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

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

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Speaker 2: the seventeenth of March. I'm Caroline hepkea in London and.

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Speaker 3: I'm Stephen Carolin Brussels. Coming up today, Iran baum's oil

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Speaker 3: and gas fields across the Gulf, as US President Trump's

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Speaker 3: calls for help are met with caution and rejection.

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Speaker 4: A trillion dollar forecast.

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Speaker 2: Nvidia's Jensen Wong makes an eye catching projection for next.

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Speaker 3: Year plus as US doocs of their best day since February.

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Speaker 3: Are global markets too complacent about the risks of war?

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Speaker 4: Let's start with a round up of our top stories.

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Speaker 3: Iran has stepped up attacks on energy infrastructure across the

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Speaker 3: Middle East, once again pushing the price of oil higher.

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Speaker 3: Operations were suspended at the Shan Natural Gas Field and

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Speaker 3: the United Arab Emirates after a drone strike, while an

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Speaker 3: Iraqi oil field and key Emarati Port were also targeted

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Speaker 3: by Irain in drones and missiles. That's his US Treasury

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Speaker 3: Secretary Scott Bess and tild CNBC that they are allowing

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Speaker 3: around to continue shipping crewed via the Strait of Hormuz.

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Speaker 3: Rebecca Babin is a senior energy trader at CIBC Private

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Speaker 3: Wealth Group.

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Speaker 5: On the one hand, we're getting some signs that there's easing,

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Speaker 5: whether it's through traffic through the Strait of Hormuz, a

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Speaker 5: trickle but directionally better than the direction it was going.

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Speaker 5: We also get some rhetoric that there may be an

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Speaker 5: off ramp emerging in the background, while at the same

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Speaker 5: time we still see energy infrastructure targeted. So there's this

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Speaker 5: potion poll that's constantly kind of dragging the market higher

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Speaker 5: and lower each day, just based on the sheer amount

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Speaker 5: of headlines that are hitting.

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Speaker 3: Rebecca Babin was speaking as Goldman Sachs warned that the

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Speaker 3: largest oil market shock in history will have a greater

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Speaker 3: impact on products such as jet fuel and diesel than

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Speaker 3: on crude. While crude prices have surged by more than

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Speaker 3: forty percent since the first attacks, at fuel prices across

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Speaker 3: parts of Asia have doubled.

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Speaker 4: In some cases.

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Speaker 3: Energy consumers from India to Japan are confronting shortages.

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Speaker 2: US President Donald Trump has reiterated his calls for other

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Speaker 2: countries to help secure the Strait of Hormuz, saying they

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Speaker 2: should be jumping to help us because we've helped them

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Speaker 2: for years stay out of wars. However, US allies in

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Speaker 2: Europe and Asia have so far appeared unenthusiastic about the prospect.

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Speaker 2: European Union fine ministers meeting in Brussels yesterday said that

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Speaker 2: they did not want to escalate the conflict. Meanwhile, UK

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Speaker 2: Prime Minister Kis Starmer said Britain is working with security

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Speaker 2: partners to draft a viable collective plan to reopen the Strait.

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Speaker 4: While taking the necessary action to defend.

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Speaker 6: Ourselves and our allies, we will not be drawn into

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Speaker 6: the wider war.

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Speaker 2: Starmer was speaking as Britain explores whether to contribute autonomous

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Speaker 2: mine hunting drones to US efforts. Few hours later, President

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Speaker 2: Trump took aim at the Prime minister.

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Speaker 7: So I was very upset with not upset. I was

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Speaker 7: not happy with the UK. I think they'll be involved, Yeah, maybe,

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Speaker 7: but they should be involved enthusiastically. We've been protecting these

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Speaker 7: countries for years with NATO. Whose NATO is US. You

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Speaker 7: can ask Putin. Putin fears US, he has a ver

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Speaker 7: He has no fear of Europe whatsoever.

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Speaker 2: The US President said that more than seven thousand targets

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Speaker 2: have been struck and warned that he could expand strikes

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Speaker 2: on kaj Island to include oil infrastructure. According to figures

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Speaker 2: from governments and non governmental organizations, at least four thousand

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Speaker 2: people have now died in the conflict.

