1 00:00:02,520 --> 00:00:04,760 Speaker 1: Good morning. It's Tuesday, the twenty eighth of November here 2 00:00:04,760 --> 00:00:07,400 Speaker 1: in London. This is the Bloomberg Day BAQT podcast. I'm 3 00:00:07,440 --> 00:00:08,600 Speaker 1: Caroline Hepkin and. 4 00:00:08,560 --> 00:00:11,879 Speaker 2: I'm Stephen Carroll. Coming up today, Israel and Hamas agree 5 00:00:11,920 --> 00:00:15,600 Speaker 2: to maintain a pause in fighting as more hostages are released. 6 00:00:15,880 --> 00:00:19,160 Speaker 1: Elon musk sits down for talks with Net and Yahoo 7 00:00:19,200 --> 00:00:22,120 Speaker 1: in a bid to quell accusations of anti Semitism. 8 00:00:22,520 --> 00:00:26,120 Speaker 2: Plus a special report on how Europe's once crisis torn 9 00:00:26,239 --> 00:00:30,080 Speaker 2: periphery has been transformed into the Darling of the bond market. 10 00:00:30,440 --> 00:00:32,720 Speaker 1: Let's start with a roundup of our top stories. 11 00:00:33,520 --> 00:00:36,680 Speaker 2: Israel and Hamas have agreed to extend a ceasefire until 12 00:00:36,720 --> 00:00:40,280 Speaker 2: Thursday morning, as freed hostages continue to arrive in Israel. 13 00:00:40,680 --> 00:00:43,760 Speaker 2: Under the initial deal, Hamas agreed to free fifty captives 14 00:00:43,760 --> 00:00:45,760 Speaker 2: in exchange for the release of one hundred and fifty 15 00:00:45,800 --> 00:00:49,800 Speaker 2: Palestinian prisoners. The extended truce is expected to sustain the 16 00:00:49,920 --> 00:00:53,920 Speaker 2: daily ratio of hostages and prisoners being released by both sides. 17 00:00:54,280 --> 00:00:57,560 Speaker 2: John Kirby is the spokesman for the US National Security Council. 18 00:00:57,760 --> 00:01:00,520 Speaker 3: Shamiditarian pause has already brought a halt of the fighting 19 00:01:00,560 --> 00:01:03,840 Speaker 3: together with a surge of humanitarian assistance now in order 20 00:01:03,880 --> 00:01:06,039 Speaker 3: to extend the pause, and mass has committed to releasing 21 00:01:06,080 --> 00:01:09,959 Speaker 3: another twenty women and children over the next two days. 22 00:01:10,080 --> 00:01:12,880 Speaker 3: We would, of course hope to see the pause extended further. 23 00:01:14,400 --> 00:01:17,160 Speaker 2: Kirby spoke after President Joe Biden said he wants to 24 00:01:17,200 --> 00:01:20,040 Speaker 2: prolong the pause in the war, which has killed thousands 25 00:01:20,080 --> 00:01:23,240 Speaker 2: of people and inflame tensions in the Middle East and beyond. 26 00:01:23,959 --> 00:01:27,600 Speaker 1: Elon Musk says that he'd like to help rebuild Gaza 27 00:01:27,680 --> 00:01:30,440 Speaker 1: after the war with her mask. The billionaire Tesla CEO 28 00:01:30,600 --> 00:01:33,679 Speaker 1: made the comments in a conversation with Israeli Prime Minister 29 00:01:33,760 --> 00:01:37,399 Speaker 1: Benjamin Netanyaho was on a visit to the country. On 30 00:01:37,440 --> 00:01:38,880 Speaker 1: his social media site. 31 00:01:38,880 --> 00:01:42,920 Speaker 4: X, those who are intended murder must be neutralized, then 32 00:01:43,800 --> 00:01:47,880 Speaker 4: that the propaganda will stop, that is training people to 33 00:01:47,920 --> 00:01:51,600 Speaker 4: be murderers in the future, and then and then making 34 00:01:52,120 --> 00:01:56,280 Speaker 4: Gaza prosperous. And if that happens, I think will be 35 00:01:56,320 --> 00:01:58,520 Speaker 4: a good future. Well, I hope he will be involved 36 00:01:58,520 --> 00:01:59,760 Speaker 4: in that help. 37 00:02:00,960 --> 00:02:03,720 Speaker 1: Musk's Israel visit appears to be an effort to diffuse 38 00:02:03,760 --> 00:02:07,320 Speaker 1: a growing backlash over the billionaires endorsement of an anti 39 00:02:07,360 --> 00:02:11,800 Speaker 1: semitic tweet. Last week, corporations including Apple and Walt Disney 40 00:02:11,800 --> 00:02:16,280 Speaker 1: stopped advertising on x over concerns of increasing antisemitism and 41 00:02:16,440 --> 00:02:19,520 Speaker 1: hate speech on the site since Musk purchased this. 42 00:02:20,320 --> 00:02:23,160 Speaker 2: Saudi Arabia is asking others in OPEC Plus to reduce 43 00:02:23,200 --> 00:02:27,880 Speaker 2: their oil production quotas Bloomberg's and Kate's reports, Saudi. 44 00:02:27,600 --> 00:02:30,639 Speaker 5: Arabia has been making a largely unilateral supply cut back 45 00:02:30,639 --> 00:02:33,079 Speaker 5: of one million barrels a day since July and is 46 00:02:33,120 --> 00:02:36,040 Speaker 5: now seeking further support from other OPEC Plus members, but 47 00:02:36,120 --> 00:02:39,400 Speaker 5: some countries are resisting. The twenty three nation Alliance faces 48 00:02:39,400 --> 00:02:42,519 Speaker 5: pressure to intervene in crude markets following a seventeen percent 49 00:02:42,560 --> 00:02:45,519 Speaker 5: drop in prices over the past two months amid plentiful 50 00:02:45,520 --> 00:02:49,280 Speaker 5: stockpiles and a darkening economic backdrop. The oil market could 51 00:02:49,280 --> 00:02:52,000 Speaker 5: weaken even more in twenty twenty four, with forecasts of 52 00:02:52,040 --> 00:02:57,919 Speaker 5: a new supply surplus in Washington and Kate's Bloomberg Radio. 53 00:02:56,880 --> 00:03:00,600 Speaker 1: Now to some UK news, inflation in shops fall into 54 00:03:00,639 --> 00:03:04,080 Speaker 1: a seventeen month low as retailers fight to attract shoppers 55 00:03:04,080 --> 00:03:07,560 Speaker 1: ahead of the Christmas period. The British Retail Consortium said 56 00:03:07,560 --> 00:03:10,639 Speaker 1: that inflation slowed to four point three percent, down from 57 00:03:10,680 --> 00:03:13,760 Speaker 1: five point two percent in October. It's the six month 58 00:03:13,800 --> 00:03:17,480 Speaker 1: in a row that the Trade Association has recorded declines. However, 59 00:03:17,480 --> 00:03:19,679 Speaker 1: the Lobby Group said that there was no guarantee that 60 00:03:19,800 --> 00:03:24,040 Speaker 1: inflation would keep falling, with higher taxes and wage increases 61 00:03:24,320 --> 00:03:25,440 Speaker 1: pushing up costs. 62 00:03:25,919 --> 00:03:28,880 Speaker 2: While home buyers in the UK are securing bigger discounts 63 00:03:28,919 --> 00:03:31,639 Speaker 2: as more sellers cut prices. Boomerks taa at a Baio 64 00:03:31,760 --> 00:03:33,720 Speaker 2: has the details. The Property Portal. 65 00:03:33,880 --> 00:03:37,840 Speaker 6: Zupler says the gap between asking prices and actual sale 66 00:03:37,880 --> 00:03:40,800 Speaker 6: prices rose to a five year high in the first 67 00:03:40,880 --> 00:03:44,520 Speaker 6: half of November. The average discount was five and a 68 00:03:44,560 --> 00:03:48,240 Speaker 6: half percent, but one in four buyers secured a reduction 69 00:03:48,400 --> 00:03:51,920 Speaker 6: of more than ten percent. The biggest discounts were found 70 00:03:52,000 --> 00:03:56,080 Speaker 6: in southern England. In London and the Southeast, the average 71 00:03:56,160 --> 00:04:00,760 Speaker 6: was six point one percent. Zupler says increase supply it 72 00:04:00,800 --> 00:04:04,800 Speaker 6: means sellers will have to price their properties quote realistically 73 00:04:05,120 --> 00:04:09,480 Speaker 6: to attract interest. The news comes as the average number 74 00:04:09,480 --> 00:04:13,080 Speaker 6: of homes for sale per estate agency has risen to 75 00:04:13,160 --> 00:04:18,000 Speaker 6: its highest level in six years in London. Tia Adubaio 76 00:04:18,279 --> 00:04:19,320 Speaker 6: Bloomberg Radio. 