Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is the Bloomberg Day Baker podcast. Good morning, It's Tuesday,
Speaker 2: the twelfth of May. I'm Caroline Hebkeit in London and.
Speaker 3: I'm Stephen Carolin Brussels. Coming up today over seventy of
Speaker 3: Kier Starmer's own MP's call for him to go as
Speaker 3: British Prime Minister, as worries in the bond market grow.
Speaker 2: President Trump slams Iran's latest peace offer as he warns
Speaker 2: the sea spot is on massive life support.
Speaker 3: Plus why the EU Commissioned Chief Ursula Vonderlon is facing
Speaker 3: mounting scrutiny.
Speaker 4: Over her use of power. Let's start with a roundup
Speaker 4: of our top stories.
Speaker 3: A growing number of junior government ministers and backbench MPs
Speaker 3: are calling on Kir Starmer to quit as momentum builds
Speaker 3: against the British Prime Minister. Bloomberg understands Cabinet ministers, including
Speaker 3: Home Secretary Shabana Mattmood, have privately told Starmer to set
Speaker 3: out a timetable to step down own. The meeting came
Speaker 3: after the Prime Minister defended his party's poor local election results.
Speaker 5: Yes, I acknowledge the results are tough. Yes, I acknowledge
Speaker 5: that we've lost brilliant representatives across the United Kingdom.
Speaker 4: I have a responsibility for that.
Speaker 5: But I also have a responsibility to deliver the change
Speaker 5: that we were elected and that we promised this country,
Speaker 5: and I'll deliver on that.
Speaker 3: Starmer's speech was billed as a change of direction, but
Speaker 3: instead prompted waves of lawmakers to publicly urge him to go.
Speaker 3: More than seventy of Labour's four hundred and three MPs
Speaker 3: have now publicly called Anstarmer to step aside. Chris Curtis
Speaker 3: is one of them.
Speaker 6: I don't think we saw a plan from the Prime
Speaker 6: Minister in order to implement the kind of change that
Speaker 6: this country needs, and I therefore think it's time for
Speaker 6: us to look for new leadership. And I think what
Speaker 6: that means is the Prime Minister rightly now setting out
Speaker 6: a timetable and an orderly process for leadership election and
Speaker 6: one in which Labor has a discussion about the vision
Speaker 6: for the country and what changes we think are needed
Speaker 6: in order to face the very real challenges that Britain
Speaker 6: currently faces.
Speaker 3: Labor MP and head of the Labor Growth Group in Parliament,
Speaker 3: Chris Curtis there. The Prime Minister is showing a cabinet
Speaker 3: meeting this morning where he will have to confront some
Speaker 3: senior ministers who privately think his time is up well.
Speaker 2: Fears over the future of the UK's Prime minister are
Speaker 2: already feeding through into Britain's bond market. UK Gilts was
Speaker 2: swept up in another sell off yesterday as investors grew
Speaker 2: increasingly anxious about the country's finances. Investors appear concerned that
Speaker 2: a change of prime minister could bring in a left
Speaker 2: leaning candidate whose spending plans would require increased bondish ones.
Speaker 2: Despite yields being close to their highest level since two
Speaker 2: thousand and eight, James Stringer of Schroeders is advising investors
Speaker 2: to steer clear of UK debt. The bonfund manager says
Speaker 2: that even ten year yields around five percent are not
Speaker 2: enough compensation to justify resuming the firm's previously bullish stance
Speaker 2: on guilts.
Speaker 3: Oil prices are climbing after President Trump cast doubt on
Speaker 3: the fragile US around ceasefire. Brent crud rose above one
Speaker 3: hundred and five dollars a barrel as fears grow that
Speaker 3: the strait of hor moves could remain closed for longer
Speaker 3: than markets had hoped. Speaking in the Oval Office, Trump
Speaker 3: dismissed Tehran's latest proposal.
Speaker 1: It's unbelievably wik We say, I would go with the
Speaker 1: weakest right now, after reading a piece of garbage. They said,
Speaker 1: I didn't even finish reading it. They said, I'm going
Speaker 1: to waste my time reading it. I would say it's
Speaker 1: one of the weakest right now. It's on life support.
