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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak Europe podcast. Good morning, It's Tuesday,

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Speaker 2: the fourteenth of October. I'm Stephen Cowell and Brussels coming

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Speaker 2: up today. Donald Trump signs his Gaza truce deal to

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Speaker 2: international acclaim, but establishing a lasting piece in the Middle

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Speaker 2: East still looks difficult. The US and China ratchet up

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Speaker 2: trade tensions with tit for tap measures targeting the shipping industry,

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Speaker 2: plus playing catch up on AI. Europe striving to claim

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Speaker 2: a piece of the global tech boom, but remains dependent

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Speaker 2: on American firms like Nvidia and open Ai. Let's start

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Speaker 2: with a roundup of our top stories. World leaders signed

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Speaker 2: a Gaza ceasefire agreement, brokers by US President Donald Trump,

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Speaker 2: who hailed it as the historic dawn of a new

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Speaker 2: Middle East. There were emotional scenes in Israel where families

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Speaker 2: were reunited with hostages who were taken by Hamas during

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Speaker 2: its October seventh time two years ago. Their release, along

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Speaker 2: with the frying of Palestinian prisoners, marks the successful first

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Speaker 2: phase of the US plan to end the war. President

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Speaker 2: Trump described it as an achievement three thousand years in

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Speaker 2: the making.

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Speaker 3: For so many families across this land. It has been

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Speaker 3: years since you've known a single day.

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Speaker 4: Of true peace.

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Speaker 3: But now, at last israel Is, but also for Palestinians

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Speaker 3: and for many others, the long and painful nightmare is

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Speaker 3: finally over.

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Speaker 2: Even Trump's critics and political opponents agreed he had succeeded

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Speaker 2: where others had failed, although some questioned his rhetoric. Many

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Speaker 2: others still have concerns about how the plan will work

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Speaker 2: out in the long term. Officials have yet to lay

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Speaker 2: out a clear plan for disarming Hamas or how to

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Speaker 2: fund the colossal task of rebuilding Gaza. There are also

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Speaker 2: questions over who will run the territory, which is home

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Speaker 2: to two point two million people, almost all of whom

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Speaker 2: have been displaced by the war. China has thosed curbs

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Speaker 2: on five units of Hanhwa Ocean in response to US

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Speaker 2: probes against Chinese maritime logistics and shipbuilding. That's according to

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Speaker 2: a statement from the Chinese Ministry of Commerce. It's the

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Speaker 2: latest escalation between the two countries are trying to claim

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Speaker 2: they're winning their trade war. Both countries now say the

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Speaker 2: ball is in the other's course to compromise. Speaking yesterday,

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Speaker 2: US Treasury Secretary Scott Besson says his administration won't back down.

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Speaker 4: This is China versus the world. They have pointed in

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Speaker 4: Bazooka at the supply chains and the industrial base of

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Speaker 4: the entire free world, and you know we're.

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Speaker 5: Not going to have it.

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Speaker 2: Scott Bessont speaking there. Despite his stance, he also said

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Speaker 2: he believes a planned Trump g meeting will still be on,

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Speaker 2: noting substantial communication over the weekend. Elsewhere, smaller economies are

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Speaker 2: adapting to a world where US consumers and companies are

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Speaker 2: costlier to reach by seeking buyers. In Asia, Europe and Africa.

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Speaker 2: The World Trade Organization has revised its four cast for

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Speaker 2: merchandise trade growth in twenty twenty five from zero point

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Speaker 2: nine percent to two point four percent as governments redraw alliances.

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Speaker 2: The Philadelphia Fed President Anna Paulsen has signaled she's in

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Speaker 2: favor of two more quarter point interest rate cuts this year.

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Speaker 2: Speaking at the National Association for Business Economics annual conference,

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Speaker 2: the policymaker said she doesn't see conditions that would turn

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Speaker 2: tariff induced price increases into sustained inflation.

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Speaker 6: My base case is that tariffs will increase the price level,

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Speaker 6: but they won't leave a lasting imprint on inflation, and

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Speaker 6: given this base case, monetary policy should look through tariff

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Speaker 6: effects on prices. Why let me start with the economics here.

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Speaker 6: The lessons from economic theory are clear. So long as

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Speaker 6: expectations are anchored, increases in prices due to supply effects

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Speaker 6: do not turn into an inflation problem.

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Speaker 2: The Fed's Anna Poulsen speaking there, She went on to

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Speaker 2: say that policymaker's decision to cut interest rates a quarter

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Speaker 2: percentage point last month made sense, though a narrow majority

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Speaker 2: of FMC members favor at least two more cuts this year.

