1 00:00:02,920 --> 00:00:08,240 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,720 --> 00:00:13,080 Speaker 2: This is Bloomberg day Break Weekend, our global look at 3 00:00:13,119 --> 00:00:15,400 Speaker 2: the top stories in the coming week from our Daybreak 4 00:00:15,400 --> 00:00:17,959 Speaker 2: anchors all around the world, and straight ahead on the program, 5 00:00:18,040 --> 00:00:21,400 Speaker 2: a big decision about interest rates from the Federal Reserve, 6 00:00:21,600 --> 00:00:23,680 Speaker 2: plus a look at corporate earnings from the world's biggest 7 00:00:23,680 --> 00:00:27,200 Speaker 2: sportswear company, Nike. I'm Tom Busby in New York. 8 00:00:27,440 --> 00:00:29,760 Speaker 1: I'm Caroline Hepge here in London, where we're looking at 9 00:00:29,760 --> 00:00:32,480 Speaker 1: the next Bank of England decision and how fast rates 10 00:00:32,520 --> 00:00:33,200 Speaker 1: may come down. 11 00:00:33,479 --> 00:00:37,200 Speaker 3: I'm Doug Prisner looking at whether China's autumn stimulus will 12 00:00:37,240 --> 00:00:37,880 Speaker 3: bear fruit. 13 00:00:38,479 --> 00:00:42,680 Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:42,720 --> 00:00:46,600 Speaker 4: eleven three on New York, Bloomberg ninety nine to one, Washington, DC, 15 00:00:47,040 --> 00:00:51,920 Speaker 4: Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius 16 00:00:52,080 --> 00:00:55,440 Speaker 4: XM one twenty one, and around the world on Bloomberg Radio, 17 00:00:55,520 --> 00:00:57,640 Speaker 4: dot Com and the Bloomberg Business Act. 18 00:01:02,600 --> 00:01:04,440 Speaker 2: Good day to you. I'm Tom Busby, and we begin 19 00:01:04,520 --> 00:01:07,960 Speaker 2: today's program with the Federal Reserve. The Federal Open Market 20 00:01:08,000 --> 00:01:10,479 Speaker 2: Committee will wrap up a two day meeting this Wednesday, 21 00:01:10,760 --> 00:01:15,120 Speaker 2: expected to issue its next monetary policy decision on interest rates, 22 00:01:15,160 --> 00:01:16,959 Speaker 2: and for more and what to expect. We're joined by 23 00:01:16,959 --> 00:01:22,120 Speaker 2: Michael McKee, Bloomberg International Economics and Policy correspondent. Michael, thank 24 00:01:22,160 --> 00:01:25,120 Speaker 2: you for being here. It looks like all the stars 25 00:01:25,120 --> 00:01:28,640 Speaker 2: have aligned for the Fed to once again cut interest rates. 26 00:01:28,800 --> 00:01:30,240 Speaker 2: Is that what you're expecting to see? 27 00:01:30,480 --> 00:01:33,080 Speaker 5: That is what we are expecting to see. A couple 28 00:01:33,120 --> 00:01:37,279 Speaker 5: of data points late in the week last week raised 29 00:01:37,280 --> 00:01:41,520 Speaker 5: some questions. One was the rise in the PPI stronger 30 00:01:41,560 --> 00:01:44,720 Speaker 5: than expected, but a lot of that was due to 31 00:01:44,840 --> 00:01:48,760 Speaker 5: just food prices. And then jobless claims came in high, 32 00:01:48,800 --> 00:01:51,320 Speaker 5: but that was the week after Thanksgiving, and of course 33 00:01:51,520 --> 00:01:55,120 Speaker 5: everybody took two days off during Thanksgiving week, so people 34 00:01:55,160 --> 00:01:58,000 Speaker 5: didn't file. So once you look through those things and 35 00:01:58,040 --> 00:02:02,840 Speaker 5: you look at where CPI came in and the stuff 36 00:02:02,880 --> 00:02:07,160 Speaker 5: that goes into the PCE report, which is the Fed's 37 00:02:07,200 --> 00:02:11,040 Speaker 5: inflation measure, it looks like we're still making progress on 38 00:02:11,120 --> 00:02:15,440 Speaker 5: inflation some and the labor market doesn't seem to be 39 00:02:15,440 --> 00:02:17,959 Speaker 5: in terrible trouble. So the Fed has made it clear 40 00:02:18,040 --> 00:02:20,560 Speaker 5: under those circumstances they want to cut rates. 41 00:02:20,760 --> 00:02:25,000 Speaker 2: Well, let's talk about inflation, because we've made tremendous progress 42 00:02:25,040 --> 00:02:27,919 Speaker 2: since a high of over nine percent June of twenty one, 43 00:02:28,040 --> 00:02:31,520 Speaker 2: but it seems to have stalled at four months in 44 00:02:31,520 --> 00:02:34,919 Speaker 2: a row of three point three percent increase in inflection. 45 00:02:34,960 --> 00:02:36,480 Speaker 2: I mean, what's behind that stall? 46 00:02:36,880 --> 00:02:39,800 Speaker 5: You're talking about the CPI numbers. And in the CPI 47 00:02:39,960 --> 00:02:42,360 Speaker 5: things that had been going up went down, things that 48 00:02:42,440 --> 00:02:44,760 Speaker 5: had been going down went up. It's sort of the 49 00:02:45,200 --> 00:02:49,560 Speaker 5: usual volatility. There was some good news in the CPI 50 00:02:49,680 --> 00:02:52,400 Speaker 5: report and that owner's equivalent rent, which is the strange 51 00:02:52,400 --> 00:02:56,560 Speaker 5: way the government measures housing costs, went down to just 52 00:02:56,600 --> 00:03:00,560 Speaker 5: a two tense game. That's the smallest since January of 53 00:03:00,560 --> 00:03:04,639 Speaker 5: twenty twenty one. Fed's been waiting for housing to slow down, 54 00:03:04,639 --> 00:03:09,840 Speaker 5: housing prices to slow down, and that may be finally happening, 55 00:03:09,840 --> 00:03:11,799 Speaker 5: and if that's the case, we should pick up steam 56 00:03:12,240 --> 00:03:16,280 Speaker 5: in inflation coming down. But the FED also predicted some 57 00:03:16,400 --> 00:03:19,320 Speaker 5: months ago that we would run into this, that not 58 00:03:19,360 --> 00:03:21,720 Speaker 5: only would it be a bumpy path, but that we 59 00:03:21,760 --> 00:03:24,240 Speaker 5: would see the year or a year rate go up 60 00:03:24,720 --> 00:03:28,000 Speaker 5: because we saw it go down earlier in the year, 61 00:03:28,040 --> 00:03:33,240 Speaker 5: and the base effects change just mechanically pushes it higher. 62 00:03:33,480 --> 00:03:36,000 Speaker 5: So they're not too worried about that at this point. 63 00:03:36,560 --> 00:03:40,119 Speaker 2: But you mentioned earlier about food prices, and anyone who 64 00:03:40,200 --> 00:03:43,840 Speaker 2: was setting a table for Thanksgiving will tell you it's unbelievable. 65 00:03:44,000 --> 00:03:49,160 Speaker 5: That's the case. The interesting thing was this year's Thanksgiving basket. 66 00:03:49,960 --> 00:03:53,800 Speaker 5: According to several economists who do this sort of thing, 67 00:03:53,840 --> 00:03:56,440 Speaker 5: they go out and they price all the ingredients that 68 00:03:56,520 --> 00:03:59,080 Speaker 5: you put into your Thanksgiving table, it was the cheapest 69 00:03:59,120 --> 00:04:02,200 Speaker 5: in years. Actually went down in price this year. But 70 00:04:03,200 --> 00:04:08,640 Speaker 5: PBI showed a big rise in egg prices this past month, 71 00:04:08,680 --> 00:04:11,760 Speaker 5: and that was much of the reason that the PPI 72 00:04:11,840 --> 00:04:17,440 Speaker 5: headline came in strong. We've had bird flu exploding around 73 00:04:17,480 --> 00:04:23,000 Speaker 5: the West especially, and we're seeing a lot of price 74 00:04:23,200 --> 00:04:27,560 Speaker 5: increases for eggs in recent months. August July was also 75 00:04:27,640 --> 00:04:30,560 Speaker 5: a fifty five percent rise like it was last month. 76 00:04:30,880 --> 00:04:32,760 Speaker 5: Because of that, they're just are you know, the chickens 77 00:04:32,760 --> 00:04:36,560 Speaker 5: are dying, So egg prices went up, and that's one 78 00:04:36,560 --> 00:04:39,240 Speaker 5: of the reasons that the Fed and others used the 79 00:04:39,279 --> 00:04:42,640 Speaker 5: core rate because there's not a lot monetary policy is 80 00:04:42,680 --> 00:04:44,559 Speaker 5: going to do about the bird flu. 81 00:04:44,880 --> 00:04:50,000 Speaker 2: Yeah, yeah, that's frightening. Another consideration the labor market you mentioned, 82 00:04:50,160 --> 00:04:53,880 Speaker 2: and we saw a big turnaround from October to November 83 00:04:54,000 --> 00:04:57,919 Speaker 2: in ads to two hundred and twenty seven thousand. So 84 00:04:58,240 --> 00:05:02,240 Speaker 2: is this something that FED expected to see. Is it's okay, 85 00:05:02,279 --> 00:05:04,480 Speaker 2: now we're back to normal, or is it you know? 86 00:05:05,480 --> 00:05:08,120 Speaker 2: And it looked like that was just an operation in October. 87 00:05:08,279 --> 00:05:11,279 Speaker 5: Well, we don't know, because we did have a very 88 00:05:11,279 --> 00:05:14,280 Speaker 5: small job creation in October in part because of the 89 00:05:14,400 --> 00:05:19,039 Speaker 5: hurricanes and the Boeing strike, and so payback was expected. 