Speaker 1: They understood, these are all medical people. Doctor US life
Speaker 1: support is not a good thing, you dreck bag prognostic.
Speaker 1: I would say the seasfire is on massive life support.
Speaker 3: Trump's comments came after sources told Bloomberg that Irans offered
Speaker 3: demanded the US lift its naval blockade and provide sanctions
Speaker 3: relief while allowing Tehran to retain a degree of control
Speaker 3: over traffic through the Strait. According to Axios, citing multiple
Speaker 3: US officials, Trump met his national security team yesterday to
Speaker 3: discuss the war and possible resumption.
Speaker 4: Of military action.
Speaker 3: In a further sign of escalation, arounds, semi official Tasmum
Speaker 3: News agency now says the country has deployed armed mini
Speaker 3: submarines in the Persian Gulf.
Speaker 2: The US has ramped up sanctions on the sale of
Speaker 2: Iranian oil to China, just days ahead of President Trump's
Speaker 2: visit to the country. The US Treasury has blacklisted twelve
Speaker 2: firms and individuals, including some base in Hong Kong, the UAE,
Speaker 2: and Oman. In a statement, the Treasury said that Iran
Speaker 2: is relying on front companies in permissive jurisdictions to funnel
Speaker 2: it oil revenue. The Treasury also repeated it threat to
Speaker 2: impose secondary sanctions on firms linked to China's private oil refineries.
Speaker 2: President Trump and China's Xijingping will meet in Beijing on Thursday,
Speaker 2: where they'll discuss trade and the war in Iran.
Speaker 3: Michael Berry says he believes the Nasdaq one hundred index
Speaker 3: has headed for a dramatic reversal after what he has
Speaker 3: dubbed a parabolic surge. With more Here's Bloomberg's crispet.
Speaker 7: The investor made famous by the Big Short, is now
Speaker 7: sounding the alarm on US tech stocks. Writing in a
Speaker 7: post on Substack, Burry said we are witnessing history in
Speaker 7: the stock market that is not a good thing. He
Speaker 7: argues that the market resembles the peak of the dot
Speaker 7: com bubble, pointing to the Nasdaq one hundred, now trading
Speaker 7: US around forty three times earnings. Burry is among a
Speaker 7: number of market observers who raised concerns about the rally
Speaker 7: driven by artificial intelligence spending boom that for now at
Speaker 7: lease shows no signs of calling. In London, Chris Pitt, Bloomberg.
Speaker 2: Radio, South Korea's Cosby Index shed more than three hundred
Speaker 2: billion dollars in value in just ninety seven minutes today.
Speaker 2: The sharp seller followed a proposal from the President's policy
Speaker 2: chief to its use a so called citizen dividend funded
Speaker 2: by excess profits from the AI industry. Christy Tan, senior
Speaker 2: Investment straatches at Franklin Templeton Institute, says there may be
Speaker 2: more volatility ahead for the index.
Speaker 8: What we saw this morning that Marcus still very sensitive.
Speaker 8: I would be enthusiastic and careful at the same time.
Speaker 8: The markets are wieners from a capex, but they are
Speaker 8: also concentrated, especially in Taiwan. For Korea, the structural discount
Speaker 8: has narrowed, but that's not close totally.
Speaker 2: Christy Tan of the Franklin Templeton Institute, speaking there, the
Speaker 2: cell of equates to more than three billion dollars a
Speaker 2: minute in losses for the Benchmark index, weighing on sentiment
Speaker 2: across Asia, although the costby is still up seventy eight
Speaker 2: percent this year.
Speaker 3: Germany's fiscal watchdog is warned that the government risks breaching
Speaker 3: EU fiscal rules of current spending continues. The Stability Council
Speaker 3: expects the country's budget deficit to reach four point two
Speaker 3: five percent of GDP this year, with spending growth of
Speaker 3: six percent. Both figures exceed EU limits. Today, the Chancellor,
Speaker 3: Frederick Martz will hold a key meeting with his coalition
Speaker 3: partners to discuss plans to overhaul Germany's tax and pension system.