77 00:04:20,360 --> 00:04:21,960 Speaker 2: In a moment, we'll be looking at how the markets 78 00:04:21,960 --> 00:04:24,680 Speaker 2: have been reviewing a reversal of the fiscal fortunes of 79 00:04:24,720 --> 00:04:27,200 Speaker 2: countries in the euro Area. Alice Atkins will join us 80 00:04:27,200 --> 00:04:29,080 Speaker 2: with that story in just a moment. But another one 81 00:04:29,080 --> 00:04:32,320 Speaker 2: that caught our eye this morning. It's that time of year, Caroline. 82 00:04:32,440 --> 00:04:35,760 Speaker 2: Words of the year. The Merriam Webster Dictionary has chosen 83 00:04:36,000 --> 00:04:38,320 Speaker 2: authentic as its word of the year. 84 00:04:38,560 --> 00:04:41,680 Speaker 1: Okay, well, it's our favorite obviously on radio indeed a 85 00:04:41,800 --> 00:04:47,120 Speaker 1: crafting a language authentic. Well, I can understand that given. 86 00:04:46,839 --> 00:04:49,640 Speaker 2: The AI difficulty information. 87 00:04:49,400 --> 00:04:52,600 Speaker 1: Understanding what is actually real and what is not real 88 00:04:52,640 --> 00:04:54,719 Speaker 1: in the world right now, it was pretty confusing. 89 00:04:54,760 --> 00:04:56,760 Speaker 2: I suspect yeah for most of us. 90 00:04:56,839 --> 00:04:57,000 Speaker 6: Yeah. 91 00:04:57,040 --> 00:04:59,640 Speaker 2: Merriam Webster's editor at large says that the line between 92 00:04:59,720 --> 00:05:02,640 Speaker 2: real and fake has become increasingly blurred, and as a result, 93 00:05:02,720 --> 00:05:06,040 Speaker 2: in social media and marketing, authentic has become the gold 94 00:05:06,120 --> 00:05:09,240 Speaker 2: standard for building trust. Other words out that start out 95 00:05:09,320 --> 00:05:13,000 Speaker 2: during the year included dystopian, indict and coronation. 96 00:05:13,360 --> 00:05:17,960 Speaker 1: Oh, let's going back to the summer. Okay, there's a little. 97 00:05:16,720 --> 00:05:18,680 Speaker 2: Ray of hope and there somewhere. 98 00:05:18,839 --> 00:05:22,200 Speaker 1: For the people in the UK. Also that an important one. Okay, 99 00:05:22,360 --> 00:05:25,680 Speaker 1: very interesting story on the Bloomberg terminal. Then let's get 100 00:05:25,680 --> 00:05:28,719 Speaker 1: back to our top news. Now, Israel and her Mass 101 00:05:28,760 --> 00:05:32,120 Speaker 1: have agreed to extend a cease fire in their devastating war. 102 00:05:32,160 --> 00:05:35,080 Speaker 1: The two sides will pause fighting for an additional two 103 00:05:35,200 --> 00:05:38,760 Speaker 1: days until Thursday. The initial four day truce was the 104 00:05:38,800 --> 00:05:42,120 Speaker 1: first since the conflict erupted in early October when Hams 105 00:05:42,240 --> 00:05:46,279 Speaker 1: attacked Israel, which retaliated by bombing Garza and reducing much 106 00:05:46,279 --> 00:05:49,360 Speaker 1: of it to Robert. Joining us now is Bloomberg's EMEA 107 00:05:49,560 --> 00:05:52,800 Speaker 1: news director Roslin matheson Good Morning, Ross, Thanks for being 108 00:05:52,839 --> 00:05:56,440 Speaker 1: with us. Do we know any more about the plan 109 00:05:56,960 --> 00:05:59,839 Speaker 1: for har Mass to free more hostages and Israel to 110 00:06:00,120 --> 00:06:01,120 Speaker 1: least more prisoners? 