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Speaker 1: Good morning.

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Speaker 2: It's Frida, one of December here in London. This is

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Speaker 2: the Bloomberg Daybreak Hereate podcast. I'm Caroline Hepkea.

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Speaker 3: And I'm Stephen Carroll.

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Speaker 4: Coming up today. Israel says the temporary Gaza ceasefire with

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Speaker 4: Hamas is over ending a week long exchange of hostages

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Speaker 4: for prisoners.

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Speaker 2: Bloomberg Economics expects a weakening US economy to lead to

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Speaker 2: significant FED rate cuts next year.

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Speaker 4: Plus shock Therapy TESLA delivers its first cyber trucks, but

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Speaker 4: says the cheapest model will be delayed until twenty twenty five.

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

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Speaker 2: Israeli Army says that it took the decision after Hamas

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Speaker 2: violated the terms of the pause by firing towards its

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Speaker 2: territory speaking Intel Aviv. Ahead of that move, US Sectory

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Speaker 2: of State Anthony Blinken urged Israel's Prime Minister Benjamin Ett

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Speaker 2: Yahoo to avoid the scale of destruction inflicted on Gaza

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Speaker 2: before the truce.

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Speaker 5: I underscored the imperative of the United States massive loss

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Speaker 5: of civilian life and displacement of the scale that we

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Speaker 5: saw at Northern Gaza not be repeated in the South.

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Speaker 5: As I told the Prime Minister, intent matters, but so

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Speaker 5: does the result.

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Speaker 2: Anthony Blincoln also told reporters yesterday that he was working

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Speaker 2: to extend the temporary truce to get more hostages out

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Speaker 2: of Gaza and more humanitarian assistance in That objective now

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Speaker 2: looks to have failed. In the last hour, the British

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Speaker 2: Prime Minister Ishisunak renewed the UK's call for sustained humanitarian

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Speaker 2: pauses in Gaza. Benjamin Netanyahoo and other Israeli politicians have

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Speaker 2: consistently stressed that the war would resume at some point

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Speaker 2: and that the truce was not permanent.

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Speaker 4: Bloomberg Economics says next year will bring one hundred and

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Speaker 4: twenty five points of FED cuts beginning in March, as

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Speaker 4: signs of a US recession begin to appear. The team's

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Speaker 4: baseline forecast is for unemployment to increase through next year

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Speaker 4: and approach five percent by the end of twenty twenty four,

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Speaker 4: a mild recession by historical standards. Insignio Chief investment officer

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Speaker 4: Amedriasko said that markets are responding to the same concerns really.

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Speaker 3: Over the past several weeks.

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Speaker 6: The bomb market is clearly signaling that its attention has

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Speaker 6: shifted from inflation risks to growth and recessionary risks. And

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Speaker 6: you're seeing that with not only sort of the rapid

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Speaker 6: drop in longeration bonds in the United States, but also

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Speaker 6: with the market starting to price in Fed FED funds

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Speaker 6: cuts as early as March. In fact, at the end

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Speaker 6: of the day today, the market was roughly was pricing

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Speaker 6: in roughly fifty percent chance that the FED will cut

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Speaker 6: the rate by March of twenty twenty four, So this

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Speaker 6: is much earlier than what we had seen a couple

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Speaker 6: of weeks.

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Speaker 4: Ago, Amadriasko. There FED officials have shifted their tone in

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Speaker 4: recent days and closer to a conversation around cutting rates.

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Speaker 4: Markets in particular have launched onto comments by the hawkish

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Speaker 4: governor Christopher Waller, who this week opened the door to

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Speaker 4: trimming rates if inflation can us to fall.

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Speaker 2: The British Prime Minister will pledge to spend one point

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Speaker 2: six billion pounds on climate projects as he attends the

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Speaker 2: COP twenty eight summit in Dubai. Almost half of that

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Speaker 2: amount will be new funding, including half a billion to

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Speaker 2: tackle deforestation and three hundred million pounds for energy innovation.

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Speaker 2: The UK will also contribute forty million pounds to a

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Speaker 2: global fund to help vulnerable countries deal with more extreme weather,

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Speaker 2: and an initiative that's been unveiled at COP twenty eight.

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Speaker 2: Richie Sunak has defended his party's recent rolling back of

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Speaker 2: green policies.

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Speaker 7: I'm not in hoc to ideological zealots on this topic.