Speaker 2: And those are our top stories. Looking at the markets
Speaker 2: this morning, bank read futures training up six tens of
Speaker 2: one percent at one hundred and four dollars eighty six,
Speaker 2: with WCI crewed at ninety eight dollars ninety three. The
Speaker 2: Cosby has seen wild swings today at the moment is
Speaker 2: down by three percent. The AI boom enriching the chip
Speaker 2: makers like Samsung Electronics and s k Heinex book calls
Speaker 2: for taxes on profits treasuries. This morning, US yields up
Speaker 2: by about a basis point at four forty two for
Speaker 2: ten year yields, stop futures for the US in the
Speaker 2: red USOX swifty futures slumping seven tenths of one percent,
Speaker 2: and we keep an eye on the PAD which is
Speaker 2: weakening two tens of one percent this morning. Remember thirty
Speaker 2: year guilt yields yesterday rose almost eleven basis points of
Speaker 2: five point six y nine because of the political pressures
Speaker 2: on the Prime minister of those the market.
Speaker 3: Well, in a moment, we'll have more on those political
Speaker 3: pressures on Caer Starmer and why finding compromise over Iran's
Speaker 3: nuclear program will be difficult, plus why a concentration of
Speaker 3: power at the top of the European Commission is being
Speaker 3: blamed for slow progress on tackling the EU's key challenges.
Speaker 3: Before all that, I wanted to mention the story that
Speaker 3: we've been reading this morning about parenting in the age
Speaker 3: of AI Bloomberg Opinions. Lisa Jarvis has been writing about
Speaker 3: this the newest challenge facing parents. How do you place
Speaker 3: guardrails on yet another piece of rapidly evolving technology. Now
Speaker 3: I am woefully underqualified, Caroline to talk about this, but
Speaker 3: I find it quite jarring, not being a parent that
Speaker 3: Lisa Jarvis is talking about running a full scale experiment
Speaker 3: on teams social emotional, and cognitive development, and parents are
Speaker 3: the main backstop for their safety. Doesn't that give you Comforst.
Speaker 3: Caroline at this hour.
Speaker 4: Of the morning. Absolutely?
Speaker 2: Wooh, it's all down to the parents in densely difficult Look,
Speaker 2: I'm afraid I am a parent, and this absolutely is
Speaker 2: a daily issue.
Speaker 4: You know, the concerns.
Speaker 2: About what teens are doing, how they're using technology online,
Speaker 2: and what it means, you know, for their life. I
Speaker 2: think it's a balancing act between living in the digital
Speaker 2: age and needing those skills maybe for your life future,
Speaker 2: but then also being worried about whether it's going to
Speaker 2: have unintended consequences or Yeah, it's a very difficult balancing act.
Speaker 3: But she raises a point that's relevant to teenagers, but
Speaker 3: I think relevant to all of us as well, about
Speaker 3: what AI makes easy and whether it's skipping over the
Speaker 3: parts that feel hard, which are the parts that you
Speaker 3: actually learn things from.
Speaker 4: Yes, and this is part of my kind of broader.
Speaker 3: Existential fear about AI, is that maybe actually it's taking
Speaker 3: away the things that's going to you know, keep our
Speaker 3: cognitive functions working and keep us thinking and learning throughout
Speaker 3: our lives. Anyway, it's a great read. We'll put a
Speaker 3: link to on our podcast show notes.
Speaker 2: Well, let's go to the big story in the UK now,
Speaker 2: kist Arma is facing renewed pressure on his position. Has
Speaker 2: dozens of MPs and at least one senior cabinet member
Speaker 2: are urging him to reconsider his position. Our UK Politics
Speaker 2: who reported James Walcock joins us for more. Now, how
Speaker 2: much pressure is the prime minister under? This morning you
Speaker 2: and I were listening and we broadcast it on London
Speaker 2: dab the speech that Starma made after the local election results.
Speaker 9: In the twelve or so hours since he gave that speech,
Speaker 9: nearly twenty percent of his MPs have called on in
Speaker 9: publicly to go. It doesn't get more stark than that.