111 00:06:02,240 --> 00:06:04,680 Speaker 7: Well, what we know is that this extension, which was 112 00:06:04,760 --> 00:06:08,120 Speaker 7: somewhat expected, as likely to be under the same terms 113 00:06:08,160 --> 00:06:11,400 Speaker 7: as we've seen so far, which is roughly, for every 114 00:06:12,000 --> 00:06:16,279 Speaker 7: one hostage released by Hermas one Israeli hostage, there's at 115 00:06:16,360 --> 00:06:22,080 Speaker 7: least three Palestinian hostages released in turn by the Israelis, 116 00:06:22,080 --> 00:06:25,880 Speaker 7: so it's about a one for three exchange. What we 117 00:06:25,960 --> 00:06:28,480 Speaker 7: do know is that those exchanges have happened so far 118 00:06:29,080 --> 00:06:32,200 Speaker 7: every day in the truth, even if they've happened sometimes 119 00:06:32,560 --> 00:06:35,080 Speaker 7: quite late in the day, because there has been continued 120 00:06:35,279 --> 00:06:39,360 Speaker 7: arguing through the day about some of the terms and conditions, 121 00:06:39,680 --> 00:06:43,240 Speaker 7: but at least there's been an agreement broken largely by Katar, 122 00:06:43,760 --> 00:06:46,440 Speaker 7: to extend it for at least another two days. And 123 00:06:46,480 --> 00:06:49,719 Speaker 7: it's interesting because those two days take us to around 124 00:06:49,720 --> 00:06:53,440 Speaker 7: the time potentially that the US Secretary of State Anthony 125 00:06:53,440 --> 00:06:56,480 Speaker 7: Blincoln is expected to again be visiting Israel. 126 00:06:57,640 --> 00:07:01,000 Speaker 2: What should we take away from that timetable Rose, Does 127 00:07:01,040 --> 00:07:03,359 Speaker 2: that mean that we could have hoped that perhaps have 128 00:07:03,400 --> 00:07:06,480 Speaker 2: a longer extension to this truth or perhaps a more 129 00:07:06,520 --> 00:07:07,360 Speaker 2: meaningful talks. 130 00:07:08,440 --> 00:07:11,400 Speaker 7: We could see clearly that there's been caused by the 131 00:07:11,520 --> 00:07:14,600 Speaker 7: US and others, including behind the scenes, no doubt, to 132 00:07:14,680 --> 00:07:17,320 Speaker 7: extend the truth for as long as possible. That's also 133 00:07:17,440 --> 00:07:20,520 Speaker 7: not just to allow for the hostages to be exchanged, 134 00:07:20,520 --> 00:07:25,160 Speaker 7: but also to promote a humanitarian aid to come in 135 00:07:25,560 --> 00:07:29,200 Speaker 7: through that Rougher crossing from Egypt into Gaza and to 136 00:07:29,320 --> 00:07:33,280 Speaker 7: move north. So it's also about alleviating the humanitarian situation 137 00:07:33,880 --> 00:07:36,840 Speaker 7: inside Gaza, which is something the US now is particularly 138 00:07:37,280 --> 00:07:39,800 Speaker 7: focused on. So the timing of the visit's interesting because 139 00:07:39,800 --> 00:07:43,040 Speaker 7: it might mean that you can see continued US pressure 140 00:07:43,320 --> 00:07:47,160 Speaker 7: on Israel to extend the truth. He was already in 141 00:07:47,200 --> 00:07:50,400 Speaker 7: the region. He's going to a NATO meeting in Europe 142 00:07:50,440 --> 00:07:53,320 Speaker 7: and then likely onto the COOP Climate Summit, so it 143 00:07:53,360 --> 00:07:55,440 Speaker 7: does make sense to be stopping off. But it is 144 00:07:55,560 --> 00:07:58,640 Speaker 7: I think his third visit there already since the war 145 00:07:58,680 --> 00:07:59,120 Speaker 7: broke out. 146 00:07:59,400 --> 00:07:59,480 Speaker 5: Ye. 147 00:07:59,560 --> 00:08:04,160 Speaker 1: Absolutely. In later Foreign Ministers Convenient in Brussels amid the war, 148 00:08:04,520 --> 00:08:09,080 Speaker 1: Elon Musk was pictured and we heard an exit there 149 00:08:09,080 --> 00:08:12,440 Speaker 1: of his conversation with the Israeli Prime Minister. He has 150 00:08:12,480 --> 00:08:17,480 Speaker 1: said he would like to help rebuild Gaza and Starlink, 151 00:08:17,520 --> 00:08:22,560 Speaker 1: of course, has become hugely important, certainly in the Ukraine War. 152 00:08:23,280 --> 00:08:24,920 Speaker 1: What do you make of Elon Musk? 153 00:08:26,920 --> 00:08:29,480 Speaker 7: Well, it's interesting to see that Elon Musk made that 154 00:08:29,640 --> 00:08:33,560 Speaker 7: visit in the end after weeks of claims that his 155 00:08:34,160 --> 00:08:37,240 Speaker 7: site Twitter known as x was sort of not doing 156 00:08:37,360 --> 00:08:41,240 Speaker 7: enough to down on anti Semitic commentary in the aftermath 157 00:08:42,320 --> 00:08:46,080 Speaker 7: of Israel's move in Tagaza. But it seemed to me 158 00:08:46,120 --> 00:08:47,800 Speaker 7: to be a bit of a throwaway line. He did 159 00:08:47,840 --> 00:08:50,200 Speaker 7: it in an X space with the Israeli Prime minister 160 00:08:50,520 --> 00:08:52,880 Speaker 7: and he said, oh, sure, I'd like to help rebuild 161 00:08:52,880 --> 00:08:56,480 Speaker 7: Billy didn't offer any specifics around what that might look 162 00:08:56,520 --> 00:08:59,400 Speaker 7: like in terms of of age. We've also seen him 163 00:08:59,640 --> 00:09:02,440 Speaker 7: say similar in Ukraine and not a lot of follow 164 00:09:02,520 --> 00:09:05,280 Speaker 7: through there so far. What he does do is deploy 165 00:09:05,440 --> 00:09:10,160 Speaker 7: starlink to great effect. That's helped Ukraine on the battleground. 166 00:09:10,480 --> 00:09:14,080 Speaker 7: He's talking about Israel's use of it in Gaza Equally, 167 00:09:14,080 --> 00:09:16,959 Speaker 7: at the same time, he does get to then learn 168 00:09:17,040 --> 00:09:20,240 Speaker 7: from the battlefield through starlink, So it's not a completely 169 00:09:20,679 --> 00:09:24,559 Speaker 7: humanitarian donation on his part to be doing that. 170 00:09:24,640 --> 00:09:25,439 Speaker 4: It enables his. 171 00:09:25,440 --> 00:09:28,920 Speaker 7: Business to learn and grow as a result on the battlefield. 172 00:09:28,960 --> 00:09:30,760 Speaker 7: But yet not a lot of specifics from him so 173 00:09:30,840 --> 00:09:31,520 Speaker 7: far about what he. 174 00:09:31,520 --> 00:09:32,600 Speaker 4: Would like to do to help. 175 00:09:33,240 --> 00:09:36,319 Speaker 2: Well, I was thinking about the diplomacy across the region 176 00:09:36,320 --> 00:09:38,360 Speaker 2: on this as well. You mentioned the importance of Katar 177 00:09:38,480 --> 00:09:42,440 Speaker 2: in negotiating this truth and the extension of this truth. 