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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Today's The Bloomberg Daybreak

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Speaker 1: Euroup podcast available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Thursday, the first of May in London.

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Speaker 1: I'm Stephen Carroll. Coming up today. The US and Ukraine

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Speaker 1: sign a deal over access to the country's natural resources.

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Speaker 1: Donald Trump concedes his approach to global trade poses significant

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Speaker 1: political risks, as Microsoft and Meta shrug off economic turbulence

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Speaker 1: to deliver results that defy expectations plus unclear instructions, The

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Speaker 1: boss of Ikia's owner tells us they've no choice but

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Speaker 1: to wait and see as tariffs create uncertainty for businesses

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Speaker 1: and consumers. Let's start with a roundup of our top stories.

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Speaker 1: The United States and Ukraine have reached a deal over

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Speaker 1: access to Ukraine's natural resources. Under the agreement, America will

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Speaker 1: be given privileged access to new investment projects to deliver

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Speaker 1: things like aluminium, graph oil, and natural gas. The deal

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Speaker 1: is seen as an important step in securing President Trump's

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Speaker 1: goodwill toward Kiev, as his administration continues efforts to end

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Speaker 1: the war that began with Russia's full scale invasion more

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Speaker 1: than three years ago. His US Treasury Secretary Scott Bessant.

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Speaker 2: Today's agreement signals clearly to Russian leadership that the Trump

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Speaker 2: administration is committed to a peace process centered on a free,

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Speaker 2: sovereign and prosperous Ukraine over the long term. It's time

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Speaker 2: for this cruel and senseless war to end.

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Speaker 1: Scott Besont, speaking there is the signing eases tensions between

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Speaker 1: the two countries. Ukrainian President Vladimir Zelenski traveled to Washington

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Speaker 1: in February to sign a deal, but returned empty handed

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Speaker 1: after a tense on camera exchanged with President Trump and

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Speaker 1: Vice President j D. Vance in the Oval Office. Donald

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Speaker 1: Trump has acknowledged that his sweeping tariff program poses significant

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Speaker 1: political risks to his presidency, but the US president says

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Speaker 1: he won't rush into deals to appeace nervous investors. Speaking

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Speaker 1: during a town hall event, Trump said he remained determined

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Speaker 1: to push on and he believes he'll be able to

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Speaker 1: convince people how good this is. Trump was also asked

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Speaker 1: by News Nation host Bill O'Reilly if he agreed that

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Speaker 1: his tariff proposals had a perception problem.

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Speaker 3: Yeah, but I'm an honest guy, and we have to

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Speaker 3: save the country. We were losing five billion dollars a

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Speaker 3: day with this man that we had as a president.

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Speaker 3: The autopen as president. Nobody even knows who the president was.

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Speaker 3: We're losing. Think of it. We're losing five billion dollars

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Speaker 3: a day, and a big chunk of it was from China.

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Speaker 3: Now China is sending its boats back. The boats are

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Speaker 3: not being unloaded because they have a one hundred and

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Speaker 3: forty five percent tariff, which is, you know, a record

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Speaker 3: setting type tariff.

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Speaker 1: Trump spoke at that News Nation town hall event via

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Speaker 1: a video link after data shows that the US economy

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Speaker 1: contracted at the start of the year for the first

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Speaker 1: time since twenty twenty two.

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Speaker 4: Inflation ofju justed.

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Speaker 1: GDP increased at an annualized rate of zero point three percent,

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Speaker 1: dragged down by a surge in imports as firms appeared

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Speaker 1: to be front running US tariffs. Trump says he should

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Speaker 1: get a pass on the data, as his administration was

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Speaker 1: just getting used to things. The European Union will present

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Speaker 1: US officials with proposals next week aim at kickstarting trade negotiations.

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Speaker 4: Bloomberg has learned. The ideas include.

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Speaker 1: Lowering trade and non tariff barriers, as well as boosting

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Speaker 1: European investment in the US. Our sources say the EU

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Speaker 1: is also preparing for a worst case scenario if negotiations fail,

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Speaker 1: including lists of US goods to hit with counter tariffs

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Speaker 1: and possible export restrictions.

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Speaker 4: Here's Bloomberg's kayy lines in Washington.

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Speaker 5: What's important about this is we understand that this proposal

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Speaker 5: on trade includes both tariff and non tariff barriers, perhaps

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Speaker 5: in recognition of the kind of language we've heard from

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Speaker 5: administration officials around the issues with Europe specifically.

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Speaker 1: That's Spoomberg' kay lines in Washington. It comes as ABRISS

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Speaker 1: think tank says Kirstarmer's government won't be able to avoid

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Speaker 1: uncomfortable trade offs on areas such as human rights when

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Speaker 1: negotiating trade partnerships in an increasingly unstable and uncertain world.