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Speaker 2: Others have argued for a cautious approach as inflation remains

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Speaker 2: above their two percent goal. Bank of England cut policymaker

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Speaker 2: Catherine Mann says Brexit and Liz Truss have made the

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Speaker 2: UK a less competitive and slower growing economy. Speaking at

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Speaker 2: a conference in Philadelphia, the Center banker said the UK's

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Speaker 2: vote to leave the European Union was one step in

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Speaker 2: a long erosion of sterling as a global currency. She

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Speaker 2: added that the implications of Brexit meant the quote supply

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Speaker 2: side of the economy for the UK is a real challenge.

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Speaker 2: Man had voted to hold interest rates as the last

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Speaker 2: two BOE meetings in an effort to shrink inflation, which

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Speaker 2: at three point eight percent, is almost double the bank's

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Speaker 2: two percent target. Silver prices have reached an all time

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Speaker 2: high as traders drive a supply shortage. Spot prices for

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Speaker 2: the precious man traded near fifty three dollars an ounce,

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Speaker 2: beating a record set in the nineteen eighties. Concerns about

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Speaker 2: a lack of liquidity in London have led some traders

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Speaker 2: to fly bars across the Atlantic to profit from higher prices.

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Speaker 2: The squeeze comes as investors globally look for safe havens,

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Speaker 2: with gold also climbing to another record high, building on

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Speaker 2: eight straight weeks of gains, and SpaceX's Starship successfully lifted

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Speaker 2: off for space on Monday in a closely watched test

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Speaker 2: of its ability to deploy satellites and return to Earth intact.

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Speaker 2: The rocket, built as the largest and most powerful ever built,

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Speaker 2: completed earlier milestones critical to CEO Elon Musk's aim of

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Speaker 2: preparing it for regular missions into orbit and beyond. As

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Speaker 2: so to listen to the moment it launched from the

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Speaker 2: starbas facility in South Texas.

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Speaker 5: Three two one, we have lift off, Go Go Starship

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Speaker 5: thanks for all the historic flights bad.

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Speaker 2: One minutes later, the starships Super Heavy Booster is split

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Speaker 2: from the spacecraft as planned, before splashing down the Gulf

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Speaker 2: of Mexico. The success marks a step forward and Musk's

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Speaker 2: ambitions to carry NASA astronauts to the Moon in under

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Speaker 2: two years and eventually established civilization on Mars. With those

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Speaker 2: of your top stories. On the markets, we're looking at

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Speaker 2: European stock futures lower two tents and eurostocks fifty this morning.

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Speaker 2: In the Nicky and Tokyo down by two point six percent,

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Speaker 2: the topics down by two point two percent. Those markets

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Speaker 2: catching up after being closed yesterday. The Hang Sting though

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Speaker 2: in Hong Kong is down by one percent as well,

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Speaker 2: so trades movements there having some effect on markets. Gold

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Speaker 2: and silver we've been telling you about both significantly rallying today.

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Speaker 2: Gold's up one point six percent, silver is up one

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Speaker 2: point nine percent as well. The Bloomberg dollar spot indacts

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Speaker 2: a tenth of one percent weaker, and stock futures on

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Speaker 2: wall streets the moment are lower two four tenths lower

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Speaker 2: for SMP Mini features. In a moment, we'll bring you

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Speaker 2: more on events in the Middle East, plus can Europe

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Speaker 2: hatch up in the AI race. But another story that

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Speaker 2: I've been reading this morning, but had the crash and

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Speaker 2: cryptocurrencies played out over the weekend, so some of those

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Speaker 2: US China trade headlines on Friday sparking is sell off

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Speaker 2: across many asset classes. But Bitcoin plunged around thirteen percent

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Speaker 2: after those tensions spike. Bloomberg's Alga Karifo has been writing

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Speaker 2: about how the slump was much steeper in the old

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Speaker 2: coin market, which are these as she described some ecosystems

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Speaker 2: of speculative tokens that have promised generational wealth through viral memes,

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Speaker 2: big name branding, and blind faith in memento. Well, it

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Speaker 2: seems that blind faith wasn't very well placed when we

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Speaker 2: look at the one hundred and thirty one billion dollars

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Speaker 2: in value raised from those old coins. That's according to

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Speaker 2: ten x Research. Now, this is a sector built on

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Speaker 2: thin air liquidity, speculative narratives, and hypes, so it is

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Speaker 2: more vulnerable to bigger swings. But August writing that the

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Speaker 2: crash raises doubts about the future of this whole ecosystem.

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Speaker 2: Traders and market makers see structural support for these tokens

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Speaker 2: now eroding with fewer buyers and rise risk a version.