Speaker 9: Frankly and then Bloomberg are reporting, as our other outlets
Speaker 9: overnight that cabinet ministers, including Home Secretary Shabonahma Mood and
Speaker 9: we suspect there are others. And this comes after two
Speaker 9: weeks ago Edmund banded the same thing. Are privately telling
Speaker 9: Prime Minister Kirs Starmer that he has to set out
Speaker 9: a timetable for this cabinet meet this morning. Those cabinet ministers,
Speaker 9: one would suspect, are not going to keep their feelings
Speaker 9: to themselves. Although we know the Prime Minister still has
Speaker 9: his backers. This is a deeply perilous position and I
Speaker 9: have to say, Caroline, as we've covered quite a few
Speaker 9: prime ministers going in our time, this has all the
Speaker 9: hallmarks of being quite dangerous, potentially terminal.
Speaker 4: So is there a path then that Kirstarmer can survive this?
Speaker 9: James Stephen, like I said, he has his backers. You
Speaker 9: look to of Luke Akhurst, you look to Steve Reid,
Speaker 9: to the House.
Speaker 4: And Community Secretary.
Speaker 9: There are people who still wants darm to be in
Speaker 9: charge and fear deeply the impression of being seen as
Speaker 9: similar to the Conservatives. The difficulty is once, by my
Speaker 9: count it's seventy two. Once seventy two of your own
Speaker 9: MPs have publicly said they would.
Speaker 4: Rather you gone.
Speaker 9: And I mean looking at the quotes, these are not
Speaker 9: the usual suspects, Steve when These are MPs of Scotland,
Speaker 9: in London, in Manchester, in Birmingham in the left, the
Speaker 9: head of the Tribune Group on the right, the Blue
Speaker 9: Labor Group plus six ministerial aids and they're saying things
Speaker 9: publicly like the speech failed to show he can regain trust.
Speaker 9: The Prime Minister has lost the confidence of the public
Speaker 9: poor decisions and enforced errors. The animosity towards the Prime
Speaker 9: Minister was clear from every voter who was choosing to
Speaker 9: vote for another party. The content of the speech did
Speaker 9: not suist anything close to the scale of the change
Speaker 9: need to rebuild communities like mine.
Speaker 4: Those are all different MPs.
Speaker 9: Once you've said things like that publicly about your leader,
Speaker 9: you will never be able to wind that back as
Speaker 9: an MP. So those seventy two MPs are effectively committed
Speaker 9: to getting starmar out come what may and even if
Speaker 9: he continues, he'll have to go on without them, So
Speaker 9: it's not impossible.
Speaker 4: What he might have to do is play for time.
Speaker 9: He may be able to sort of be in plower
Speaker 9: for months and things may change as time goes on.
Speaker 2: Yeah, look, we know from the local election results. There'll
Speaker 2: be more analysis done, but we know from polling before
Speaker 2: the local election results that voters are deeply pessimistic about
Speaker 2: the economy, deeply worried about things like the cost of living,
Speaker 2: and about the NHS, the health system. How could Labour's
Speaker 2: political direction change to answer that because markets are already moving,
Speaker 2: investors are already concerned.
Speaker 9: It all depends what conversation the party wants to have
Speaker 9: about what direction it goes in here, so kind of
Speaker 9: the people to watch this cabinet meeting if it's almost
Speaker 9: certain to leak in some fashion, Caroline but Lo, Look,
Speaker 9: let's say Starma comes out to give a statement after,
Speaker 9: we might get a sense of what that contest.
Speaker 4: If there were to be a leadership contest, would look like.
Speaker 9: How these sort of potential future leaders likes and Andy
Speaker 9: burn in West Street Andreina might put their ideas forward,
Speaker 9: what those ideas might look like. That's where you'll get
Speaker 9: some of the policy you're sort of deeply looking for.
Speaker 9: If Starma doesn't want to do that, do cabinet ministers
Speaker 9: take to the media, and we end up with kind
Speaker 9: of more of a scramble. If we then look to
Speaker 9: the NEC Labour's rule making body, how are they due
Speaker 9: to get a leadship contest? And then finally, if Starmer's
Speaker 9: determined to stick in, if it's becomes a sort of
Speaker 9: drawn out contest, do those rivals themselves with Andy Burnham
Speaker 9: Airgrad Manchester Rayner Street that I've just mentioned, do they
Speaker 9: take to the airways sort of last resort and themselves
Speaker 9: call for a change direction. If they set out their
Speaker 9: stall again, that will give you the kind of idea
Speaker 9: in terms of policies, change strategy that.