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Speaker 7: Of course, we're going to get to next zero. Of

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Speaker 7: course it's important. But we can do that in a

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Speaker 7: sensible way that saves people money. And I'm proud of

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Speaker 7: that approach. I think that's the right thing, and I

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Speaker 7: think that actually it's supported by the vast majority of

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Speaker 7: the British public.

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Speaker 2: Richie soon acts trip to COP twenty eight risks being

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Speaker 2: overshadowed by the opposition leader Kirs Starmer, who is also attending.

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Speaker 2: He's promising to make the UK the green finance capital

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Speaker 2: of the world.

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Speaker 4: The Institute of Directors says UK tax cuts won't help

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Speaker 4: to ease economic worries among British business leaders. The group's

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Speaker 4: economic Confidence index improved for a fifth month running after

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Speaker 4: plummeting in June when interest rates jump to five percent.

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Speaker 4: Finding show optimism among company bosses has returned to twenty

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Speaker 4: nineteen levels when leaving the European Union with a no

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Speaker 4: deal was on the cards. UK executives are still struggling

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Speaker 4: to muster enthusiasm for twenty twenty four, despite the Chancellor's

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Speaker 4: twenty billion pound tax cut package. Among their concerns are

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Speaker 4: geopolitical instability, skills shortages and climbing energy costs.

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Speaker 2: UK regulators will review a six hundred million pound UAE

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Speaker 2: linked bid for the Telegraph newspaper, but in bigsta Adebayo

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Speaker 2: has the details.

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Speaker 1: Culture Secretary Lucy Fraser has ordered a probe into the

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Speaker 1: proposed takeover of one of Britain's most famous newspapers due

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Speaker 1: to concerns about accurate reporting and free expression. Media regulator

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Speaker 1: Offcom and the Competition in Markets Authority will investigate a

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Speaker 1: deal involving the Telegraph and investment venture Redbird I am I,

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Speaker 1: which is backed by Abu Dhabi Sheik Mansur. Findings will

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Speaker 1: be published in January next year. The government can then

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Speaker 1: block the deal imposed conditions, or allow it to go through.

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Speaker 1: The Telegraph has close connections with the ruling Conservative Party.

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Speaker 1: Former Prime Ministers Boris Johnson and Winston Churchill have both

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Speaker 1: written for the paper in London, tiwa Adebayo Bloomberg Radio.

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Speaker 4: Tesla has finally rolled out its long awaited cyber truck

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Speaker 4: after two years of delays and production snags. Whoever, the

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Speaker 4: cheapest model is two years behind schedule, as the CEO

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Speaker 4: Elonmosk clemented how difficult the steel bodied vehicle is to produce.

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Speaker 4: Dan Ives, managing director at web Bush Securities, expects it'll

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Speaker 4: take time for Tesla's pickup truck to become profitable.

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Speaker 3: First twelve to eighteen months.

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Speaker 8: No, I mean they'll essentially loose money, would be cash

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Speaker 8: on negative, but as you get into two twenty five,

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Speaker 8: it actually could be pretty significant in terms of the

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Speaker 8: accretive level as it all plays out at scale.

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Speaker 4: The cyber truck marks Tesla's first entry into the highly

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Speaker 4: competitive pickup truck market in the US. The move has

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Speaker 4: been met with some excitement, but also heavy criticism and doubt.

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Speaker 4: Let's return for more details in our top story.

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Speaker 9: Now.

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Speaker 4: The Israeli Army saying it's resumed combat against Hamas in

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Speaker 4: the Gaza Strip after that week long truce. This is

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Speaker 4: the United States has said that Israel must not repeat

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Speaker 4: the scale of destruction and displacement inflicted on the northern

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Speaker 4: Gaza Strip in any further military push against Hamas. Joining

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Speaker 4: us now for more Paul Wallace, who leads our team

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Speaker 4: of economics and government reporters in the Middle East, Paul,

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Speaker 4: thank you for joining us. The fragile truce is over.

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Speaker 4: What has happened so far this morning exactly?

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Speaker 9: It ended at around seven am local time or am

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Speaker 9: UK time this morning. Almost immediately is El started bombing

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Speaker 9: Harmas targets in the Gaza Strip. It blamed Hermas for

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Speaker 9: this restart. It said that the group had violated the

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Speaker 9: truth that was in place for a week in total.