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Speaker 2: Could this be a freeze for niche meme coins like

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Speaker 2: doge coin. You can read august Fulpolice at Bloomberg dot

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Speaker 2: com and put a link to it. In our podcast

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Speaker 2: show Notes to the Middle East nowt where US President

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Speaker 2: Donald Trump talked about a new beginning for the region

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Speaker 2: after the release of Israeli hostages and Palestinian prisoners under

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Speaker 2: the US brokers ceasefire. Yesterday, our head of Middle Eastern

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Speaker 2: North Africa covered, Stuart Livingston Wallace joins me now for more. Stuart,

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Speaker 2: let's start first of all with how yesterday went. Was

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Speaker 2: this a big success for Donald Trump?

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Speaker 5: Yeah?

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Speaker 7: I think it was, and I think it would be

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Speaker 7: mean spirited to say otherwise. And if you think about

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Speaker 7: what he achieved that certainly his predecessor and many other

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Speaker 7: international leaders had failed to achieve over a couple of years,

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Speaker 7: which was ultimately the release of the hostages and also

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Speaker 7: the release of a couple of thousand Palestinian detainees and prisoners.

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Speaker 7: So just in terms of the kind of the human impact,

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Speaker 7: it was a really big day, I think, and particularly

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Speaker 7: for the region. And then to get that many lead

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Speaker 7: and I'm referring, of course to the summit and Schelmushak

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Speaker 7: into a room at short notice I think speaks volumes

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Speaker 7: to how consequential those actions have been.

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Speaker 2: Of course, the signing was the big moment, but what

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Speaker 2: sort of plans emerged from that summit in Egypt about

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Speaker 2: what happens next in Gaza?

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Speaker 7: Yeah, I mean, I think you can look at this

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Speaker 7: two ways. I mean, I think you can look at

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Speaker 7: it as a reminder that there is an awfully long

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Speaker 7: way to go to getting true peace, particularly in Gaza,

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Speaker 7: but I would arguably across the Middle East. But on

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Speaker 7: the other hand, you can view it as again, summoning

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Speaker 7: and successfully summoning that many leaders from around the world

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Speaker 7: at short notice shows a degree of goodwill and that

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Speaker 7: will be absolutely essential in terms of hammering out the

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Speaker 7: details of what Gaza looks like going forward, both in

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Speaker 7: terms of the reconstruction and who's going to pay for it,

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Speaker 7: who's going to provide personnel to monitor cease fires and

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Speaker 7: then to implement them. And then finally you know who's

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Speaker 7: going to be involved in formulating credible governance plan for

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Speaker 7: guards going forward.

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Speaker 2: In the immediates. What should we be expecting next in

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Speaker 2: this process.

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Speaker 7: So I mean, to some extent, now the hard work begins,

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Speaker 7: because it really is a question of hammering out exactly

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Speaker 7: who is going to take responsibility for what, because I

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Speaker 7: think no one in with you know, who has been

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Speaker 7: observing things over the last couple of years would argue

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Speaker 7: that her Mass is in any position to resume governance,

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Speaker 7: although there have been early indications that they have been

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Speaker 7: trying to reassert control. But I think that's a non

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Speaker 7: starter for just about everyone. So that probably means some

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Speaker 7: sort of international coalition over the short term, a technocratic

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Speaker 7: government of some sort and hopefully with a strong Palestinian flavor,

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Speaker 7: a reform of the Palestinian authority. And then as you

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Speaker 7: rebuild those institutions across the enclave, you try and find

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Speaker 7: a way of linking it up with the West Bank,

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Speaker 7: and you and find a way of bringing or returning

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Speaker 7: economic prosperity, because I think that is the key here

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Speaker 7: is it needs functioning infrastructure and it needs a functioning

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Speaker 7: economy for this to be viable in any sort of

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Speaker 7: time frame. What does all of.

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Speaker 2: This mean for Benjamin Nettaanna, Who will he be able

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Speaker 2: to keep a focus on security issues given the other

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Speaker 2: controversies that he has faced in his leadership.

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Speaker 7: Yeah, and that's an extremely good question, and to some

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Speaker 7: extent the landscape has shifted. I mean, you can point

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Speaker 7: to a couple of things there was that somewhat it

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Speaker 7: would appear off the cuff remark from Trump yesterday in

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Speaker 7: the Canesse where he urged the Israeli president to pardon

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Speaker 7: Bbe in relation to the trials that he is currently

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Speaker 7: going under. We'll see whether that happens. I mean, it's

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Speaker 7: not entirely unprecedented, but it would be extremely unusual. That

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Speaker 7: would remove at least some of the pressure on him,

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Speaker 7: and then it'd be interesting to see what happens at

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Speaker 7: the electoral level. I mean, up until probably a couple

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Speaker 7: of weeks ago, I think it would be very difficult

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Speaker 7: for Netanyahu to secure a win and a future election,

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Speaker 7: which has to take place by October. But you do wonder,

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Speaker 7: with release of the hostages and the seeming piece, at

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Speaker 7: least for now in Gaza, whether his electoral fortunes might

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Speaker 7: turn around, and more importantly, whether he would have to

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Speaker 7: rely on that sort of hard right members of his

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Speaker 7: coalition to form a government going forward. So I think

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Speaker 7: you know something we're going to be watching over the

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Speaker 7: next few months. Very hard to predict which WHALEI go,

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Speaker 7: but his fortunes seem marginally better than they were until

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Speaker 7: really quite recently.