90 00:05:19,320 --> 00:05:22,720 Speaker 5: And if you take out the number of jobs from 91 00:05:22,760 --> 00:05:25,760 Speaker 5: both of those things, estimate the hurricane effect, you get 92 00:05:25,760 --> 00:05:28,240 Speaker 5: about one hundred and fifty five hundred and sixty thousand jobs, 93 00:05:28,240 --> 00:05:30,320 Speaker 5: which is kind of right in line with what we 94 00:05:30,440 --> 00:05:33,360 Speaker 5: had been seeing. So yeah, you could argue it's kind 95 00:05:33,400 --> 00:05:35,440 Speaker 5: of back to where it was. We also saw a 96 00:05:35,480 --> 00:05:39,520 Speaker 5: slight tick up in the unemployment rate because in the 97 00:05:39,560 --> 00:05:43,440 Speaker 5: household survey a lot of jobs were lost. That's always 98 00:05:43,480 --> 00:05:46,400 Speaker 5: volatile and hard to figure out, but it is the 99 00:05:46,560 --> 00:05:49,200 Speaker 5: indicator that FED watches for a sign that the economy 100 00:05:49,400 --> 00:05:52,400 Speaker 5: is slowing. But a rise to four point two percent 101 00:05:52,600 --> 00:05:55,560 Speaker 5: in November is still below the four point four they 102 00:05:55,600 --> 00:05:57,839 Speaker 5: predicted for the end of the year. So thus we 103 00:05:57,880 --> 00:06:00,880 Speaker 5: get a big rise in December will come in lower 104 00:06:00,920 --> 00:06:03,479 Speaker 5: than they thought, so they look at it the labor market, 105 00:06:03,520 --> 00:06:06,000 Speaker 5: and they're saying it's still strong enough. 106 00:06:06,360 --> 00:06:06,560 Speaker 4: Well. 107 00:06:06,600 --> 00:06:09,400 Speaker 2: Federal Reserve policymakers wrapping up their final meeting of the 108 00:06:09,480 --> 00:06:12,440 Speaker 2: year this Wednesday, a decision expected around two pm Wall 109 00:06:12,480 --> 00:06:16,400 Speaker 2: Street time. Our thanks to Michael McKee, Bloomberg International Economics 110 00:06:16,400 --> 00:06:19,920 Speaker 2: and Policy correspondent. We move now to the athletic footwear 111 00:06:19,920 --> 00:06:23,200 Speaker 2: and sports apparel giant Nike, the Dow component, reports second 112 00:06:23,240 --> 00:06:26,800 Speaker 2: quarter earnings on Thursday, the first report under new CEO 113 00:06:27,040 --> 00:06:30,159 Speaker 2: Elliott Hill. For more on how those results may have 114 00:06:30,240 --> 00:06:34,760 Speaker 2: been impacted by macroeconomic headwinds, plus an early read on 115 00:06:34,800 --> 00:06:38,880 Speaker 2: holiday sales hopefully. We're joined by Kim Bassin, Bloomberg senior 116 00:06:38,920 --> 00:06:42,080 Speaker 2: reporter covering sportswear. Kim, thank you so much for joining us. 117 00:06:42,680 --> 00:06:45,040 Speaker 2: Let's start with what you're expecting to see in Nike's 118 00:06:45,080 --> 00:06:47,120 Speaker 2: earnings this week and why. 119 00:06:47,680 --> 00:06:50,680 Speaker 6: Nike's earnings this week are going to be pretty interesting. 120 00:06:50,880 --> 00:06:54,240 Speaker 6: So they're going through a transitional period right now with 121 00:06:54,360 --> 00:06:59,240 Speaker 6: a new CEO who just started in October, and so 122 00:06:59,520 --> 00:07:02,960 Speaker 6: far we haven't heard what the plan is, right, It's 123 00:07:03,040 --> 00:07:04,719 Speaker 6: unclear where this is going to go. So it seems 124 00:07:04,720 --> 00:07:08,880 Speaker 6: that investors are just waiting patiently or inpatiently, I suppose 125 00:07:08,920 --> 00:07:12,280 Speaker 6: depends on the investor. But it looks like they're just 126 00:07:12,280 --> 00:07:16,440 Speaker 6: waiting to see what's gonna happen here. Right now, Nike 127 00:07:16,520 --> 00:07:19,080 Speaker 6: sales have been down the last two quarters, and they 128 00:07:19,080 --> 00:07:23,280 Speaker 6: are trying to figure out how to get demand back well. 129 00:07:23,520 --> 00:07:27,080 Speaker 2: Executive Chairman Mark Parker told employees back in September around 130 00:07:27,160 --> 00:07:29,200 Speaker 2: the time that Elliot Hill, just before he was named 131 00:07:29,920 --> 00:07:32,360 Speaker 2: the brand will quote get back to doing what we 132 00:07:32,480 --> 00:07:36,200 Speaker 2: do best, that's help athletes reach their potentials. So where 133 00:07:36,200 --> 00:07:39,120 Speaker 2: did they go wrong or what happened? What miscues did 134 00:07:39,120 --> 00:07:42,120 Speaker 2: they do that led to you know, several quarters in 135 00:07:42,120 --> 00:07:43,320 Speaker 2: a row of lower sales. 136 00:07:43,400 --> 00:07:45,520 Speaker 6: One of the biggest things that happened at Nike is 137 00:07:45,560 --> 00:07:48,760 Speaker 6: that they over extended on three of the big product 138 00:07:48,840 --> 00:07:52,320 Speaker 6: lines that Nike has. These are Air Force Ones, Air 139 00:07:52,480 --> 00:07:56,440 Speaker 6: Jordan Ones, and Dunks. Now, these are lifestyle shoes, right, 140 00:07:56,480 --> 00:07:58,760 Speaker 6: These are shoes not meant to be worn on like 141 00:07:58,800 --> 00:08:01,440 Speaker 6: a basketball court or a football field or anything like that. 142 00:08:01,480 --> 00:08:02,920 Speaker 7: It's it's for the sidewalk. 143 00:08:03,000 --> 00:08:07,080 Speaker 6: And these these lifestyle shoes were real hot, like enduring 144 00:08:07,280 --> 00:08:10,520 Speaker 6: and then out of the pandemic and they sold like 145 00:08:10,560 --> 00:08:12,760 Speaker 6: crazy and they became I mean, these were these billion 146 00:08:12,760 --> 00:08:17,560 Speaker 6: dollar product lines, right, but as trends changed over the 147 00:08:17,600 --> 00:08:20,880 Speaker 6: last year, those shoes weren't selling like they used to, 148 00:08:21,280 --> 00:08:26,040 Speaker 6: and Nike, back in its headquarters in Oregon, wasn't developing 149 00:08:26,280 --> 00:08:30,720 Speaker 6: new products quickly enough to replace those shoes. So now 150 00:08:30,760 --> 00:08:34,760 Speaker 6: they're figuring that out the the innovation pipeline at Nike, 151 00:08:34,880 --> 00:08:38,199 Speaker 6: trying to rush new products out in order to replace 152 00:08:38,240 --> 00:08:38,680 Speaker 6: those shoes. 153 00:08:38,720 --> 00:08:41,520 Speaker 2: Well speaking, which Nike Direct has had some problems, right, 154 00:08:41,559 --> 00:08:45,280 Speaker 2: this is their direct to consumer conduit not living up 155 00:08:45,320 --> 00:08:46,080 Speaker 2: the expectations. 156 00:08:46,120 --> 00:08:50,600 Speaker 6: Right, Nike spent the last several years basically shunning a 157 00:08:50,640 --> 00:08:53,640 Speaker 6: lot of its retail partners. So back in twenty twenty 158 00:08:53,679 --> 00:08:56,960 Speaker 6: one twenty two, it started to release them from we'll 159 00:08:57,000 --> 00:08:59,319 Speaker 6: do this ourselves now, yeah, well we got this, We'll 160 00:08:59,320 --> 00:09:02,400 Speaker 6: go through our own d DC channels. That's the Nike app, 161 00:09:02,440 --> 00:09:04,760 Speaker 6: the Sneakers app where you get the drops all the time, 162 00:09:04,960 --> 00:09:08,679 Speaker 6: and the Nike website. So they eliminated more than half 163 00:09:08,800 --> 00:09:12,880 Speaker 6: of their retail partners, including so and they reduced shoes 164 00:09:12,960 --> 00:09:14,720 Speaker 6: to some of the really really big ones, right, so 165 00:09:14,760 --> 00:09:17,600 Speaker 6: like foot Lockers, one of the most important partners for Nike, 166 00:09:17,679 --> 00:09:19,720 Speaker 6: and they reduced the number of shoes that were going 167 00:09:19,760 --> 00:09:23,480 Speaker 6: over to foot locker, and that paid off for a while, 168 00:09:24,040 --> 00:09:27,720 Speaker 6: but now they're reversing some of that and re engaging 169 00:09:27,760 --> 00:09:28,760 Speaker 6: with those retail partners. 170 00:09:28,840 --> 00:09:29,080 Speaker 5: Wow. 171 00:09:29,080 --> 00:09:33,120 Speaker 2: Another misque the digital sneaker division Artifact. Right, they bought 172 00:09:33,120 --> 00:09:37,439 Speaker 2: this company which doesn't sell sneakers, just sneakers in the metaverse, 173 00:09:37,480 --> 00:09:40,960 Speaker 2: the digital world, and said, what are we doing here? 174 00:09:41,400 --> 00:09:46,160 Speaker 6: Even though Elliott Hill, the new CEO, has not presented 175 00:09:46,160 --> 00:09:49,560 Speaker 6: a plan yet, he has given hints, right, and this 176 00:09:49,640 --> 00:09:52,839 Speaker 6: is one of those hints. When it comes to priorities 177 00:09:53,200 --> 00:09:55,440 Speaker 6: and what this new CEO's priority is going to be, 178 00:09:56,080 --> 00:09:58,520 Speaker 6: digital sneakers are not one of those priorities. So this 179 00:09:58,559 --> 00:10:00,760 Speaker 6: is a company that they bought a few years ago 180 00:10:01,360 --> 00:10:05,560 Speaker 6: under the old regime that makes virtual shoes for the metaverse. 