Speaker 4: You're looking for. Okay, James r ukpartic supporter, Thank you. Now.
Speaker 2: The US President says that the cease far with Iran
Speaker 2: is on massive life support after he rejected Tehran's latest
Speaker 2: peace offer. Failed attempts to reach a basic framework for
Speaker 2: further discussions jeopardize the prospects for successful negotiations over future
Speaker 2: curves on Iran's nuclear program. Our nuclear diplomacy reporter Jonathan
Speaker 2: Tyrone joins US Now for more. Good morning, Jonathan. How
Speaker 2: much has been discussed about Iran's nuclear program then during
Speaker 2: these attempts at diplomacy, The short.
Speaker 4: Answer is not much all.
Speaker 10: In fact, the strength that began on February twenty have
Speaker 10: created a whole new series of problems, primarily focused around
Speaker 10: the closure of the strati form MOOS and the consequent
Speaker 10: economic and energy.
Speaker 4: Crisis that's caused.
Speaker 10: And so the talks to this point of focused mainly
Speaker 10: on regional security, regional state, ceasefires and opening the straight
Speaker 10: back up. The nuclear istion has very much become a
Speaker 10: subsidiary issue. The Iranians are proposing phased approach, basically saying
Speaker 10: they want to have a regional ceasefire that includes Lebanon
Speaker 10: UH and UH followed by some sort of men management
Speaker 10: planner of the stratior for moves, then followed by nuclear talks.
Speaker 10: I mean, this comes down to, you know, the big
Speaker 10: issue is that the Trimp administration is basically entering UH
Speaker 10: talks expecting some sort of conpitulation to US demands, and
Speaker 10: the Iranians don't see themselves as a defeated power and
Speaker 10: expect a lengthy negotiation between equals.
Speaker 3: Do we have an idea of what Iran might agree
Speaker 3: to when it comes to its uranium and its nuclear program.
Speaker 10: Yeah, we do have an idea about that. The Foreign
Speaker 10: Minister Abasar Rachi visited Moscow last week, Resident Putin during
Speaker 10: his readout of that meeting, you know, suggested a couple
Speaker 10: of things that had been in public discussions in recent times.
Speaker 10: I mean, obviously, in twenty fifteen, under the nuclear agreement
Speaker 10: that Trump abrogated in his first administration, Russia had actually
Speaker 10: assumed control of a large stockpile of Iranian in riched uranium.
Speaker 10: That is one possibility that's been discussed. Another possibility is
Speaker 10: that the Iranians blend the enriched uranium stockpile down to
Speaker 10: a level within Iran so that it cannot be turned
Speaker 10: into a weapon. But at the moment, Iran insisted isn't
Speaker 10: willing to give up anything. It's not even really willing
Speaker 10: to talk about those options until the other issues are addressed.
Speaker 2: Indeed, so we'll see whether any further progress is made. Jonathan,
Speaker 2: thank you so much for that explanation and update on
Speaker 2: nuclear diplomacy. Reporter Jonathan Tyrone. Stay with us. More from
Speaker 2: Bloomberg Daybakeupe coming up after this Now.
Speaker 3: As head of the European commission Erslavanderline has built a
Speaker 3: presidential operation that exerts control over every aspect of what
Speaker 3: goes on inside the EASE executive the sources of told
Speaker 3: Bloomberg the concentration of power has spread her off as
Speaker 3: thinly and as a result of Vonderline's broader campaign to
Speaker 3: revive the EU project is faltering. Our EU Economy reporter
Speaker 3: Jorge Valero joins us now for more. Orge, Good Morning.
Speaker 3: This reporting is based on conversations with multiple officials and
Speaker 3: diplomats who've worked with arslavanderline, what issues have they raised
Speaker 3: about the way that she's running the European Commission.