178 00:09:42,840 --> 00:09:46,840 Speaker 2: How are those relations now between Israel and its neighbors 179 00:09:46,880 --> 00:09:49,240 Speaker 2: as we look to the extension of this pause and 180 00:09:49,320 --> 00:09:51,600 Speaker 2: to what might happen next when it comes to the 181 00:09:51,600 --> 00:09:52,480 Speaker 2: future of Gaza. 182 00:09:53,559 --> 00:09:55,800 Speaker 7: Well, it's interesting because you did hear the Israeli Prime 183 00:09:55,800 --> 00:09:58,840 Speaker 7: Minister yesterday in that X space talking about the future 184 00:09:58,960 --> 00:10:03,079 Speaker 7: briefly of relationship, the relationship with Saudi Arabian, saying that 185 00:10:03,440 --> 00:10:07,040 Speaker 7: he believes that there's an opportunity still there to completely 186 00:10:07,120 --> 00:10:09,800 Speaker 7: reset ties that had been on a bit of a 187 00:10:09,840 --> 00:10:12,360 Speaker 7: delicate path in the run up to this war. There'd 188 00:10:12,360 --> 00:10:16,760 Speaker 7: been some steps for them to move towards potentially normalization. 189 00:10:17,280 --> 00:10:20,000 Speaker 7: He seems to indicate that he still thinks that's possible 190 00:10:20,040 --> 00:10:23,040 Speaker 7: at some point down the track. We do know that 191 00:10:23,040 --> 00:10:26,080 Speaker 7: that Katar is seen as a pretty decent broker in 192 00:10:26,120 --> 00:10:29,080 Speaker 7: all of this, Egypt as well. Certainly they're able to 193 00:10:29,120 --> 00:10:34,240 Speaker 7: carry messages between Hamas and Israel, and so there has 194 00:10:34,320 --> 00:10:36,360 Speaker 7: been that role of those dates in all of this. 195 00:10:36,520 --> 00:10:38,520 Speaker 7: But we do know at the same time that the 196 00:10:38,559 --> 00:10:42,600 Speaker 7: Arab States in particular have been expressing strong concern about 197 00:10:42,640 --> 00:10:48,040 Speaker 7: Israel's activities inside Gaza and of course the humanitarian situation 198 00:10:48,200 --> 00:10:51,840 Speaker 7: there and demanding an extended cease fires. That's certainly something 199 00:10:51,920 --> 00:10:54,680 Speaker 7: where the pressure is coming also on that from the 200 00:10:54,720 --> 00:10:55,400 Speaker 7: Arab States. 201 00:10:56,040 --> 00:10:58,520 Speaker 1: Yeah, wells, thank you so much for being with us 202 00:10:58,559 --> 00:11:02,640 Speaker 1: this morning. Bloomberg's eme A news writer Roslin matheson on 203 00:11:02,720 --> 00:11:07,080 Speaker 1: the extension of the Israel Hamasa temporary CEASEPAR. 204 00:11:07,280 --> 00:11:08,920 Speaker 2: Want to turn to another story. Now it's been just 205 00:11:08,960 --> 00:11:11,880 Speaker 2: over a decade since a series of fiscal crises almost 206 00:11:11,920 --> 00:11:15,760 Speaker 2: broke the euro but a remarkable role reversal is now 207 00:11:15,880 --> 00:11:18,920 Speaker 2: underway across the region. Back then it was the so 208 00:11:19,040 --> 00:11:22,640 Speaker 2: called periphery countries running up massive debts. Now it's the 209 00:11:22,720 --> 00:11:26,560 Speaker 2: coronations of Germany and France which are facing a deadlock 210 00:11:26,720 --> 00:11:30,920 Speaker 2: over budget positions and testing the European Union's fiscal guidelines. 211 00:11:31,000 --> 00:11:33,320 Speaker 2: Joining us now to discuss as Bloomberg's Alice Atkins has 212 00:11:33,320 --> 00:11:36,280 Speaker 2: been looking at, how this has been playing out across markets. Alice, 213 00:11:36,320 --> 00:11:39,000 Speaker 2: great to have you with us on the program. How 214 00:11:39,080 --> 00:11:43,720 Speaker 2: has the investment community reacted then to these diverging outlooks. 