181 00:10:05,600 --> 00:10:07,920 Speaker 6: That was during the height of the non fungible token 182 00:10:08,000 --> 00:10:11,440 Speaker 6: kind of thing that we had got the craze that 183 00:10:11,520 --> 00:10:13,880 Speaker 6: was going on back in twenty twenty one, and so 184 00:10:14,000 --> 00:10:16,640 Speaker 6: they're winding that down now. Another thing that they're doing 185 00:10:16,920 --> 00:10:20,760 Speaker 6: is investing more in its outdoor business. So really quickly 186 00:10:20,840 --> 00:10:23,720 Speaker 6: upon he'll being named CEO, a Nike sent a memo 187 00:10:23,760 --> 00:10:26,440 Speaker 6: internally and said, we really want to invest in ACG 188 00:10:26,600 --> 00:10:30,000 Speaker 6: it's called all Conditions gear. It's their outdoor business. So 189 00:10:30,000 --> 00:10:31,440 Speaker 6: that's something they want to push going forward. 190 00:10:31,600 --> 00:10:34,079 Speaker 2: Is that like more than just sneakers in apparel or. 191 00:10:33,880 --> 00:10:38,800 Speaker 6: It's sneakers, it's apparel, it's outerwear, it's hiking things, camping, 192 00:10:39,040 --> 00:10:40,320 Speaker 6: those kinds of outdoor products. 193 00:10:41,040 --> 00:10:43,760 Speaker 2: Now, a lot of Americans are still spending, but lower 194 00:10:43,800 --> 00:10:46,680 Speaker 2: way journers have had to pull back on their especially 195 00:10:46,720 --> 00:10:49,719 Speaker 2: discretionary spending. We saw lower sales growth. That's some big 196 00:10:49,800 --> 00:10:53,240 Speaker 2: chains like you mentioned, foot Locker, Target, Coals, Dick Sporting 197 00:10:53,240 --> 00:10:56,319 Speaker 2: Goods did okay back to school, But do you think 198 00:10:56,360 --> 00:10:59,040 Speaker 2: we'll see that slow down reflected in Nike's sales for 199 00:10:59,080 --> 00:10:59,840 Speaker 2: the second quarter. 200 00:11:00,400 --> 00:11:02,680 Speaker 6: Yeah, I think we will see that slow down in 201 00:11:02,760 --> 00:11:04,840 Speaker 6: Nike sales. And we're we're I mean, we're seeing it 202 00:11:04,840 --> 00:11:08,000 Speaker 6: across the board right now. The gap between back to 203 00:11:08,040 --> 00:11:12,840 Speaker 6: school and holidays seemed problematic for a lot of retailers, 204 00:11:12,960 --> 00:11:16,160 Speaker 6: even Dix Sporting Goods, which had done quite well last quarter. 205 00:11:16,480 --> 00:11:21,679 Speaker 6: Early takes on Thanksgiving week have been fairly strong. So 206 00:11:22,360 --> 00:11:26,880 Speaker 6: it's that it's that shortened selling time between Thanksgiving through 207 00:11:28,240 --> 00:11:32,760 Speaker 6: Christmas that we're all focused on days shorter than normal. 208 00:11:32,600 --> 00:11:36,600 Speaker 2: Shorter, but indications already that this Christmas season might be 209 00:11:37,040 --> 00:11:37,840 Speaker 2: looking good. 210 00:11:37,840 --> 00:11:42,080 Speaker 6: Might good, good enough? Maybe good under the circumstances. 211 00:11:42,080 --> 00:11:45,560 Speaker 2: Well, we bashed Nike a little bit, but let's talk 212 00:11:45,600 --> 00:11:47,560 Speaker 2: about some of the good things that they have going 213 00:11:47,600 --> 00:11:50,520 Speaker 2: for him. Very recently, they just extent a long term 214 00:11:50,640 --> 00:11:55,440 Speaker 2: partnership with the NFL exclusive supplier of uniforms, practice, jersey, sidelines, 215 00:11:55,440 --> 00:11:59,760 Speaker 2: apparel all thirty two teams. Similarly the NBA, the WNBA, 216 00:11:59,840 --> 00:12:04,280 Speaker 2: the So these must be tremendous showcases for Nike gear 217 00:12:04,320 --> 00:12:05,280 Speaker 2: and apparel. 218 00:12:05,040 --> 00:12:09,400 Speaker 6: Huge deals, and it provides this long term stability at 219 00:12:09,400 --> 00:12:11,120 Speaker 6: a time where there's not a lot of long term 220 00:12:11,120 --> 00:12:14,199 Speaker 6: stability at Nike. There's so many moving parts, there's so 221 00:12:14,280 --> 00:12:18,240 Speaker 6: much going on. The strategy is changing as we speak. 222 00:12:18,559 --> 00:12:22,000 Speaker 6: But these are huge deals for Nike. Right The NFL 223 00:12:22,120 --> 00:12:24,280 Speaker 6: is so important, and I don't think they were ever 224 00:12:24,280 --> 00:12:26,360 Speaker 6: going to lose that contract. Like they had to extend it, 225 00:12:26,440 --> 00:12:28,800 Speaker 6: had to keep it. It's through twenty thirty eight, so. 226 00:12:28,800 --> 00:12:31,040 Speaker 2: Especially with Taylor Swift now attending. 227 00:12:30,679 --> 00:12:35,920 Speaker 6: Games, especially with Taylor Swift the Kansas City Chief games, absolutely. 228 00:12:35,400 --> 00:12:38,360 Speaker 2: Well, it's big. Nike's Q two earnings out this Thursday 229 00:12:38,400 --> 00:12:42,199 Speaker 2: are thanks to Kim Bassine, Bloomberg senior reporter covering sportswear. 230 00:12:42,360 --> 00:12:44,400 Speaker 2: Coming up on Bloomberg day Break weekend, we look at 231 00:12:44,440 --> 00:12:47,680 Speaker 2: this week's Bank of England decision and just how quickly 232 00:12:47,800 --> 00:12:49,200 Speaker 2: rates may come down. 233 00:12:49,200 --> 00:12:49,440 Speaker 1: There. 234 00:12:49,760 --> 00:13:03,520 Speaker 2: I'm Tom Busby and this is Bloomberg. This is Bloomberg 235 00:13:03,559 --> 00:13:05,760 Speaker 2: day Break Weekend, our global log ahead at the top 236 00:13:05,800 --> 00:13:08,800 Speaker 2: stories for investors in the coming week. I'm Tom Busby 237 00:13:08,840 --> 00:13:11,280 Speaker 2: in New York. Up later in the program we get 238 00:13:11,280 --> 00:13:14,240 Speaker 2: the latest readings on the Chinese economy. But first, the 239 00:13:14,280 --> 00:13:17,880 Speaker 2: Bank of England can cut borrowing costs five more times 240 00:13:17,920 --> 00:13:20,079 Speaker 2: to a rate of three point five percent before running 241 00:13:20,080 --> 00:13:23,600 Speaker 2: the risk of overheating the economy and reigniting inflation. That's 242 00:13:23,640 --> 00:13:26,280 Speaker 2: the assessment of Bloomberg Economics, just ahead of the Central 243 00:13:26,280 --> 00:13:29,600 Speaker 2: Bank's final meeting of twenty twenty four. So where does 244 00:13:29,600 --> 00:13:33,120 Speaker 2: the Central Bank's neutral rate line after policymakers reverse the 245 00:13:33,160 --> 00:13:37,080 Speaker 2: most aggressive rate hiking cycle in decades. Well, for more, 246 00:13:37,120 --> 00:13:39,000 Speaker 2: we'll go to London and bring in Bloomberg day Break. 247 00:13:39,000 --> 00:13:41,319 Speaker 2: Europe banker Caroline Hepgar. 248 00:13:41,520 --> 00:13:45,640 Speaker 1: Tom Andrew Bailey has signaled that policymakers still believe four 249 00:13:45,760 --> 00:13:49,480 Speaker 1: quarter point rate cuts next year is the most likely 250 00:13:49,559 --> 00:13:54,160 Speaker 1: scenario for the Bank of England. Policymaker Swarti Dingra recently 251 00:13:54,200 --> 00:13:57,199 Speaker 1: told Bloomberg that high interest rates in the UK are 252 00:13:57,200 --> 00:14:01,240 Speaker 1: bearing down too heavily on the economy. The most duvish 253 00:14:01,440 --> 00:14:05,120 Speaker 1: NBC member, she says that that's why the bank should 254 00:14:05,200 --> 00:14:10,000 Speaker 1: be easing policy more. But Bloomberg Economics analysis suggests that 255 00:14:10,040 --> 00:14:14,520 Speaker 1: policymakers may have less room than previously thought to cut 256 00:14:14,600 --> 00:14:18,800 Speaker 1: interest rates before reigniting the flames of inflation once again. 257 00:14:19,200 --> 00:14:22,600 Speaker 1: As central banks around the world continue cutting rates next year, 258 00:14:23,040 --> 00:14:26,680 Speaker 1: debate about the end point for monetary policy and the 259 00:14:26,760 --> 00:14:30,640 Speaker 1: easing cycle is likely to intensify. That's the verdict of 260 00:14:30,640 --> 00:14:35,960 Speaker 1: Bloomberg's chief UK economist Dan Hanson. Central to the dilemma, though, 261 00:14:36,160 --> 00:14:41,280 Speaker 1: is gauging where monetary policy neither restrains nor stimulates growth. 