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Speaker 3: President Trump has asked to delay his summers with Chinese

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Speaker 3: leader she's Ingping as the war up ends his other priorities.

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Speaker 3: He says it's important for him to remain in Washington

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Speaker 3: to oversee the conflict in the Middle East. Bloomberg's chief

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Speaker 3: North Asia correspondent Steven Engel says that's likely the best

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Speaker 3: outcome for China too.

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Speaker 8: All cards are off the table. If Donald Trump's number

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Speaker 8: one goal right now is to get his allies, and

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Speaker 8: he included China on board to help calm the situation

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Speaker 8: in the Straits of Hormuz. If he is on camera,

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Speaker 8: was she jimping in Beijing? And he asked she are

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Speaker 8: you going to support the peace efforts in the Strait

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Speaker 8: of Hormones?

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Speaker 4: What's she jimping going to say?

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Speaker 3: Anger, lads? The sou Much was supposed to be a

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Speaker 3: key moment where the two countries would set out a

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Speaker 3: new economic relationship. The US present demanded China join his

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Speaker 3: efforts to reopen the Strait of Hormuz. China's State on

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Speaker 3: Global Times newspaper dismissed the idea as Trump's attempt to

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Speaker 3: spread the risk of quote a war that Washington started

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Speaker 3: and can't finish.

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Speaker 2: European natural gas prices will be forty percent higher than

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Speaker 2: previously projected for twenty twenty six, that's according to a

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Speaker 2: report from HSBC, and they'll stay high in twenty twenty seven.

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Speaker 2: The bank expects the closure of the Straight of Homous

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Speaker 2: to set off a supply shortage, which will leave European

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Speaker 2: countries paying a significant premium. The forecast stands in stark

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Speaker 2: contrast to US natural gas futures, which have barely budged.

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Speaker 2: Ireland's Finance Minister Simon Harris says the EU is discussing

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Speaker 2: what tools to use to mitigate the economic impact.

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Speaker 6: We are prepared in Ireland to act, but we're trying

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Speaker 6: to make sure that the course of action we take

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Speaker 6: is the correct one, because while we're talking about energy today,

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Speaker 6: should this conflict go on for a prolonged period of time,

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Speaker 6: of course the economic impact is beyond energy, inflationary impact

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Speaker 6: on growth, impact on the Eurozone. So we do need

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Speaker 6: to try and make sure we get the best possible

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Speaker 6: data across the Eurozone in the days ahead.

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Speaker 2: Simon Harris, who is also Ireland's Deputy Prime Minister, added

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Speaker 2: that it builds the case for energy and dependence. Ireland's

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Speaker 2: Prime Minister, Mijol Martin, will be one of the first

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Speaker 2: world leaders to meet the US President Donald Trump since

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Speaker 2: the attacks on Ivonne when he visits the White House

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Speaker 2: today for a Saint Patrick's Day ceremony.

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Speaker 3: Private credit default rates are on the rise. Those the

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Speaker 3: findings of new research illustrating the impact of tech disruption.

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Speaker 4: Boom Brooks two out of bio has.

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Speaker 9: More elevated leverage and looming maturity walls could push default

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Speaker 9: rates to near peak levels unseen since the pandemic. That's

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Speaker 9: the view of a team of analysts at Morgan Stanley,

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Speaker 9: who say things are only set to get worse as

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Speaker 9: AI becomes more advanced. Global credit markets have recently come

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Speaker 9: under pressure as investors assess potential software driven revenue stream

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Speaker 9: interference and after years of predictable earnings and higher margins.

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Speaker 9: Morgan Stanley says software is the largest sector in business

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Speaker 9: development portfolios, but now angst around the area is pushing

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Speaker 9: redemption requests higher as managers mull their next moves. In

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Speaker 9: London Tea at a bio Bloomberg Radio.

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Speaker 3: Answer, Rachel Reeves has vowed that the UK will adopt

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Speaker 3: artificial intelligence faster than any other Group of Seven nation,

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Speaker 3: as she hailed the technology as a key plank of

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Speaker 3: her bid to spur economic growth for Rosy when Parts

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Speaker 3: has more.