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Speaker 1: The IPPR, which is close links to the Labor Party,

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Speaker 1: says the UK will need to be pragmatic about trade

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Speaker 1: deals with countries that don't share all our values and

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Speaker 1: flexible in observing international law. Microsoft shares sewared in after

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Speaker 1: hours trading on the back of better than expected sales

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Speaker 1: and profit growth. Total revenue during the third quarter of

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Speaker 1: the financial euros by thirteen percent to just over seventy

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Speaker 1: billion dollars. Gains were bolstered by the firm's Azure Cloud unit,

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Speaker 1: which attributed sixteen percentage points of its growth to artificial

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Speaker 1: intelligence products. CEO sach Andadalla says the company's AI capabilities

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Speaker 1: are growing rapidly.

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Speaker 6: Now I'll highlight examples, starting with infrastructure. We continue to

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Speaker 6: expand our data center capacity. This quarter alone, reopened dcs

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Speaker 6: in ten countries across four continents. Model capabilities are doubling

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Speaker 6: in performance every six months thanks to multiple compounding scaling laws.

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Speaker 4: Microsoft's such An Adella.

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Speaker 1: Speaking there, Microsoft shares rose by almost seven percent in

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Speaker 1: after hours trading yesterday. Staying with tech news, Meta also

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Speaker 1: reported estimate beating financial results defying tariff concerns. The Facebook

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Speaker 1: and Instagram parent announced forty two point three billion dollars

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Speaker 1: in first quarter sales, beating analyst expectations for forty one

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Speaker 1: point four billion dollars. Speaking after the news, Meta CEO

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Speaker 1: Mark Zuckerberg told investors the firm.

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Speaker 4: Is ready to face market volatility.

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Speaker 7: We've had a strong start to the year. Our community

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Speaker 7: keeps growing, with more than three point four billion people

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Speaker 7: now using at least one of our apps each day.

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Speaker 7: Our business is also performing very well, and I think

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Speaker 7: we're well positioned to navigate the macroeconomic uncertainty.

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Speaker 1: Max Zuckerberg, speaking there, The company says it expects to

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Speaker 1: spend between sixty four and seventy two billion dollars this year,

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Speaker 1: attributing some of the increase to tariffs imposed by the

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Speaker 1: Trump administration. Meta also says it's responding to the trade

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Speaker 1: war by rethinking suppliers and optimizing its supply chain. And

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Speaker 1: Polls open today in some parts of England for local

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Speaker 1: and mayoral elections. Changes to councils means there are fewer

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Speaker 1: positions being voted on than in previous years, but the

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Speaker 1: vote is the first big set of polls since Labour's

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Speaker 1: landslide election victory last year. Those are your top stories

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Speaker 1: on the markets. We had US docs jumping into Wednesday's close,

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Speaker 1: extending a winning streak, the S and P five hundred

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Speaker 1: finishing up two tenths of one percent, seven sessions in

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Speaker 1: a row now of gains, and futures pointing higher again

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Speaker 1: one point one percent higher for smp E mini futures,

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Speaker 1: while Nasdaq futures are up by one and a half

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Speaker 1: percent of course, the earnings for Microsoft and Meta in

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Speaker 1: focus there as well. Treasuries also clinching a seven day

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Speaker 1: winning streak tenure yields of fawn over twenty basis points.

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Speaker 4: They're up two today to four point one to.

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Speaker 1: Eight percent on the tenuere The dollar also continuing to recover,

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Speaker 1: trading a quarter of one percent higher on the Bloomberg

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Speaker 1: Dollar Spot Index. The yen is six tenth week or

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Speaker 1: after the Bank of Japan held interest rates steady. We're

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Speaker 1: also watching gold prices down again today by one point

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Speaker 1: eight percent to three thousand, two hundred and twenty eight

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Speaker 1: dollars at troy ounce. In a moment, we'll bring you

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Speaker 1: more on the US Ukraine deal on natural resources, plus

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Speaker 1: what the boss of the group operating hundreds of Ikea

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Speaker 1: stores around the world told us about the impact of tariffs.

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Speaker 1: But on the question of Meta's earnings, I was been

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Speaker 1: reading Bloomberg Opinion Dave Lee's column about this this morning,

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Speaker 1: and in particular comments that drew a lot of attention

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Speaker 1: in Meta's statement about how their warning of a materially

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Speaker 1: worse user experience for European users because of rules introduced

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Speaker 1: under the EA's Digital Markets Acts now, Davelye says this

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Speaker 1: essentially means that the social media giant will now expect

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Speaker 1: to make significantly less money from users in Europe than

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Speaker 1: it otherwise would have. So what actually might be verterially

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Speaker 1: worse is actually for Meta itself unclear exactly how it

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Speaker 1: would make the user experience worse for users of Meta's platform.