262 00:14:41,480 --> 00:14:45,160 Speaker 1: That's known as the neutral rate. It's increasingly key for 263 00:14:45,240 --> 00:14:48,800 Speaker 1: policymakers as they try to deliver a soft landing from 264 00:14:48,840 --> 00:14:52,280 Speaker 1: the inflation shock of twenty twenty two and twenty twenty three. 265 00:14:52,840 --> 00:14:55,520 Speaker 1: It's something Andrew Bailey has refused to be drawn on, 266 00:14:55,720 --> 00:14:58,360 Speaker 1: other than to say that it will be higher than 267 00:14:58,440 --> 00:15:00,880 Speaker 1: the near zero level of rap that we saw from 268 00:15:00,960 --> 00:15:05,360 Speaker 1: two thousand and nine to twenty twenty one. Despite the 269 00:15:05,360 --> 00:15:08,520 Speaker 1: governor's silence on the issue, It's a figure that the 270 00:15:08,600 --> 00:15:12,880 Speaker 1: market is watching closely too. Nicola my portfolio manager and 271 00:15:12,920 --> 00:15:17,000 Speaker 1: sovereign credit analyst at PIMCO, has told Bloomberg that the 272 00:15:17,080 --> 00:15:20,720 Speaker 1: implications of the neutral rate are key for the guilt market. 273 00:15:21,560 --> 00:15:24,280 Speaker 8: Look, we like guilts, you know, we've liked them for 274 00:15:24,320 --> 00:15:27,200 Speaker 8: a while. If you look at what's priced in the market, 275 00:15:27,240 --> 00:15:29,600 Speaker 8: you have a terminal rate of three point fifty or so, 276 00:15:29,680 --> 00:15:32,680 Speaker 8: which is broadly aligned with the FED. That doesn't really 277 00:15:32,720 --> 00:15:34,640 Speaker 8: make sense to me for an economy that has been 278 00:15:34,640 --> 00:15:37,640 Speaker 8: a lot weaker than the US economy, where equilibri of 279 00:15:37,680 --> 00:15:40,360 Speaker 8: interest rates are most likely lowered, given the fact that 280 00:15:40,440 --> 00:15:43,200 Speaker 8: trend growth in the UKs is quite a bit lower 281 00:15:43,280 --> 00:15:44,080 Speaker 8: than in the US. 282 00:15:45,200 --> 00:15:48,280 Speaker 7: So I think guilts are going to perform now. 283 00:15:48,800 --> 00:15:50,600 Speaker 8: I think that it's been a bit of a frustrating 284 00:15:50,680 --> 00:15:53,760 Speaker 8: environment because we've been we and a lot of people 285 00:15:53,760 --> 00:15:55,840 Speaker 8: in the market have been betting on the guilt out 286 00:15:55,840 --> 00:15:57,320 Speaker 8: performance recently. 287 00:15:57,360 --> 00:15:58,400 Speaker 7: It hasn't worked yet. 288 00:15:59,160 --> 00:16:02,120 Speaker 8: I think the market still, you know, watching the inflation 289 00:16:02,280 --> 00:16:05,760 Speaker 8: data carefully to see if this this inflation is actually happening, 290 00:16:06,560 --> 00:16:08,400 Speaker 8: but I do expect it to happen, and I think 291 00:16:08,440 --> 00:16:08,880 Speaker 8: this is a. 292 00:16:08,840 --> 00:16:10,480 Speaker 7: Trade that will do well. 293 00:16:10,520 --> 00:16:12,600 Speaker 8: Maybe we need a bit of patience in the near term, 294 00:16:12,600 --> 00:16:14,560 Speaker 8: but I think guilds are attractive here. 295 00:16:14,720 --> 00:16:18,320 Speaker 1: Yeah, absolutely, pretty big economics things. Growth next year is 296 00:16:18,320 --> 00:16:20,320 Speaker 1: only going to come in about one and a half 297 00:16:20,320 --> 00:16:23,520 Speaker 1: percent for the UK. Have all the easy gains been 298 00:16:23,680 --> 00:16:26,280 Speaker 1: made on French oats. 299 00:16:26,560 --> 00:16:26,800 Speaker 7: Yeah. 300 00:16:26,800 --> 00:16:29,520 Speaker 8: Look, I think if you look at oats, you know 301 00:16:29,560 --> 00:16:32,080 Speaker 8: they're trading about eighty basis points over boons, a bit 302 00:16:32,120 --> 00:16:34,960 Speaker 8: wider than Spain. I think it's a reasonable level that 303 00:16:35,040 --> 00:16:38,520 Speaker 8: will probably hold here in that you know you're going 304 00:16:38,600 --> 00:16:42,160 Speaker 8: to have some fiscal slippage from from a starting point 305 00:16:42,200 --> 00:16:44,280 Speaker 8: which is a pretty wide deficit. You know, it was 306 00:16:44,320 --> 00:16:47,680 Speaker 8: six percent. You know there's probably going to be about 307 00:16:47,680 --> 00:16:50,120 Speaker 8: six percent this year. It should fall a bit next year, 308 00:16:50,160 --> 00:16:53,920 Speaker 8: but not much. And I think political uncertainty and volatility 309 00:16:54,000 --> 00:16:56,520 Speaker 8: will remain elevated. Even if you have a government, it's 310 00:16:56,560 --> 00:16:59,280 Speaker 8: going to be a hung parliament still, so I don't 311 00:16:59,320 --> 00:17:02,040 Speaker 8: see much of a titaning going forward. 312 00:17:02,760 --> 00:17:04,760 Speaker 7: So we're pretty neutral here on French spreads. 313 00:17:04,800 --> 00:17:07,120 Speaker 8: I don't think this is a source of a sovereign 314 00:17:07,160 --> 00:17:10,479 Speaker 8: crisis in the year zone, but I think France is 315 00:17:10,520 --> 00:17:12,960 Speaker 8: probably going to settle it at a higher level versus 316 00:17:12,960 --> 00:17:15,240 Speaker 8: compared to the past when it comes to spreads. 317 00:17:15,960 --> 00:17:18,320 Speaker 7: Looking towards next years. Got the election in Germany as well. 318 00:17:18,359 --> 00:17:20,840 Speaker 8: I mean, do you see a significant risk to the 319 00:17:21,359 --> 00:17:25,200 Speaker 8: German outlook from that election? Not particularly, I mean I 320 00:17:25,680 --> 00:17:28,880 Speaker 8: think that Germany it looks not great again with I mean, 321 00:17:28,880 --> 00:17:33,000 Speaker 8: the German economy is struggling, there is no doubt, and 322 00:17:33,240 --> 00:17:35,560 Speaker 8: I do think, if anything, there are some hopes that 323 00:17:35,600 --> 00:17:40,399 Speaker 8: this government will engineer as somewhat easier fiscal stance. You know. 324 00:17:40,480 --> 00:17:43,880 Speaker 8: The hope is that they're going to revise the fiscal 325 00:17:43,920 --> 00:17:48,080 Speaker 8: straight jacket that that prevents any physical spending in Germany, 326 00:17:48,119 --> 00:17:50,200 Speaker 8: the so called constitutional death break rule. 327 00:17:51,560 --> 00:17:53,080 Speaker 7: You know, we see some potential for that. 328 00:17:53,119 --> 00:17:56,520 Speaker 8: I think that would be positive for the German economy 329 00:17:56,520 --> 00:17:57,639 Speaker 8: and for the region as a whole. 330 00:17:58,200 --> 00:17:59,000 Speaker 7: But I would also. 331 00:17:58,920 --> 00:18:04,119 Speaker 8: Temper expectations because I think that the physcal philosophy in 332 00:18:04,160 --> 00:18:07,040 Speaker 8: Germany remains a pretty harkish one, a pretty conservative one. 333 00:18:07,440 --> 00:18:10,240 Speaker 8: So while whilst some amusing as possible, i't I wouldn't 334 00:18:10,920 --> 00:18:12,639 Speaker 8: bet on a huge change here. 335 00:18:13,359 --> 00:18:17,000 Speaker 1: That was Nicola my portfolio manager and solteign Credit Alice 336 00:18:17,040 --> 00:18:21,720 Speaker 1: at PIMCO speaking to Stephen Coroll and I on Bloomberg Radio. So, 337 00:18:22,080 --> 00:18:24,600 Speaker 1: just how much easing can the Bank of England fit 338 00:18:24,760 --> 00:18:28,800 Speaker 1: in before reaching that all important terminal rate. It's something 339 00:18:28,840 --> 00:18:32,320 Speaker 1: I've been discussing with Bloomberg's chief UK economist Dan Hanson. 340 00:18:33,240 --> 00:18:36,760 Speaker 9: At the moment, UK is heading for fingers crossed, a 341 00:18:36,880 --> 00:18:41,480 Speaker 9: softish landing, and that's sort of given what we've been through, 342 00:18:41,760 --> 00:18:45,920 Speaker 9: that's obviously a really positive story and to sort of 343 00:18:45,960 --> 00:18:49,560 Speaker 9: deliver it, it's in sort of absent any other shocks. 344 00:18:49,560 --> 00:18:51,080 Speaker 9: It's in the hands of the Bank of England in 345 00:18:51,119 --> 00:18:52,920 Speaker 9: the sense that it needs to bring interest rates down 346 00:18:52,960 --> 00:18:56,879 Speaker 9: by enough such that it doesn't strangle the recovery and 347 00:18:56,960 --> 00:18:59,639 Speaker 9: strangle the economy, but not by too much such that 348 00:18:59,760 --> 00:19:04,040 Speaker 9: it reignites inflation. As you said, So that's what economists 349 00:19:04,080 --> 00:19:06,240 Speaker 9: call this concept of the neutral raid. It's it's the 350 00:19:06,320 --> 00:19:09,879 Speaker 9: rate of interest, level of interest rates that neither speeds 351 00:19:09,960 --> 00:19:12,359 Speaker 9: up nor slows down the economy and is consistent with 352 00:19:13,240 --> 00:19:16,400 Speaker 9: inflation at two percent and the sort of economy humming 353 00:19:16,440 --> 00:19:17,800 Speaker 9: along at full employment. 