 --> 0:19:13.800 tariffs on the evs, you know, quadrupling, but really it's 0:19:13.800 --> 0:19:16.800 only touching about eighteen billion dollars a trade because obviously 0:19:16.800 --> 0:19:19.080 he's very conscious of not wanting to get those prices 0:19:19.119 --> 0:19:21.200 going up, particularly in an election year. 0:19:21.640 --> 0:19:24.240 Yeah, indeed, that's a big concern for them too. Around 0:19:24.240 --> 0:19:28.080 the G seven table though, Ali, how much divergence is 0:19:28.119 --> 0:19:31.120 there on the approach, the approach to China and trades. 0:19:31.680 --> 0:19:33.240 So I think it's interesting if you look at just 0:19:33.280 --> 0:19:35.479 the United States and Europe, you know what I mean. 0:19:35.520 --> 0:19:37.640 I mean, you have them sort of singing a bit 0:19:37.680 --> 0:19:39.840 from the same hymn sheet in terms of the sort 0:19:39.880 --> 0:19:43.280 of general message, which is that China has engaged in 0:19:43.359 --> 0:19:46.240 unfair trade practices. But ma Cole, for example, has really 0:19:46.320 --> 0:19:48.000 kept the door open saying that he's not going to 0:19:48.000 --> 0:19:50.639 be dragged in around the world by US foreign policy, 0:19:50.640 --> 0:19:52.879 which is sort of an allusion to Taiwan and the 0:19:52.920 --> 0:19:55.800 evidence of that. That's a message that's kind of resounded 0:19:55.800 --> 0:19:58.679 with Hashijiping because he came to France. You know, he 0:19:58.720 --> 0:20:00.840 came to Europe for the first time in five years. 0:20:00.960 --> 0:20:03.359 He came to France, but he also came to Hungary, 0:20:03.359 --> 0:20:05.240 which is another country that kind of takes us to 0:20:05.280 --> 0:20:08.359 the within Europe question of China. You know, China has 0:20:08.400 --> 0:20:11.280 had huge manufacturing production in Hungary. The you know, c 0:20:11.440 --> 0:20:14.160 atl the battery manufacturer, has opened up a factory. Now 0:20:14.160 --> 0:20:17.119 we understand byd is there the Europeans are looking at 0:20:17.119 --> 0:20:20.040 this because Hungary is often a political outlier. Could this 0:20:20.160 --> 0:20:22.239