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Speaker 9: Hamas has subsequently blamed Israel and said that the US

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Speaker 9: also bears responsibility for giving Israel the green light for

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Speaker 9: hostilities to resume. It's not a total surprise that we're

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Speaker 9: now back in a phase of war. Israel and its

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Speaker 9: Prime Minister Benjamin Lettino, who have been very consistent that

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Speaker 9: the truce was temporary, it certainly wouldn't be permanent, and

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Speaker 9: that the country would not be stopped in its goal

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Speaker 9: of destroying Hamas and demilitarizing the Gaza Strip.

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Speaker 3: So it was pretty clear that fighting would begin.

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Speaker 9: It was just just a case of when, but clearly,

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Speaker 9: whatever happened last night and early this morning in negotiations

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Speaker 9: between Hamas and Israel of a hostage, they couldn't agree

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Speaker 9: to another extension in their truth.

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Speaker 2: It comes though, with a strong warning from the US

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Speaker 2: to do more to protect civilians. What does the plan

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Speaker 2: for that look like? How can Israel do both target

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Speaker 2: Hamas and also protect so many people in the Girlza strip.

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Speaker 9: This is a big question in US Secretary of State

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Speaker 9: Anthony Blinkin made pretty strong comments about Palestine civilians and

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Speaker 9: need to protect them when he spoke to Nettagno Whu

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Speaker 9: in Tel Aviv yesterday. He was in fact still in

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Speaker 9: the country when hostilities resumed. He left from Benga and

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Speaker 9: Airport shortly afterwards. On the face of it, the US

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Speaker 9: stance is the same that it backs Israel's goal of

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Speaker 9: destroying Hamas, but it is making a bigger and bigger noise.

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Speaker 3: About Palestine and civilians and the need to protect them.

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Speaker 9: Interestingly, blinking alluded to Israeli forces moving to the south

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Speaker 9: of the Gods of strips, so right now they're concentrated

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Speaker 9: in the north, which they say is Hamasa's center of gravity.

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Speaker 9: But Blinkln talked about them moving south, not in a

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Speaker 9: way that he was saying that should happen, simply he

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Speaker 9: was simply saying that if Israel does move forces into

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Speaker 9: the south, we cannot see the same number of casualties

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Speaker 9: there civilian casualties as we have in the north. So

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Speaker 9: it seems as if, at least in the background and

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Speaker 9: in private, the US is increasing pressure on Israel to

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Speaker 9: sort of restrain its operations, but in public, Israel is

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Speaker 9: very much maintaining its strong stance that this war will

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Speaker 9: continue until Hamasa is normal.

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Speaker 4: What about the diplomatic efforts that have been led by

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Speaker 4: Katar that led to this truth being established in the

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Speaker 4: first place and then extended. Do we know if those

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Speaker 4: efforts are continuing.

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Speaker 3: We think they are cut.

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Speaker 9: I had hoped As and some other our governments had

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Speaker 9: also hoped that this truth would turn into something more permanent,

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Speaker 9: and I think even though it's broken down, we'll still

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Speaker 9: see negotiations taking place between Hamas and Israel, mostly channeled

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Speaker 9: through KATA, which has been the main mediator so far.

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Speaker 3: Hata hasn't said.

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Speaker 9: Anything this morning about the breakdown in this truth, so

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Speaker 9: we wait to see if they've got any more comment.

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Speaker 9: But it is possible we could see more pauses, and

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Speaker 9: in the last few moments British Prime Minister Rishie Sumac,

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Speaker 9: who's who's in Dubai for.

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Speaker 3: The copp Climate Summit, he actually.

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Speaker 9: Calls for further humanitarian pauses as he worded them. So

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Speaker 9: I think we will still see more diplomacy. And it

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Speaker 9: doesn't mean that this is even now that we had

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Speaker 9: one week of truth.

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Speaker 3: So that's it. There'll be no more stoppages and fighting.

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Speaker 3: It's quite possible that we will get some further down

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Speaker 3: the line.

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Speaker 9: They will be dependent on Hamas leasing more hostages from Gaza,

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Speaker 9: and it's thought to still hold about one hundred and

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Speaker 9: forty people.

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Speaker 2: Just lastly, on the tensions in the West Bank, how

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Speaker 2: severe are those currently?