354 00:19:18,640 --> 00:19:19,600 Speaker 7: So we've taken a stab. 355 00:19:19,760 --> 00:19:21,920 Speaker 9: No one knows what it is and it moves through 356 00:19:21,960 --> 00:19:24,240 Speaker 9: the passage of time, and it's very uncertain, but we've 357 00:19:24,240 --> 00:19:27,399 Speaker 9: taken a stab at estimating it, and we think all 358 00:19:27,480 --> 00:19:29,440 Speaker 9: of these things, as I say, they are uncertain. We've 359 00:19:29,560 --> 00:19:31,919 Speaker 9: put out a range of between three and four percent, 360 00:19:32,320 --> 00:19:35,080 Speaker 9: and I think coming into the tightening cycle, people would 361 00:19:35,080 --> 00:19:37,920 Speaker 9: have said that's very high. The neutral rates probably quite 362 00:19:37,920 --> 00:19:40,120 Speaker 9: a lot lower than that. I think over the past 363 00:19:40,200 --> 00:19:43,720 Speaker 9: two years we've found out it's probably higher than people thought, 364 00:19:43,760 --> 00:19:46,160 Speaker 9: and that's sort of the basis of why we sort 365 00:19:46,160 --> 00:19:46,920 Speaker 9: of took a stab. 366 00:19:46,720 --> 00:19:47,240 Speaker 7: At this question. 367 00:19:47,400 --> 00:19:49,760 Speaker 9: And we we think over the course of the coming 368 00:19:49,840 --> 00:19:52,359 Speaker 9: year that the banking and world cup rates further down 369 00:19:52,440 --> 00:19:54,440 Speaker 9: to three point seventy five percent by the end of 370 00:19:54,480 --> 00:19:57,000 Speaker 9: the year. But the question, I think is how much 371 00:19:57,040 --> 00:19:59,440 Speaker 9: further they can go from there, and our estimates suggests 372 00:19:59,680 --> 00:20:01,720 Speaker 9: not very far. And I think actually in the second 373 00:20:01,760 --> 00:20:03,959 Speaker 9: half of the year, if the economy continues to hold up, 374 00:20:04,600 --> 00:20:06,840 Speaker 9: there'll be a question amongst policymakers because there'll be a 375 00:20:06,920 --> 00:20:09,320 Speaker 9: divergence of views there as well, there'll be a question 376 00:20:09,359 --> 00:20:11,760 Speaker 9: about how much further interest rates fall as we move 377 00:20:11,800 --> 00:20:13,760 Speaker 9: into the second half of the year. Conditioned on the 378 00:20:13,840 --> 00:20:16,120 Speaker 9: idea that the economy continues to sort of hum along 379 00:20:16,160 --> 00:20:16,719 Speaker 9: as it has been. 380 00:20:18,960 --> 00:20:22,040 Speaker 1: That's interesting, I suppose why not. That is all to 381 00:20:22,119 --> 00:20:24,840 Speaker 1: do with inflation, surely, and we've also put out them 382 00:20:25,160 --> 00:20:28,399 Speaker 1: You've put up full cast for economic growth in the 383 00:20:28,520 --> 00:20:33,520 Speaker 1: UK actually reasonably robust for next year by British standards. 384 00:20:35,200 --> 00:20:37,800 Speaker 1: I'll add that caveat. But it's also all to do 385 00:20:38,000 --> 00:20:40,640 Speaker 1: with inflation and the stickiness of inflation in the UK. 386 00:20:41,640 --> 00:20:43,520 Speaker 9: Yeah, it is, And so the space to sort of 387 00:20:43,560 --> 00:20:48,280 Speaker 9: bring interest rates down really quickly is limited because of 388 00:20:48,320 --> 00:20:50,840 Speaker 9: the inflation picture over the course of the next year, 389 00:20:50,960 --> 00:20:53,040 Speaker 9: which is that we think at least that inflation will 390 00:20:53,040 --> 00:20:56,080 Speaker 9: remain above two percent, So that limits the scope to 391 00:20:56,200 --> 00:20:59,000 Speaker 9: bring interest rates down really quickly. At the same time, 392 00:20:59,320 --> 00:21:01,960 Speaker 9: we think the economy will grow a little bit faster 393 00:21:02,040 --> 00:21:03,960 Speaker 9: than it did this year, so we think the economy 394 00:21:03,960 --> 00:21:06,920 Speaker 9: will grow in annual terms point nine percent this year, 395 00:21:07,040 --> 00:21:09,080 Speaker 9: next year one and a half percent. A lot of 396 00:21:09,160 --> 00:21:11,719 Speaker 9: that is to do with the fiscal loosening in the budget, 397 00:21:12,600 --> 00:21:14,640 Speaker 9: but actually the reason why inflation is going to remain 398 00:21:14,680 --> 00:21:16,840 Speaker 9: above target is also because of that fiscal loosening in 399 00:21:16,880 --> 00:21:18,800 Speaker 9: the budget and some of the policies that were in it. 400 00:21:19,040 --> 00:21:23,800 Speaker 9: So there is this, there is this path down. I 401 00:21:23,880 --> 00:21:26,600 Speaker 9: think it is going to be gradual, and as I 402 00:21:26,680 --> 00:21:29,880 Speaker 9: say in the second half of I think the coming year, 403 00:21:30,160 --> 00:21:32,680 Speaker 9: the question is going to be where do we stop 404 00:21:32,720 --> 00:21:35,119 Speaker 9: absent a shock hitting the economy where the bank has 405 00:21:35,160 --> 00:21:37,760 Speaker 9: to rethink everything. But I think if we continue on 406 00:21:37,840 --> 00:21:41,320 Speaker 9: the current path, you know, there is this question to 407 00:21:41,400 --> 00:21:44,359 Speaker 9: say in the second half about where the stopping point is. 408 00:21:45,240 --> 00:21:49,000 Speaker 1: How much does the cycle that is seeing rate cuts 409 00:21:49,240 --> 00:21:52,879 Speaker 1: of course in the US and Europe effect what is 410 00:21:52,920 --> 00:21:53,800 Speaker 1: happening here in the UK. 411 00:21:54,560 --> 00:21:57,920 Speaker 9: It's definitely important and the traditional thing that the traditional 412 00:21:58,000 --> 00:21:59,960 Speaker 9: channel that people talk about is the exchange rate channel, 413 00:22:00,200 --> 00:22:03,080 Speaker 9: but also particularly in the US, the UK is a 414 00:22:03,440 --> 00:22:05,960 Speaker 9: price taker in financial market, so what happens in the 415 00:22:06,080 --> 00:22:10,840 Speaker 9: US affects financial conditions here enormously. So it does matter 416 00:22:12,440 --> 00:22:15,560 Speaker 9: historically though you look at the cycles of the FED 417 00:22:15,600 --> 00:22:17,600 Speaker 9: and the Bank of England and they do diverge, and 418 00:22:17,720 --> 00:22:22,000 Speaker 9: they can diverge quite dramatically. But I think for both 419 00:22:22,000 --> 00:22:24,240 Speaker 9: at least, if you're thinking about the US and the 420 00:22:24,400 --> 00:22:28,720 Speaker 9: UK economy, sort of broadly, the base case, the consensus 421 00:22:28,760 --> 00:22:31,439 Speaker 9: at least is for a softish landing on both sides, 422 00:22:32,040 --> 00:22:35,240 Speaker 9: Inflation on both sides of the Atlantic is sticky. There's 423 00:22:35,240 --> 00:22:37,800 Speaker 9: obviously a bit of a difference with Europe and the 424 00:22:37,840 --> 00:22:42,919 Speaker 9: New Area and the ECB interest rates. Our team think 425 00:22:42,960 --> 00:22:44,520 Speaker 9: that we're going to go to neutral there. I think 426 00:22:44,560 --> 00:22:47,560 Speaker 9: the market thinks that, which is on our estimates two percent, 427 00:22:47,680 --> 00:22:49,879 Speaker 9: the market has rates going a little bit lower there. 428 00:22:50,320 --> 00:22:53,879 Speaker 9: I think there are concerns about the economy in the 429 00:22:53,920 --> 00:22:55,480 Speaker 9: EU Area a little bit more than there are in 430 00:22:55,560 --> 00:22:57,960 Speaker 9: the US and the UK at the moment. But I 431 00:22:58,040 --> 00:23:01,320 Speaker 9: don't think Obviously central banks look at each other and 432 00:23:01,400 --> 00:23:05,000 Speaker 9: see what they're doing, but I don't think it's going 433 00:23:05,040 --> 00:23:07,200 Speaker 9: to stop the Bank of England doing what it thinks 434 00:23:07,320 --> 00:23:09,960 Speaker 9: is necessary for the for the UK economy and for 435 00:23:10,040 --> 00:23:13,560 Speaker 9: the UK economy, the story has been relatively as you mentioned, 436 00:23:13,600 --> 00:23:16,480 Speaker 9: they're relatively sluggish growth but also sticky inflation, so that 437 00:23:16,600 --> 00:23:19,399 Speaker 9: calls for interest being relatively cautious about how far you 438 00:23:19,440 --> 00:23:20,320 Speaker 9: lower interest rates. 439 00:23:21,520 --> 00:23:24,159 Speaker 1: In recent days we've heard from banking and policy makers, 440 00:23:24,240 --> 00:23:27,320 Speaker 1: including Swatty. Dinger has spoken to Big Television. What do 441 00:23:27,480 --> 00:23:29,919 Speaker 1: you expect to hear from the Bank of England at 442 00:23:29,960 --> 00:23:33,040 Speaker 1: their upcoming meeting? What do you think they might talk about? 