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Speaker 1: Meta made about sixteen percent of its global revenue in

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Speaker 1: the EU last year. They're currently in this battle with

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Speaker 1: the EU over the EU demands under the legislation to

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Speaker 1: offer less personalized ads and better protect users personal data

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Speaker 1: as a result, and now Meta offered a version of this,

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Speaker 1: the EU hasn't approved that yet. It also didn't welcome

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Speaker 1: Meta's idea for a paying subscription that would give users

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Speaker 1: no ads. But as davely points out, these changes are

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Speaker 1: coming at a delicate time for advertising sales. Growth outside

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Speaker 1: the US is slowing. Although this report was very strong

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Speaker 1: from Meta, and the impact of tarfs, particularly in what

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Speaker 1: it means for Chinese advertisers advertising targeting American consumers, is

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Speaker 1: still unclear. Lots of detail in his piece. You can

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Speaker 1: read at Bloomberg dot com for its last opinion, and

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Speaker 1: we'll put a link to it in.

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Speaker 4: Our podcast show notes as well.

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Speaker 7: Well.

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Speaker 1: Let's bring you more now on the deal between the

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Speaker 1: US and Ukraine over access to natural resources. Our EMEA

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Speaker 1: and NES director Rosalind Matheson joins US now for more

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Speaker 1: Roz good mourning.

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Speaker 4: What exactly does this deal entail?

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Speaker 8: Well, what it does is actually gives the US privileged

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Speaker 8: access to new investment projects, and that's to develop Ukraine's

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Speaker 8: natural resources, of which it has potentially quite a bit.

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Speaker 8: It is changed somewhat for the initial deal that was

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Speaker 8: talked about, and that's too after some objections from the

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Speaker 8: Ukrainians that the negotiations got quite contentious of course throughout.

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Speaker 8: And what it does now cover is actually reimbursing the

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Speaker 8: US for future military assistance to Ukraine rather than all

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Speaker 8: the military assistance that's.

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Speaker 4: Been provided already.

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Speaker 8: And it does keep the door open under the terms

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Speaker 8: of this deal for Kiev to push ahead with its

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Speaker 8: intent at least or its desire to join the EU.

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Speaker 8: But what it is is essentially a fund which is

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Speaker 8: financed by revenues from these new licenses will be everything

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Speaker 8: from critical minerals to oil and gas. The US gets

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Speaker 8: first claim on the profits that are transferred into that fund,

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Speaker 8: and it's jointly managed by both nations. So this gives

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Speaker 8: Ukraine and economic link to the US, strong economic ties.

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Speaker 8: It gives the US some investment opportunities in Ukraine. It's

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Speaker 8: not a hard security guarantee though for Ukraine.

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Speaker 4: So overall, I mean, is this a good deal for Kiev?

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Speaker 8: Well, it's better, arguably than the original terms of the deal,

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Speaker 8: which we're seen as very much favoring the US and

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Speaker 8: giving the US in essence control over a large part

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Speaker 8: of Ukraine's economy. So some of the terms have been

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Speaker 8: altered here in the final version, and the US would

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Speaker 8: argue that economic ties really are a version of security

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Speaker 8: ties because it binds the US into Ukraine's future and

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Speaker 8: its future success. But it's not a hard security guarantee,

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Speaker 8: and certainly it's not a military guarantee, and it's not

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Speaker 8: anything that says that the US would come to Ukraine's

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Speaker 8: aid militarily potentially in the future. So it does give

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Speaker 8: Ukraine something in its pocket, and it does also signal

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Speaker 8: to Donald Trump that the Ukraine is serious about trying

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Speaker 8: to reach a cease far.

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Speaker 1: What does this mean for Donald Trump though? Is it

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Speaker 1: something that he can claim as a victory at a

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Speaker 1: time when he's under pressure over the impact of his

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Speaker 1: trade policies on the US economy.

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Speaker 4: Well, that's right.

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Speaker 8: He does need to declare at least a few victories,

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Speaker 8: and it gives him something. He can say, I've got

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Speaker 8: a tangible deal here in my pocket. He is looking

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Speaker 8: at an economy in the US where it's under some

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Speaker 8: pressure over He is quite volatile policy making when it

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Speaker 8: comes to trade, and you can see that showing up

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Speaker 8: in sentiment and other data in the US now. And

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Speaker 8: he does need some runs on the board. He says

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Speaker 8: he's got trade deals coming with individual countries, but he

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Speaker 8: doesn't have any of those so far. And of course

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Speaker 8: we know, you know, separately, fighting has resumed in Gaza.