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Speaker 2: Okay, Stuart Livingston Wallas it heads up our coverage of

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Speaker 2: the Middle eastern North Africa. Thank you very much for

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Speaker 2: joining us. Stay with us. More from Bloomberg Daybreak Europe

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Speaker 2: coming up after this now. European companies are striving to

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Speaker 2: claim a piece of the global AI boom, but they

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Speaker 2: remain dependent on American firms like Nvidia and open Ai.

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Speaker 2: Across the continent. There are fears that a failure to

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Speaker 2: invest heavily in AI locally women losing talent and abandoning

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Speaker 2: yet another tech revolution to Silicon Valley. Our AI reporter

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Speaker 2: Rachel met has been writing about this, and she joins

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Speaker 2: us now for more. Rachel, good to talk to you.

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Speaker 2: Did you hear that about these fears from European policymakers

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Speaker 2: and executives.

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Speaker 1: I think a lot of people are concerned that, as

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Speaker 1: we've seen in the past, there have been a case

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Speaker 1: after case where in Europe technology revolutions have come and

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Speaker 1: they have gone, and the continent and the individual countries

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Speaker 1: just have not really been in charge of their destinies

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Speaker 1: with these technologies. We've seen that with mobile, with cloud,

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Speaker 1: et cetera. And with AI. I think people really want

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Speaker 1: to be in charge, especially because they see it as

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Speaker 1: a technology that will play into a lot of different

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Speaker 1: industries and could have a lot of different impacts. It

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Speaker 1: could be it's necessary for things like healthcare, it could

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Speaker 1: be used in defense things like that. Especially, you know,

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Speaker 1: when you're talking about things that are really sensitive data wise,

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Speaker 1: you want to have more control over them as a country.

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Speaker 2: Is this a lack of investment that's the source of this,

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Speaker 2: or is it just simply that the drivers of innovation

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Speaker 2: and AI are just concentrated and solicon Valley.

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Speaker 1: I think there's a few different things going on, and

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Speaker 1: our reporting seem to indicate that there are a bunch

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Speaker 1: of different factors here. You definitely have a lot of

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Speaker 1: people that are in Silicon Valley, but there's plenty of

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Speaker 1: talent in Europe, in France, in Germany, in the UK,

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Speaker 1: in many other countries as well, and I think a

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Speaker 1: lot of companies are saying, hey, we want to make

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Speaker 1: sure we keep these smart people that we have here.

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Speaker 1: They have people going through the universities and they want

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Speaker 1: to keep them there. You find ways to keep them there,

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Speaker 1: find ways to make it attractive for people to build

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Speaker 1: companies there. And there is definitely investment, but it's true

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Speaker 1: that it is a fraction of what companies collectively in

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Speaker 1: the US are investing, but it's still not an insignificant

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Speaker 1: amount of money that they are investing in AI.

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Speaker 2: This reporting Rachel will cause a lot of hand ringing

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Speaker 2: in Brussels where I am, but really in many parts

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Speaker 2: of Europe as well that Europe wants to avoid becoming

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Speaker 2: a tech colony. Can Europe catch up in this or

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Speaker 2: is it too late already?

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Speaker 1: I think that there's a lot of work still to

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Speaker 1: be done, is what it seems like we were finding

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Speaker 1: in our reporting. There is, as you mentioned, an investment,

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Speaker 1: There's still a lot of money that needs to be invested,

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Speaker 1: and there's also, I think a lot of thinking that

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Speaker 1: needs to be done about what are the goals here

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Speaker 1: and what does it mean to have sovereign AI. I

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Speaker 1: think one of the first questions we asked each person

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Speaker 1: we interviewed was what does sovereign AI mean to you?

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Speaker 1: And it's kind of a squishy term that seems to

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Speaker 1: have a lot to do with control over the sort

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Speaker 1: of start to finish process of AI and of chips

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Speaker 1: and of cloud services, and of the models themselves. You

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Speaker 1: know where they're operated and who's building them in those

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Speaker 1: kinds of things. But you also need to be realistic

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Speaker 1: about the fact that you simply can't do everything yourself. Perhaps,

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Speaker 1: and I think there's a number of companies that are

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Speaker 1: trying to make this work. It's going to be really

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Speaker 1: interesting to see you in the coming years how it

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Speaker 1: all pans out.

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