443 00:23:33,560 --> 00:23:35,400 Speaker 9: So I think this one is I mean, the market 444 00:23:35,480 --> 00:23:39,919 Speaker 9: is pricing zero in terms of moves, there's no probability 445 00:23:39,960 --> 00:23:44,639 Speaker 9: of any move, so it's and we only get the minutes. 446 00:23:44,920 --> 00:23:46,760 Speaker 9: So I think the thing that they'll focus on is 447 00:23:46,840 --> 00:23:49,960 Speaker 9: the national the rise in employer national insurance and what 448 00:23:50,119 --> 00:23:52,560 Speaker 9: that could potentially mean for the outlook. That's the thing 449 00:23:52,640 --> 00:23:55,359 Speaker 9: that Atlist Andrew Bailey has said is the biggest uncertainty, 450 00:23:56,119 --> 00:23:58,199 Speaker 9: at least in the near term about the economic outlook 451 00:23:58,240 --> 00:24:01,160 Speaker 9: and one of the reasons why they're they're moving gradually. 452 00:24:01,280 --> 00:24:04,080 Speaker 9: So I think we've had little bits of evidence, early 453 00:24:04,160 --> 00:24:06,800 Speaker 9: evidence from their decision maker panel, from the report on 454 00:24:07,000 --> 00:24:09,680 Speaker 9: Jobs about how firms might be adjusting, and obviously we're 455 00:24:09,720 --> 00:24:13,840 Speaker 9: getting company earnings reports as well that are telling us 456 00:24:13,880 --> 00:24:16,399 Speaker 9: about how they're going to be adjusting to these to 457 00:24:16,840 --> 00:24:19,119 Speaker 9: the rise in labor costs. So I think that's going 458 00:24:19,200 --> 00:24:21,120 Speaker 9: to be the focus. I don't think they'll go near 459 00:24:21,280 --> 00:24:24,000 Speaker 9: sort of for example, the question about tariffs and Trump. 460 00:24:24,119 --> 00:24:26,320 Speaker 9: There's no need for them to sort of step into 461 00:24:26,400 --> 00:24:30,679 Speaker 9: that step into that arena yet, so I think it's 462 00:24:30,760 --> 00:24:32,119 Speaker 9: just going to be very much steady as you go. 463 00:24:32,400 --> 00:24:34,719 Speaker 9: This is you know, this is what we said out 464 00:24:34,760 --> 00:24:36,479 Speaker 9: in November, is that We're going to be cutting gradually 465 00:24:36,560 --> 00:24:38,160 Speaker 9: and I think that's going to be the story here 466 00:24:38,200 --> 00:24:39,080 Speaker 9: as well for December. 467 00:24:39,440 --> 00:24:42,760 Speaker 1: My thanks as ever to Bloomberg's Chief UK economist Dan Hanson. Well, 468 00:24:42,800 --> 00:24:45,879 Speaker 1: we'll have full coverage of the final Bank of England 469 00:24:46,240 --> 00:24:50,560 Speaker 1: monetary policy decision, the meeting and the press conference on Thursday, 470 00:24:50,600 --> 00:24:53,560 Speaker 1: the nineteenth of December right here on Bloomberg. I'm Caroline 471 00:24:53,600 --> 00:24:56,160 Speaker 1: Hepget in London and you can catch us every weekday 472 00:24:56,240 --> 00:24:58,960 Speaker 1: morning for Bloomberg Daybreak. You at beginning at six am 473 00:24:59,040 --> 00:25:01,119 Speaker 1: in London. That's one am on Wall Street. 474 00:25:01,320 --> 00:25:04,720 Speaker 2: Tom, Thanks Caroline, and coming up on Bloomberg day Break Weekend, 475 00:25:04,760 --> 00:25:08,480 Speaker 2: the latest data on China's economy. I'm Tom Busby and 476 00:25:08,600 --> 00:25:22,280 Speaker 2: this is Bloomberg. This is Bloomberg day Break Weekend, our 477 00:25:22,320 --> 00:25:24,560 Speaker 2: global look ahead at the top stories for investors in 478 00:25:24,600 --> 00:25:27,520 Speaker 2: the coming week. I'm Tom Busby in New York. This 479 00:25:27,640 --> 00:25:29,399 Speaker 2: week we get the latest readings on the health of 480 00:25:29,520 --> 00:25:32,520 Speaker 2: China's economy, three years after a collapse in its housing 481 00:25:32,600 --> 00:25:36,400 Speaker 2: market led to a nationwide financial crisis. For more, let's 482 00:25:36,400 --> 00:25:39,879 Speaker 2: go to Bloomberg's Doug Chrisner, host of the Daybreak Asia podcast. 483 00:25:40,280 --> 00:25:43,520 Speaker 3: Tom the key numbers in China's monthly activity data will 484 00:25:43,680 --> 00:25:47,720 Speaker 3: clearly be retail sales and industrial production. But remember these 485 00:25:47,800 --> 00:25:51,200 Speaker 3: readings will be for November, and perhaps the more important 486 00:25:51,240 --> 00:25:54,920 Speaker 3: story on the Chinese economy has been the stimulus recently 487 00:25:55,080 --> 00:25:58,720 Speaker 3: teased after the Politbureau meeting. We'll take a closer look 488 00:25:58,800 --> 00:26:03,320 Speaker 3: right now with Bloomberg's Tia Dmitrieva. Katya covers Asia Economics 489 00:26:03,400 --> 00:26:06,000 Speaker 3: from our bureau in Hong Kong. Thanks for making time 490 00:26:06,080 --> 00:26:08,639 Speaker 3: to chat with me. We'll get to the stimulus story 491 00:26:08,720 --> 00:26:10,840 Speaker 3: in a moment. I promise you can. We begin with 492 00:26:10,920 --> 00:26:14,399 Speaker 3: a big picture on Chinese economic activity though for the 493 00:26:14,480 --> 00:26:17,560 Speaker 3: month of November. Can you help me understand what we're 494 00:26:17,760 --> 00:26:19,159 Speaker 3: likely to see in these numbers? 495 00:26:20,280 --> 00:26:23,920 Speaker 10: Yes, and it's going to be a very good snapshot 496 00:26:24,119 --> 00:26:25,600 Speaker 10: of most of the economy. 497 00:26:25,720 --> 00:26:25,840 Speaker 4: You know. 498 00:26:25,960 --> 00:26:28,960 Speaker 10: This tends to happen every month or so. China will 499 00:26:29,040 --> 00:26:33,760 Speaker 10: release this slew of data. So we're getting across the 500 00:26:34,240 --> 00:26:37,679 Speaker 10: across the country. We're getting new home prices, industrial production, 501 00:26:37,800 --> 00:26:41,520 Speaker 10: retail sales that you had mentioned, also investment numbers and 502 00:26:42,119 --> 00:26:46,200 Speaker 10: jobless rate. And because that's not enough, we might also 503 00:26:46,280 --> 00:26:48,800 Speaker 10: get the policy loan rate. Starting that day, there's usually 504 00:26:48,840 --> 00:26:51,480 Speaker 10: about a couple day like a week window where we 505 00:26:51,600 --> 00:26:54,680 Speaker 10: might get that. It's also all coming around the same time, 506 00:26:55,040 --> 00:26:59,159 Speaker 10: around ten am Monday here, and it's all for November. 507 00:26:59,320 --> 00:27:02,400 Speaker 10: And the interesting part about this data is it'll capture 508 00:27:02,960 --> 00:27:06,440 Speaker 10: what have essentially been two months of stimulus. So we 509 00:27:06,600 --> 00:27:11,600 Speaker 10: had in September. The stimulus was really focused on monetary 510 00:27:11,680 --> 00:27:16,160 Speaker 10: easing support for the real estate sector across the board, 511 00:27:16,280 --> 00:27:18,639 Speaker 10: and then for households too, because we saw that mortgage 512 00:27:18,680 --> 00:27:22,000 Speaker 10: rate cut for outstanding mortgages to try to alleviate and 513 00:27:22,240 --> 00:27:25,639 Speaker 10: maybe open up some spending for consumers. And then in 514 00:27:25,720 --> 00:27:29,080 Speaker 10: October that was the PBOC, the People's Bank of China, 515 00:27:29,480 --> 00:27:32,240 Speaker 10: and they had announced measures to boost capital markets, and 516 00:27:32,320 --> 00:27:34,920 Speaker 10: so we saw markets very excited and happy about that. 517 00:27:35,480 --> 00:27:38,040 Speaker 10: So this is the first full month where that will 518 00:27:38,400 --> 00:27:43,640 Speaker 10: be shown. But economists aren't very optimistic if you look 519 00:27:43,800 --> 00:27:47,720 Speaker 10: at the data. We do surveys with economists regularly, and 520 00:27:48,040 --> 00:27:52,359 Speaker 10: the word I would use is stabilization. So not seeing 521 00:27:52,720 --> 00:27:56,159 Speaker 10: anything going into the red. I mean new home sales, 522 00:27:56,200 --> 00:27:59,879 Speaker 10: that's a different bucket, but everything is just kind of 523 00:28:00,320 --> 00:28:02,200 Speaker 10: steady as she goes, with a little bit of a 524 00:28:02,280 --> 00:28:03,160 Speaker 10: tick up expected. 