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Speaker 10: Britain's Chancellor will use the annual Mace Lecture today to

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Speaker 10: set out her economic vision, highlighting AI, regional growth and

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Speaker 10: closer tized with the European Union as the biggest opportunities

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Speaker 10: for growth. She'll say that Britain cannot affords to standstill

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Speaker 10: and she wants the technologies of the future invented, built

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Speaker 10: and deployed here in this country. Separately, the Department of Science,

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Speaker 10: Innovation and Technology says the UK will spend more than

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Speaker 10: a billion pounds on quantum computing research over the next

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Speaker 10: four years, boosting a technology that's increasingly considered critical to

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Speaker 10: national security. In London, i'm une parts of Bloomberg Radio.

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Speaker 2: Nvidia is predicting that its flagship AI processors will help

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Speaker 2: to generate a trillion dollars in sales through twenty twenty seven,

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Speaker 2: CEO Jensen Wong made the four past during his speech

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Speaker 2: to the company's annual product events.

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Speaker 3: And in video.

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Speaker 11: As you know today, we're the only platform in the

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Speaker 11: world today that runs every single domain of AI across

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Speaker 11: every single one of these AI models in language and biology,

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Speaker 11: and computer graphics, computer vision and speech, and videos. Architecture

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Speaker 11: is fungible for all of that, and we're incredible for

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Speaker 11: all of that and videos.

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Speaker 2: Jensen Wong also announced plans to push deeper into central

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Speaker 2: processing units and introduce new semiconductors. The company is competing

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Speaker 2: with increasingly skeptical investors, though, who want more evidence that

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Speaker 2: its success will last. Following the news and video, shares

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Speaker 2: rose as much as four point eight percent before pairing

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Speaker 2: gains closing up one point six percent in New York.

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Speaker 2: So those are our top stories for you today. In

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Speaker 2: the markets, Brain crude futures currently trading just shive one

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Speaker 2: hundred and five dollars a bowl, up by point three percent,

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Speaker 2: this despite a retreat on Monday Goldman Sachs as we've

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Speaker 2: heard seeing jet fuel diesel prices as being more affected

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Speaker 2: than crude. Remember, the global benchmark is are nearly seventy

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Speaker 2: percent so far this year, so very elevated volatility in

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Speaker 2: oil markets, but weirdly that doesn't seem to be translating

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Speaker 2: into stocks. Lots of questions about why global ecuties on

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Speaker 2: the Your Country World Index are actually up a tenth

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Speaker 2: of one percent and up in some markets in Asia.

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Speaker 2: Stop futures for the US in Europe though deeply in

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Speaker 2: the red, down six tents of one percent. Teny Treasury

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Speaker 2: yields up three basis points. This morning, the RBA hiked

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Speaker 2: interest rates, which is interesting at the start over a

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Speaker 2: lot of central bank rate decisions that the RBA hiking

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Speaker 2: to four point one percent today.

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Speaker 4: Those are the markets.

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Speaker 3: In a moment, we'll discuss why stock markets could be

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Speaker 3: too complacent on events in the Middle East, plus why

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Speaker 3: the Irish Phucks annuals in Patrick's day trip to the

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Speaker 3: White Eyed Looks were politically proc arius than ever. But

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Speaker 3: first let's bring you up to date with the latest

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Speaker 3: from the Middle East. On the eighteenth day of the war,

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Speaker 3: a Middle East managing editor, Honor Aunt, joins us. Now

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Speaker 3: for more, Honor, we have this use of around attacking

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Speaker 3: a natural gas field in the UAE. Its latest strike

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Speaker 3: in a series on energy infrastructure. How much disruption are

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Speaker 3: these attacks causing.

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Speaker 1: And we need to look at the latest attack in

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Speaker 1: the UEE on the Shot gas field in terms of

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Speaker 1: what it represents in terms of the change in the

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Speaker 1: kind and type of attacks that Iran is staging. This

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Speaker 1: is the first time there has been an attack on

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Speaker 1: an upstream acid in the ue Upstream acid means an

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Speaker 1: asset that produces oil or gas, so this marks a

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Speaker 1: first in the ue and it becomes the second large

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Speaker 1: gas production site or gas production facility that can go

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Speaker 1: offline as a result of Iran after Qatar already stopped

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Speaker 1: producing LEG at a key facility during the first week

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Speaker 1: of the war. So that original stoppage in Katar represents

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Speaker 1: a huge amount of global LEG output. Qatar is one

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Speaker 1: of the top three producers of the field in the world,

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Speaker 1: and now we have this field attack in Abu Dhabi

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Speaker 1: or near abudab and that accounts for about a fifth

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Speaker 1: of the national gas output. We don't know if output

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Speaker 1: has come to stop as a result of this morning's attack,

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Speaker 1: but if it does, then that's definitely a huge blow

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Speaker 1: to gas supply in the region.