Speaker 4: Good morning, Stephen.
Speaker 11: Well, basically, one of the main points they rate the
Speaker 11: races that she is overreaching and trying to grab too
Speaker 11: much power, and she's trying to extend her competencies to
Speaker 11: issues like foreign ef FIRS and defense that are traditionally
Speaker 11: in the hands of member states. And on the other hand,
Speaker 11: she is lacking focus and is not progressing and achieving
Speaker 11: results on internal market, which is which is her core competence,
Speaker 11: and also in other issues. That the dimension is that
Speaker 11: because of this overreaching, of course commissioners internally commissioners are sidelined,
Speaker 11: and we have to remember that these commissioners are powerful
Speaker 11: politicians sent by the capitals, and that she is trying
Speaker 11: to macro manage every aspect of the Commission, which of
Speaker 11: course is provoking bottelnets. And therefore this lack of achieve
Speaker 11: lack of results that we mentioned for example on internal market.
Speaker 2: Okay, well, what then does it mean the internal market
Speaker 2: is one one issue where there isn't enough progress or
Speaker 2: their key policies in the EU that are not seeing
Speaker 2: enough progress.
Speaker 4: What are they?
Speaker 11: Yeah, I mean, well, to put things in context, I
Speaker 11: mean we have to remember that, I mean the EU
Speaker 11: is kind of the underdog right now in this big
Speaker 11: squeeze between the US and China.
Speaker 4: US b like the I mean having the old.
Speaker 11: The military might and defense capacities, and China controlling for example,
Speaker 11: minelas in green tech et cetera, et cetera, And the
Speaker 11: EU is trying to survive this big squeeze. And our
Speaker 11: big muscle is the internal market. And the EU has
Speaker 11: been trying to lower the national warriers to create a
Speaker 11: true single market for for years and there's been increasing
Speaker 11: calls from from the leaders to progress on this, on
Speaker 11: this regard, but we have the remember so the Dragon
Speaker 11: Report and the Letter Report, but so far the results
Speaker 11: have been very, very minimal. And therefore, I mean member
Speaker 11: stage capitals are pointing to funder Lion to I mean
Speaker 11: to tell her, I mean, let's focus on this, lets
Speaker 11: progress on this. But it's also true and this is
Speaker 11: something that I mean commissioned officials said and on some
Speaker 11: capitals admit that the lack of progress is not only
Speaker 11: because they could wonder Lion has not been focusing enough
Speaker 11: on this, but also because the member states, especially the
Speaker 11: big ones, have been reluctant to lower those barriers of
Speaker 11: the internal market because they want to protect the companies.
Speaker 3: Indeed, and I spend some of also what Slvangelian and
Speaker 3: supporters set in her defense on that front, what has
Speaker 3: our slave agel lions off a certain response to this report.
Speaker 11: Well, what her office said is that, I mean, the
Speaker 11: decisions in the Commission have are taken collectively by all
Speaker 11: the commissioners what is called the College of Commissioners, and
Speaker 11: that there are many many hours that are invested in
Speaker 11: every proposal, in every piece of legislation before it's put forward.
Speaker 4: And also what the.
Speaker 11: Supporter says is that this concentration of power that she
Speaker 11: that she has accumulated over the past seven years, I
Speaker 11: mean since the master people said that is the most
Speaker 11: powerful commission president or even more than the Lord who
Speaker 11: is the Commission President who set up created the single market.
Speaker 11: What they say is that this power is needed to
Speaker 11: for these new times because if you need to compete
Speaker 11: with China, you need to compete with the Trump you
Speaker 11: need agility. You cannot spend a lot of time internally
Speaker 11: back and forth.
Speaker 4: To come up.
Speaker 11: With proposals, for example on defense where I mean or
Speaker 11: for example survive on cop with the coby with the vaccine.
Speaker 11: So also, for example, another achievement that she had was
Speaker 11: in putting together the different rounds of sanctions packages against
Speaker 11: the Russia, where her cabinet closely coordinated with the Biding
Speaker 11: administration at the start of the war.
Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 3: stories making news from London to Wall Street and beyond.
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Speaker 3: on Bloomberg day Break Europe.