525 00:28:03,440 --> 00:28:05,800 Speaker 3: So these are these are what I would call hard 526 00:28:05,880 --> 00:28:08,399 Speaker 3: economic data points. But if you look at kind of 527 00:28:08,440 --> 00:28:11,720 Speaker 3: the softer economic data points, and I'm thinking in particular 528 00:28:11,920 --> 00:28:15,160 Speaker 3: of the PMI data from the month of November, sentiment 529 00:28:15,440 --> 00:28:19,639 Speaker 3: among the business community in China that was a little disappointing, 530 00:28:19,760 --> 00:28:20,720 Speaker 3: as I recall. 531 00:28:20,520 --> 00:28:24,720 Speaker 10: Right, yes it was, and so were exports, and so 532 00:28:25,040 --> 00:28:29,080 Speaker 10: that's sort of already painting this picture of an economy 533 00:28:29,240 --> 00:28:33,760 Speaker 10: that's still really struggling and why the stimulus was very 534 00:28:33,840 --> 00:28:37,000 Speaker 10: much necessary. But it's also kind of being used to 535 00:28:37,119 --> 00:28:39,720 Speaker 10: address the underlying structural issues and those are going to 536 00:28:39,800 --> 00:28:43,960 Speaker 10: keep coming through in the data. So across the board, 537 00:28:44,000 --> 00:28:47,240 Speaker 10: the economy is just kind of holding up, and we 538 00:28:47,520 --> 00:28:50,440 Speaker 10: might see, you know, there there are some areas where 539 00:28:50,440 --> 00:28:52,680 Speaker 10: we might see a tick up because of things like 540 00:28:52,800 --> 00:28:57,360 Speaker 10: the trade war spurring more production or people getting a 541 00:28:57,480 --> 00:28:59,600 Speaker 10: boost from you know, they're not paying as much on 542 00:28:59,640 --> 00:29:03,800 Speaker 10: their more so they might be spending more. But on 543 00:29:03,880 --> 00:29:05,800 Speaker 10: the labor market side of things, which is the other 544 00:29:05,880 --> 00:29:08,480 Speaker 10: part of the economy, we're not expecting a change in 545 00:29:08,520 --> 00:29:11,160 Speaker 10: the unemployment rate, which is expected to still be about 546 00:29:11,200 --> 00:29:15,680 Speaker 10: five percent. So so far it's just looking like, yeah, 547 00:29:15,720 --> 00:29:17,240 Speaker 10: it's just looking like a bit of a flat line. 548 00:29:17,360 --> 00:29:19,520 Speaker 3: So I promised it earlier, and I'm going to deliver 549 00:29:19,680 --> 00:29:22,680 Speaker 3: on the stimulus story next. We know the Chinese leaders 550 00:29:22,760 --> 00:29:25,960 Speaker 3: have been sending very clear signals on providing new measures. 551 00:29:26,320 --> 00:29:30,360 Speaker 3: We had the Pollit Bureau meeting recently and indications of 552 00:29:30,520 --> 00:29:34,160 Speaker 3: what I will call an unusually strong commitment. Is that fair. 553 00:29:34,280 --> 00:29:37,520 Speaker 3: I recently spoke with Stephanie Leung. She as the chief 554 00:29:37,560 --> 00:29:41,400 Speaker 3: investment officer at Stashaway and Singapore, and I asked her 555 00:29:41,600 --> 00:29:46,040 Speaker 3: about the messaging as it relates to revitalizing domestic demand. 556 00:29:46,120 --> 00:29:47,360 Speaker 3: Here's what she had to say. 557 00:29:47,680 --> 00:29:50,440 Speaker 11: I think the key takeaway is that Number one, the 558 00:29:50,520 --> 00:29:54,640 Speaker 11: government seems to be quite resolute in terms of their 559 00:29:54,680 --> 00:29:58,160 Speaker 11: will to continue to be supportive of the economy. Indeed, 560 00:29:58,200 --> 00:30:01,160 Speaker 11: if you look at the language, the first time in 561 00:30:01,200 --> 00:30:03,720 Speaker 11: the past few years, they actually replace some of the 562 00:30:03,800 --> 00:30:08,920 Speaker 11: more restrictive language with words I prudentially manage monetary policy 563 00:30:09,080 --> 00:30:11,880 Speaker 11: and stimulus policies, and I think that gives the marcut 564 00:30:11,920 --> 00:30:15,040 Speaker 11: some excitement. I mean, for us, I think the most 565 00:30:15,080 --> 00:30:19,000 Speaker 11: important word, if we have to choose from sort of 566 00:30:19,040 --> 00:30:23,640 Speaker 11: the announcement, is the mention of consumption let stimulus, because 567 00:30:23,640 --> 00:30:27,600 Speaker 11: I think in sort of the I think traditionally or 568 00:30:27,800 --> 00:30:32,880 Speaker 11: kind of from a Shi policy toolbox perspective. He has 569 00:30:33,000 --> 00:30:36,960 Speaker 11: been kind of more proactive in terms of supply side stimulus, 570 00:30:37,320 --> 00:30:41,000 Speaker 11: and he's not a particular fan of the demand size similars. 571 00:30:41,120 --> 00:30:44,400 Speaker 3: That is Stephanie Leung, the chief investment officer at Stashuway 572 00:30:44,560 --> 00:30:48,400 Speaker 3: And we are back with Bloomberg's Katya Dmitrieva. Katya, when 573 00:30:48,440 --> 00:30:50,720 Speaker 3: I think of the way in which the Chinese economy 574 00:30:50,840 --> 00:30:54,560 Speaker 3: is managed, we're talking stimulus now. The GDP growth target 575 00:30:54,680 --> 00:30:56,360 Speaker 3: is one of the first things that come to mind. 576 00:30:56,400 --> 00:30:58,720 Speaker 3: We'll have to wait and see, obviously, is whether the 577 00:30:58,800 --> 00:31:01,960 Speaker 3: target for twenty twenty four of around five percent was 578 00:31:02,360 --> 00:31:05,840 Speaker 3: in fact achieved. But what are we thinking about twenty 579 00:31:05,920 --> 00:31:08,960 Speaker 3: twenty five given everything that we're hearing coming out of 580 00:31:09,000 --> 00:31:12,200 Speaker 3: the polit bureau, not the official readout. I know, it's 581 00:31:12,360 --> 00:31:16,200 Speaker 3: just more subtle messaging. Can we expect that this more 582 00:31:16,360 --> 00:31:20,600 Speaker 3: robust policy support will deliver a five percent GDP target 583 00:31:20,680 --> 00:31:21,080 Speaker 3: next year? 584 00:31:22,040 --> 00:31:26,400 Speaker 10: Well, that's certainly what economists see. They're expecting about four 585 00:31:26,480 --> 00:31:29,640 Speaker 10: point eight percent, which is right in that ballpark of 586 00:31:30,320 --> 00:31:34,160 Speaker 10: about five percent that Chinese policy makers have set. And 587 00:31:34,640 --> 00:31:38,520 Speaker 10: what you were discussing there about the messaging from the 588 00:31:38,600 --> 00:31:42,680 Speaker 10: Chinese government is so important. So far, the government has 589 00:31:42,760 --> 00:31:45,960 Speaker 10: really released stimulus in sort of dribs and drabs right 590 00:31:46,120 --> 00:31:49,800 Speaker 10: so concentrated in October November, but really just kind of 591 00:31:49,920 --> 00:31:55,360 Speaker 10: slowly rolling it out. This was probably their most forceful 592 00:31:55,800 --> 00:32:01,440 Speaker 10: statements on future stimulus yet. And we really monitor the 593 00:32:01,680 --> 00:32:05,160 Speaker 10: Chinese officials like we monitor the Federal Reserve, so every 594 00:32:05,240 --> 00:32:09,800 Speaker 10: single word, you know, change, removal, tweak, really matters. And 595 00:32:09,920 --> 00:32:12,440 Speaker 10: they were the most forceful since basically the two thousand 596 00:32:12,440 --> 00:32:16,440 Speaker 10: and eight financial crisis. So it is likely that going 597 00:32:16,600 --> 00:32:20,040 Speaker 10: into next year, they're thinking about what the target might be. 598 00:32:20,200 --> 00:32:23,200 Speaker 10: They're messaging around the target and achieving it. From what 599 00:32:23,360 --> 00:32:26,200 Speaker 10: I've been discussing with analysts, it's likely to be again 600 00:32:26,520 --> 00:32:29,120 Speaker 10: around five percent or four point five to five percent, 601 00:32:29,480 --> 00:32:32,040 Speaker 10: and they really can't do that without stimulus, and they 602 00:32:32,160 --> 00:32:34,760 Speaker 10: certainly can't do it without stimulus in the middle of 603 00:32:34,800 --> 00:32:35,320 Speaker 10: a trade war. 604 00:32:35,800 --> 00:32:37,560 Speaker 3: So the other thing I want to consider in all 605 00:32:37,600 --> 00:32:40,520 Speaker 3: of this, maybe the elephant in the room is China's 606 00:32:40,560 --> 00:32:44,240 Speaker 3: trade relation with the US and the potential for maybe 607 00:32:44,280 --> 00:32:46,680 Speaker 3: another trade war, if we can even describe it that way. 608 00:32:47,240 --> 00:32:51,480 Speaker 3: We know that President electromp is threatening sweeping tariffs on 609 00:32:51,760 --> 00:32:55,800 Speaker 3: all Chinese goods with sixty percent duties, and just last month, 610 00:32:56,480 --> 00:32:58,960 Speaker 3: I think he vowed to impose an additional ten percent 611 00:32:59,040 --> 00:33:02,280 Speaker 3: duty that was if Beijing doesn't help stem the flow 612 00:33:02,320 --> 00:33:05,840 Speaker 3: of fentanyl coming across the US southern border. What's the 613 00:33:06,080 --> 00:33:09,600 Speaker 3: analysis on this from the folks that you are speaking with. 614 00:33:09,920 --> 00:33:12,160 Speaker 3: Is this tariff threat being viewed as more of a 615 00:33:12,680 --> 00:33:16,120 Speaker 3: negotiating ploy or are people really concerned that something may 616 00:33:16,800 --> 00:33:19,840 Speaker 3: be put in place that will have a real bite. 617 00:33:21,640 --> 00:33:24,840 Speaker 10: This is such a good question and the exact question 618 00:33:25,320 --> 00:33:28,040 Speaker 10: that everyone is asking, and it's a bit of both. 619 00:33:28,480 --> 00:33:32,080 Speaker 10: It's very clear that Trump is targeting China, wants to 620 00:33:32,160 --> 00:33:36,600 Speaker 10: target China has been very vocal about tariffs and imposing 621 00:33:36,680 --> 00:33:39,880 Speaker 10: higher tariffs on Chinese goods, so that part is clear. 