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Speaker 2: Yeah, exactly, And I mean, just Ine, we've seen prices

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Speaker 2: up by something like sixty percent for that gas prices,

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Speaker 2: so that would be a very big development. President Trump

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Speaker 2: has again appealed for help to reopen the Straight of Hormuz.

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Speaker 2: His allies, including those in Europe, don't seem very convinced

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Speaker 2: that's true.

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Speaker 1: What President Trump said yesterday was slightly different than his

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Speaker 1: comments in the preceding two days. He claimed that there

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Speaker 1: are numerous countries that are willing to and will help

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Speaker 1: will heed his call for help to reopen the Strait

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Speaker 1: of Hormus. We don't quite know which countries he was

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Speaker 1: referring to, he said, Mark Rubio, his Secretary of State,

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Speaker 1: will announce them later. But we have seen the president

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Speaker 1: of Finland saying that NATO countries should take Trump's call seriously,

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Speaker 1: and those countries that can help should do so. So

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Speaker 1: there are some signs that there may be countries who

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Speaker 1: might respond positively to Trump's call for help. But on

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Speaker 1: the other hand, we have seen some of the major partners,

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Speaker 1: such as the UK, Japan, Australia and others, they denying

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Speaker 1: that they want to take part in this mission, although

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Speaker 1: the UK did signal that, you know, they just don't

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Speaker 1: want to take part in the wider war, so there

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Speaker 1: might be some nuance there, but we did see in

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Speaker 1: all out positive response.

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Speaker 3: Honor and our managing editor for the Middle East. We'll

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Speaker 3: have to leave it there. Thank you very much for

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Speaker 3: bringing us up to date.

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Speaker 4: Stay with us.

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Speaker 3: More from Bloomberg Daybreak Europe coming up after this now.

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Speaker 2: Oil prices remain well above one hundred dollars about this morning,

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Speaker 2: but equity markets rose in the US yesterday and in

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Speaker 2: Asia today as investors focus on an upbeat forecast from

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Speaker 2: chip maker and Vidia. Our Markets Live Executive editor Mark

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Speaker 2: Hudmore joins us now for more. Mark, good morning. Can

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Speaker 2: you explain what's going on there? We're eighteen days into

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Speaker 2: this war that is causing major disruption to energy supplies,

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Speaker 2: but stock markets don't seem to be that concerned, at

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Speaker 2: least they're not showing it.

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Speaker 12: It's interesting to say that you'd be probably quite surprised

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Speaker 12: to hear that the MSCI All Country World Index is

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Speaker 12: having its worst month in three and a half years.

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Speaker 12: So it's worse months in September twenty twenty two, which

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Speaker 12: was a really bleak year for stock markets. I think

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Speaker 12: it fell twenty seven percent of that decline, so stock

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Speaker 12: are having a terrible month. The reason that you may

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Speaker 12: be missing the pain is that US stock markets aren't

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Speaker 12: down much. They're only down a little bit, and that

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Speaker 12: kind of speaks to the problem what's been holding up

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Speaker 12: the US stock market. If you look at kind of

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Speaker 12: the performer so far this month, technology, software, and financials, Well,

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Speaker 12: what was the problem before this month started? Before the conflict,

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Speaker 12: we were worried about private credit wearing it financials and

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Speaker 12: we're worried about the SaaS apocalypse, the effect on software

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Speaker 12: as a service industry. So software and financials were short

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Speaker 12: and they're the outperformers this month, and that speaks the

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Speaker 12: fact that because the conflict, people are just cutting risk,

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Speaker 12: cutting positioning. So the theme going into March where US

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Speaker 12: stock markets under forming in particular financials and software, with