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Speaker 9: They're rising and the territory has got more and more

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Speaker 9: rest of Since this war in Gaza started on October

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Speaker 9: the seventh, we've seen a number of Palestinians killed by

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Speaker 9: Jurish settlers and also by Israeli security forces. It's something

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Speaker 9: that Israel is worried about. It's watching. Although people talk

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Speaker 9: about a second front opening up on the West Bank,

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Speaker 9: it is important to note that there's no military force

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Speaker 9: in the West Bank. Quite like Hamas in Gaza. Yes,

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Speaker 9: Hamas does have a presence in the West Bank, and

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Speaker 9: there are a lot of arms among Palestinian various Palestine

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Speaker 9: groups in the West Bank, but it's not there's nothing

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Speaker 9: quite as strong as what you have with ha Mus

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Speaker 9: and Garza.

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Speaker 3: So if there was, if this did turn into.

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Speaker 9: Something more serious, it would probably be another in fight

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Speaker 9: there where you have an uprising of Palestinians against Israelis,

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Speaker 9: but probably not something like a mass sort of missiles

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Speaker 9: being fired toward Israeli.

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Speaker 3: Er try like you got in Gaza and at the October.

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Speaker 4: Okay, Paul Wallace, who runs our economics and government coverage

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Speaker 4: in the Middle East, thank you very much for joining

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Speaker 4: us this morning.

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Speaker 2: Now let's talk about the economics situation in the US.

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Speaker 2: Bloomberg Economics Now believes that they see signs of a

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Speaker 2: typical recession having begun in October twenty twenty three, and

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Speaker 2: therefore they expect that the Fed will have enough clarity

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Speaker 2: about the downturn to then cut interest rates for the

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Speaker 2: first time in March next year. Joining us now is

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Speaker 2: Bloomberg Opinion columist Daniel Moss. Good to have you with us. Daniel.

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Speaker 2: Earlier this week, Bill Ackman said that the Fed may

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Speaker 2: cut rates in the first quarter. Bloomberg Economics now seems

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Speaker 2: to agree and to that call. And obviously it's been

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Speaker 2: the main question for markets for the last few weeks.

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Speaker 10: It's been the main question for markets for about a

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Speaker 10: year now, since the Fed began scaling down from half

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Speaker 10: percentage point increases to twenty five basis point increases to

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Speaker 10: taking a little bit of a pause and now what

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Speaker 10: looks like a prolonged, possibly permanent pause to hikes. So

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Speaker 10: a year ago when people started chattering about rate cuts

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Speaker 10: for this year, that was off the mark. The chatter

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Speaker 10: is now back. It's back with a force. But what

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Speaker 10: gives it more credibility is that inflation is coming down

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Speaker 10: at a pretty significant clip. Look at PCEE, the Fed's

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Speaker 10: third preferred inflation measures down to three percent according to

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Speaker 10: the data we got overnight. You know, you're within coui

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Speaker 10: of an average of two percent over time. There, you're

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Speaker 10: not quite there, But the trend is really starting to

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Speaker 10: look unambiguous.

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Speaker 4: When we look at the rally that we've seen on

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Speaker 4: barn markets as well. Markets seem to have decided this already.

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Speaker 4: How much more difficult does that make the job for

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Speaker 4: central bancos.

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Speaker 10: It means they are unlikely to talk in ways that

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Speaker 10: are overtly sympathetic to that. So what you'll probably see

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Speaker 10: is really critical FED speakers perhaps coming away from remarks

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Speaker 10: and commentators saying, well, a little bit on the hawkish side,

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Speaker 10: a little bit, but that's because they don't want the

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Speaker 10: market to get carried away with pricing in too many

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Speaker 10: cuts too soon. I think it's also important to establish

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Speaker 10: what we're talking about when we talk about the FED.

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Speaker 10: What I'm talking about are the voices that matter, and

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Speaker 10: at the hinge points in policy, it's really critical to

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Speaker 10: understand not all FEDS beakers are equal. Keep your eye

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Speaker 10: primarily on the triumphant, the chair, the vice chair, and

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Speaker 10: the head of the New York Fed. Other people in

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Speaker 10: the FOMC sort of matter occasionally or situationally, but you know,

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Speaker 10: it's important not to get too upset or enthused by

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Speaker 10: what some of the backbenches say.

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Speaker 4: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 4: stories making news from London to Wall Streets and beyond.

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Speaker 4: You can also listen live each morning on London DAB Radio,

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Speaker 4: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

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Speaker 2: I'm Caroline Hepka and.

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Speaker 4: I'm Stephen Carroll. Join us again tomorrow morning for all

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Speaker 4: on Bloomberg Daybreak Europe