622 00:33:39,960 --> 00:33:42,880 Speaker 10: There is a general assumption that will see some sort 623 00:33:42,920 --> 00:33:47,520 Speaker 10: of tariffs, however, probably not as high as sixty percent. 624 00:33:48,200 --> 00:33:50,720 Speaker 10: So I'm hearing estimates of like anywhere between, you know, 625 00:33:50,920 --> 00:33:54,280 Speaker 10: twenty and forty percent is the going assumption. And you 626 00:33:54,360 --> 00:33:57,160 Speaker 10: can tell people are taking it seriously because we've already 627 00:33:57,240 --> 00:34:01,080 Speaker 10: seen signs that people are reacting. Thatsinesses are reacting with 628 00:34:01,280 --> 00:34:05,760 Speaker 10: front loading, so US inventories are up, port activity across 629 00:34:05,880 --> 00:34:09,319 Speaker 10: China's largest ports has also picked up in the past month, 630 00:34:09,760 --> 00:34:14,280 Speaker 10: basically since Donald Trump was elected. We're likely to continue 631 00:34:14,320 --> 00:34:16,440 Speaker 10: to see that throughout early next year. 632 00:34:17,360 --> 00:34:19,080 Speaker 3: One of the things that I have to ask there 633 00:34:19,120 --> 00:34:21,120 Speaker 3: are a couple of threads here that we can tease out. 634 00:34:21,320 --> 00:34:26,480 Speaker 3: One is the response that Beijing has already undertaken restricting 635 00:34:26,640 --> 00:34:32,520 Speaker 3: some critical materials for technology. There's this perhaps investigation into Nvidia, 636 00:34:32,840 --> 00:34:36,239 Speaker 3: But can you help me understand how China may respond 637 00:34:36,520 --> 00:34:38,920 Speaker 3: in using its currency. There was a report that I 638 00:34:39,719 --> 00:34:42,600 Speaker 3: that I came across that Beijing is considering allowing that 639 00:34:42,680 --> 00:34:46,239 Speaker 3: you want to weaken in response to a potential trade war. 640 00:34:46,360 --> 00:34:48,320 Speaker 3: Is that something that's really being discussed. 641 00:34:49,400 --> 00:34:55,520 Speaker 10: Yeah, they almost officials almost don't have a choice. Earlier 642 00:34:55,600 --> 00:35:00,560 Speaker 10: this year, Chinese officials were really adamant and really vocal 643 00:35:00,600 --> 00:35:05,040 Speaker 10: about wanting to keep the yuon strong. However, in a 644 00:35:05,120 --> 00:35:08,279 Speaker 10: situation when you're in a trade war and suddenly your 645 00:35:08,360 --> 00:35:12,000 Speaker 10: main source of growth, so China has relied very heavily 646 00:35:12,080 --> 00:35:16,799 Speaker 10: on exports and industrialization this year over the past year 647 00:35:16,960 --> 00:35:20,279 Speaker 10: to really drive growth. If that's at risk, then they 648 00:35:20,360 --> 00:35:25,120 Speaker 10: don't really have a choice other than to lower rates 649 00:35:25,400 --> 00:35:30,600 Speaker 10: and kind of let the yuon get weaker and then 650 00:35:30,800 --> 00:35:34,800 Speaker 10: offload those exports elsewhere. Now, that's going to create a 651 00:35:34,880 --> 00:35:39,279 Speaker 10: lot more a lot more pushback in emerging markets and 652 00:35:39,360 --> 00:35:42,040 Speaker 10: in Southeast Asia countries where there is already kind of 653 00:35:42,080 --> 00:35:46,759 Speaker 10: a growing pushback to Chinese imports. But there's kind of 654 00:35:46,920 --> 00:35:49,560 Speaker 10: no other way about it. You can't maintain a strong 655 00:35:49,640 --> 00:35:54,120 Speaker 10: currency without, you know, structural reforms unless they unless we 656 00:35:54,200 --> 00:35:58,919 Speaker 10: suddenly see an about face in the next year among 657 00:35:59,000 --> 00:36:02,520 Speaker 10: officials where they start focusing on letting the consumer drive growth. 658 00:36:03,760 --> 00:36:07,440 Speaker 10: They need they need to keep exports alive, they need 659 00:36:07,520 --> 00:36:09,520 Speaker 10: to keep manufacturers alive. 660 00:36:09,800 --> 00:36:12,800 Speaker 3: We were talking a moment ago about the overall Chinese economy, 661 00:36:12,800 --> 00:36:14,279 Speaker 3: and I think you and I can agree that one 662 00:36:14,320 --> 00:36:17,719 Speaker 3: of the bright spots has been the export economy, which 663 00:36:17,800 --> 00:36:22,399 Speaker 3: these proposed tariffs would target immediately. And I'm wondering whether 664 00:36:22,640 --> 00:36:26,239 Speaker 3: Beijing is perhaps sensing that it's in a bit of 665 00:36:26,360 --> 00:36:29,560 Speaker 3: a maybe a more vulnerable situation right now and that 666 00:36:29,760 --> 00:36:33,680 Speaker 3: perhaps the US has the upper hand. Is that an overstatement? 667 00:36:35,200 --> 00:36:40,080 Speaker 10: No, I think that's right, and we have seen, you know, 668 00:36:40,280 --> 00:36:44,120 Speaker 10: the examples you just mentioned with the ban on some 669 00:36:44,320 --> 00:36:48,320 Speaker 10: minerals and the investigation into Nvidia. They're sort of and 670 00:36:48,680 --> 00:36:51,239 Speaker 10: paired with the stimulus. I mean, these all came within 671 00:36:51,280 --> 00:36:54,759 Speaker 10: twenty four hours of one another. And the picture that 672 00:36:54,920 --> 00:36:57,440 Speaker 10: paints for us is the way that you know, it 673 00:36:57,560 --> 00:37:01,080 Speaker 10: shows the structure shape of how China may react in 674 00:37:01,200 --> 00:37:03,480 Speaker 10: trade war two point zero versus one point zero, and 675 00:37:03,600 --> 00:37:06,440 Speaker 10: that is a bit more of a conciliatory approach, and 676 00:37:06,560 --> 00:37:09,800 Speaker 10: that is one where they're going toe to toe with 677 00:37:10,000 --> 00:37:13,280 Speaker 10: As one analyst told me, you know, if it's basically 678 00:37:13,400 --> 00:37:16,160 Speaker 10: China saying, you know, if you're going to play tip 679 00:37:16,239 --> 00:37:18,920 Speaker 10: for tat, like we're going to play as well, but 680 00:37:19,000 --> 00:37:23,040 Speaker 10: it's not taking the most aggressive action, not going back 681 00:37:23,040 --> 00:37:25,799 Speaker 10: to the sort of like wolf warrior diplomacy days. 682 00:37:26,040 --> 00:37:29,880 Speaker 3: This is a very delicate situation and on the economic side, Katya, 683 00:37:29,920 --> 00:37:32,000 Speaker 3: thank you so much for joining us and helping understand 684 00:37:32,040 --> 00:37:35,320 Speaker 3: the nuances of not only the Chinese economy and what 685 00:37:35,440 --> 00:37:38,600 Speaker 3: is happening at the moment, but the trade relations between 686 00:37:39,080 --> 00:37:42,400 Speaker 3: Beijing and Washington. Thanks for having me on that is Bloomberg' 687 00:37:42,480 --> 00:37:46,239 Speaker 3: Katya Dmitrieva. Katya covers Asia economics from our bureau in 688 00:37:46,360 --> 00:37:49,240 Speaker 3: Hong Kong. I'm Doug Krisner. You can catch us weekdays 689 00:37:49,320 --> 00:37:53,719 Speaker 3: right here for the Daybreak Asia podcast. It's available on Apple, Spotify, 690 00:37:54,080 --> 00:37:55,600 Speaker 3: or wherever you get your podcast. 691 00:37:55,960 --> 00:37:58,360 Speaker 2: Tom, Thank you Doug. And that does it for this 692 00:37:58,600 --> 00:38:01,280 Speaker 2: edition of Bloomberg day Break Weekend. Join us again Monday 693 00:38:01,320 --> 00:38:03,400 Speaker 2: morning at five am Wall Street Time for the latest 694 00:38:03,440 --> 00:38:06,000 Speaker 2: on markets overseas and the news you need to start 695 00:38:06,040 --> 00:38:09,400 Speaker 2: your day. I'm Tom Buzzby. Stay with us. Top stories 696 00:38:09,440 --> 00:38:11,799 Speaker 2: and global business headlines are coming up right now.