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Speaker 12: Asian European markets booming. What we're seeing this month is

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Speaker 12: Asian European markets getting hit generally quite badly, European markets

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Speaker 12: particular so far, with US stock markets holding up. Okay,

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Speaker 12: as people close those short positions. So I would say, yeah,

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Speaker 12: worse month of three and a half years means that

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Speaker 12: equities are reacting, but I do think they can react

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Speaker 12: a lot more. I think as the first wave is

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Speaker 12: just people cutting risk, they're not yet trading very barishly,

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Speaker 12: yet they will do absolutely I think, you know, I

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Speaker 12: remain very bearish in stocks. I think, yes, it's the

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Speaker 12: worst month three and a half years, but it can

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Speaker 12: get a lot worse.

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Speaker 3: So what could cause equity markets to wake up to

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Speaker 3: this so that we would see signs of it getting

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Speaker 3: a lot worse.

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Speaker 12: Yeah, Look, stock stocks people are not inclined to sell

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Speaker 12: down because the macro backdrop is so strong. In terms

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Speaker 12: of that, before this conflict, you had just a massive

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Speaker 12: capex bubble, which means loads of private sector injection of

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Speaker 12: money into the economy. You have massive fiscal stimulus all

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Speaker 12: over the world from Japan, Europe, US, China, so basically

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Speaker 12: every part of the world is kind of spending money

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Speaker 12: and yet growth is okay, and we got relatively easy

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Speaker 12: monetary policy relative to inflation. So literally this is the

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Speaker 12: golden era from stock markets. As the kind of the

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Speaker 12: going into the conflict, the macrobotrip was incredibly strong, which

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Speaker 12: means that stock investors don't want to sell down their

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Speaker 12: lungs while they retain hope that maybe there's a resolution

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Speaker 12: in the conflict. Now not a geopolitical expert, but I

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Speaker 12: see no chance of the straight opening properly anytime soon,

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Speaker 12: which is why I think, you know, those people who

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Speaker 12: are cleaning onto THO positions will have to capitulate at

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Speaker 12: some point. But I understand why they're kind of staying

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Speaker 12: relatively stubborn and why you know, the losses of about

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Speaker 12: five percent in the global index so far this month

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Speaker 12: aren't more dramatic given the scale the shock out there.

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Speaker 12: What is going to trigger them? Well, you know, essentially

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Speaker 12: as the conflict goes on day to day, they increase,

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Speaker 12: you have to give up hope there's a growth impact.

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Speaker 12: But also it's what's happening on the yield side. We're

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Speaker 12: just seeing, you know, rates continue to drift higher.

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Speaker 7: Now.

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Speaker 12: I think it's hard for them to go much higher

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Speaker 12: as we start migrating into the growth impact, which is

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Speaker 12: going to be the next lens. But certainly it's the

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Speaker 12: squeezhiger and yields that's starting to hurt stocks much more acutely.

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Speaker 2: Yeah, absolutely, just look at europeon yields for that. We

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Speaker 2: also do have a very big week for central bank decisions.

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Speaker 2: We started with the RBA with a hike today when

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Speaker 2: might it become their problem?

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Speaker 12: I mean, it is there a problem already. The problem

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Speaker 12: is though, that they don't know exactly which problem it is.

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Speaker 12: Is it going to be the inflationary impulse or is

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Speaker 12: it going to last long enough for the demand destruction

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Speaker 12: for there to be risk of a global recession. You know,

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Speaker 12: that sounds like a bit of a panic mongery phrase

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Speaker 12: right now, and it would be if the if the

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Speaker 12: conflict's over soon. But you know, if the if the

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Speaker 12: conflict carries on for another couple of months, that's that's

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Speaker 12: a serious threat. We've got. We've got the risk of

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Speaker 12: a proper crisl in hands. I'm not saying we're heading

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Speaker 12: for a proper crisis, but we've got a we've got

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Speaker 12: a risk out there, and we at the moment, we

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Speaker 12: don't have an exit ramp. The incentives don't seem to

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Speaker 12: be there for the strait to be opened. So it

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Speaker 12: is the Center Banks problems, but it's not. It's not.