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Speaker 8: Israel is back in there, its troops are back in

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Speaker 8: there fighting Hamas in Gaza. So there's been no quick

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Speaker 8: resolution to that conflict either. It does give me a win,

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Speaker 8: but there's still no broader CEASPA yet arranged when it

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Speaker 8: comes to Ukraine.

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Speaker 4: Okay, Rosla mats and our Amaa andis director, thank you

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Speaker 4: very much.

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Speaker 1: Well, let's turn fron of the story now. Donald Trump

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Speaker 1: saying he's not going to rush into deals to appease

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Speaker 1: investors uncertainty over his tariff. So US consumer confidence though

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Speaker 1: slumping to its lowest level in almost five years, and

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Speaker 1: it's been dented elsewhere to by fears over the impact

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Speaker 1: of the trade levees. The Swedish furniture chain ike operates

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Speaker 1: in more than sixty countries worldwide, including a significant presence

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Speaker 1: in the United States. The CEO of the Inca Group,

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Speaker 1: which operates most of IKEA's stores, has been speaking to

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Speaker 1: Bloomberg about how they're adapting to the tariff uncertainty.

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Speaker 9: We liking any companies benefit from stable relations, predictable relations,

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Speaker 9: and of course where there it's free trade or low

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Speaker 9: TARO for arrangements, normally that leads to less inflation and

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Speaker 9: less uncertainty in general. Or we just have to wait

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Speaker 9: to see, so.

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Speaker 4: I thinker group CEO Jessper Broden.

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Speaker 1: They're speaking to Bloomberg Jennifer Creary, who joins us now

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Speaker 1: for more.

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Speaker 4: Jennifer, good morning.

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Speaker 1: How worried then, is Jessper Broden about the impact of

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Speaker 1: tariffs on the Ikea business?

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Speaker 10: Yeah, So, as you heard, yesper was calling for stable

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Speaker 10: and predictable trade relations. So the implication being that it's

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Speaker 10: very difficult for Ikea and other companies to navigate Donald

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Speaker 10: Trump's volatile trade policies. Now, he's not saying much about

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Speaker 10: how much tariffs are actually going to impact IKEA's supply chain.

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Speaker 10: You know, he hasn't committed to any definitive measures yet.

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Speaker 10: But what's interesting about Aki is that it sources most

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Speaker 10: about seventy percent of its products from Europe, while the

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Speaker 10: rest of it is made in Asia. So of course

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Speaker 10: I'll be impacted by any levies on imports from China

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Speaker 10: to the US, US being its second largest market, so

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Speaker 10: some of those pressure points will be you know, they'll

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Speaker 10: have to these questions like a lot of companies are asking,

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Speaker 10: you know, can they make cost savings through negotiations with

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Speaker 10: suppliers or will they have to raise prices? And what's

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Speaker 10: interesting is, you know, Ikia, as a value reta, will

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Speaker 10: be in this tricky spot because they'll still need to

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Speaker 10: be affordable because you know, as we all know, buying

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Speaker 10: fellosure can get pretty expensive.

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Speaker 1: Is Yes, we're Brodens seeing any signs of the weaker

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Speaker 1: consumer confidence issues that we've seen highlighted in data both

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Speaker 1: in the US but also elsewhere.

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Speaker 10: Yeah, so I asked them this yesterday, and he said

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Speaker 10: consumer confidence has declined in the past few months. But

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Speaker 10: you caveat of that by saying, you know, this is

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Speaker 10: not something that is exclusive to IKE. It's affecting all companies.

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Speaker 10: But you know, if you look at it, it's last set

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Speaker 10: of results last year, so it's last year's full year results.

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Speaker 10: AKA already reported a decline of about almost thirty eight

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Speaker 10: percent in operating profit and that came after it announced

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Speaker 10: that it invested two point one billion euros in cutting

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Speaker 10: prices and that has come at the expense of some

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Speaker 10: of those financial guest and so it's already under pressure

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Speaker 10: starting the year on kind of a week of foot

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Speaker 10: and of course with tariff and other kind of you know,

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Speaker 10: inflation on the cost of war materials, that's just going

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Speaker 10: to pile additional challenges onto the retailer. But you know,

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Speaker 10: I asked him, are you going to hike prices? And

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Speaker 10: there's no indication yet. He was very tight lipped about that.

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Speaker 10: So let's wait in Zoon.

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