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Speaker 12: They're not clear which problem it is and what they

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Speaker 12: can do about it, which is why RBA was probably

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Speaker 12: the most exciting one out of the way. Most the

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Speaker 12: rest of them will be ultimately quite boring. That they're

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Speaker 12: monitoring their watching. You know, we'll trade them the short term.

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Speaker 12: The short term people will care about them, but ultimately

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Speaker 12: they'll all be forgotten what they said this week by

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Speaker 12: next week, because it all depends on the path of

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Speaker 12: the conflict.

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Speaker 3: Okay, Mark, I should say, given that we are two

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Speaker 3: Irish people abroad, we're morally obliged to wish you to

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Speaker 3: the same happy Saint Patrick's Day on this March seventeenth.

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Speaker 3: What does Saint Patrick Day look like in Singapore?

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Speaker 12: It doesn't. It doesn't feel like the right mood to

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Speaker 12: wish happy Saint Patrick Day, doesn't. I will say that

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Speaker 12: it's they make a you know, a pretty good party

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Speaker 12: out of it here in Singapore. It's very impressive, I

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Speaker 12: will I think there's some commercial interests. Guinness seems to

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Speaker 12: have hijacked into a three week festival, which is impressive effort.

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Speaker 12: But yes, there's there's endless days of celebrating to Patrick's Day.

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Speaker 3: Here, Yes, indeed, And this is my first time doing

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Speaker 3: in Belgium, and they have the Fine Arts Institute for

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Speaker 3: the party here this evening, so looking forward to that.

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Speaker 3: But thank you very much to our Markets Live Executive

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Speaker 3: editor Mark Cudmore and Carolyn, this is something that we've

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Speaker 3: been reading about. The reporting from our colleagues in Dublin

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Speaker 3: this morning as well, Jennifer Duggan and Olivia Fletcher reporting

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Speaker 3: on the Thetics trip to the White House. We mentioned

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Speaker 3: it in the News World a little bit earlier as well.

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Speaker 3: It's this annual event, the handing over of the Bowl

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Speaker 3: of Shamrock to the US President. But it's an event

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Speaker 3: that not this time around. Perhaps isn't the soft power

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Speaker 3: that's in concern, but actually the risks involved, and that's

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Speaker 3: that they've been reporting on because of course Ireland's economic

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Speaker 3: ties to the US are very deep, and you know,

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Speaker 3: given the moment that where we are geopolitically in the world,

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Speaker 3: there's fraught with danger, is how our colleagues refer to it.

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Speaker 4: Yeah, look, I think you're right.

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Speaker 2: In any other year you'd be talking about as the

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Speaker 2: Irish Independent did diaspora diplomacy. You know, I was in

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Speaker 2: Europe over the weekend in Madrid and there was a

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Speaker 2: huge parade Guinness sponsored of Saint Patrick's Day and it

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Speaker 2: is very impressive, this idea of soft power. But as

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Speaker 2: you say, the T shirt's going to be in the

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Speaker 2: White House at a time when President Trump, you knows,

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Speaker 2: thinking about trying to counsel delay his trip to China

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Speaker 2: in order to focus on the war in Iran. Will

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Speaker 2: there be any pressure on Ireland? We don't know, but yes,

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Speaker 2: it's this is difficult time, isn't it.

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Speaker 9: Yeah?

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Speaker 3: And if you're looking for some Irish culture this morning,

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Speaker 3: can I recommend listening to Dolores Kine, the Irish folk

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Speaker 3: singer who died yesterday, part of the best selling Irish

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Speaker 3: album in history, which is A Woman's Heart from nineteen

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Speaker 3: ninety two. If you want to set off your Patock's

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Speaker 3: day on the right note, this is Bloomberg Daybreak Europe,

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Speaker 3: your morning brief on the stories making news from London

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Speaker 3: to Wall Street and beyond.

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Speaker 2: Spotify and anywhere else you get your podcasts.

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00:20:46,320 --> 00:20:49,359
Speaker 3: You can also listen live each morning on London Dab Radio,

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Speaker 3: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 2: Our flagship New York station is also available on your

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

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Speaker 4: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carol. Join us again tomorrow morning for all

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Speaker 3: the news you need to start your day, right here

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Speaker 3: on Bloomberg day Break. Europe