215 00:11:43,679 --> 00:11:47,200 Speaker 8: Morning, Steven, Well, the tables have really turned since the 216 00:11:47,240 --> 00:11:50,600 Speaker 8: European sovereign debt crisis Ober a decade ago. You know, 217 00:11:50,720 --> 00:11:54,800 Speaker 8: back then parts of Eurot's periphery, like Greece, Portugal Island 218 00:11:54,840 --> 00:11:58,040 Speaker 8: and Spain, they had huge debt loads and many of 219 00:11:58,040 --> 00:12:02,080 Speaker 8: them faced bailouts. Now, years of austerity in the after 220 00:12:02,080 --> 00:12:05,080 Speaker 8: and after of those bailouts has seen these countries reform 221 00:12:05,120 --> 00:12:07,640 Speaker 8: their fiscal situations to the point where they are actually 222 00:12:07,679 --> 00:12:11,600 Speaker 8: outshining some of the traditionally safer peers like Germany, and France, 223 00:12:12,080 --> 00:12:15,160 Speaker 8: and this is being reflected in markets, and global investors 224 00:12:15,200 --> 00:12:18,400 Speaker 8: are opting to buy into parts of Europe's periphery over 225 00:12:18,440 --> 00:12:22,480 Speaker 8: the traditionally safer bonds issued by France and Germany on 226 00:12:22,559 --> 00:12:25,440 Speaker 8: the view that parts of the periphery will outperform next 227 00:12:25,520 --> 00:12:28,520 Speaker 8: year and bring better returns. So you've got the likes 228 00:12:28,520 --> 00:12:32,760 Speaker 8: of JP Morgan, who's overweight Spanish debt, and Newburger Berman 229 00:12:32,920 --> 00:12:36,199 Speaker 8: also like Spanish debt as well as Portuguese and Greek debt, 230 00:12:36,679 --> 00:12:39,760 Speaker 8: and then Goldman, Saxon and SoC Gen have also been 231 00:12:39,800 --> 00:12:42,920 Speaker 8: forecasting that parts of the periphery will outperform next year. 232 00:12:43,360 --> 00:12:46,280 Speaker 1: Yeah, I mean it's sort of staggering, isn't it that 233 00:12:46,280 --> 00:12:49,800 Speaker 1: that change? What do they see supporting them? The outperformance? 234 00:12:49,880 --> 00:12:51,520 Speaker 1: Why so? 235 00:12:51,800 --> 00:12:55,040 Speaker 8: Ballooning debt burdens and the question of how that supply 236 00:12:55,160 --> 00:12:57,959 Speaker 8: is going to be absorbed is something that's been rattling 237 00:12:58,280 --> 00:13:02,240 Speaker 8: global bomb markets glow. We seen it in the US 238 00:13:02,320 --> 00:13:05,160 Speaker 8: treasury market and it's certainly in play here in Europe too, 239 00:13:05,600 --> 00:13:08,360 Speaker 8: And it seems that these investors are taking confidence that 240 00:13:08,400 --> 00:13:10,880 Speaker 8: there's a lot less issuance coming from some of the 241 00:13:10,920 --> 00:13:14,240 Speaker 8: smaller peripheral economies next year. Than there is from the 242 00:13:14,320 --> 00:13:17,400 Speaker 8: likes of France and Germany. So there's around fifty billion 243 00:13:17,440 --> 00:13:20,520 Speaker 8: euros coming from Spain, Portugal and Greece next year, but 244 00:13:20,559 --> 00:13:23,800 Speaker 8: there's almost four times that coming from France and Germany. 245 00:13:24,640 --> 00:13:28,880 Speaker 8: And alongside these better fiscal positions and less issuance, with 246 00:13:29,000 --> 00:13:33,400 Speaker 8: parts of the periphery on track for primary surpluses, there's 247 00:13:33,520 --> 00:13:37,640 Speaker 8: also they're also on course for better growth rates. So Ireland, 248 00:13:37,760 --> 00:13:40,720 Speaker 8: Greece and Spain are set for you know, nearly double 249 00:13:40,840 --> 00:13:44,280 Speaker 8: or even triple the German GDP growth rate next year 250 00:13:44,320 --> 00:13:47,439 Speaker 8: according to what the European Commission is forecasting. 251 00:13:48,000 --> 00:13:51,080 Speaker 2: Now it's as always, there are diversent opinions in markets 252 00:13:51,120 --> 00:13:54,280 Speaker 2: as well. What's holding some investors back from leaning into 253 00:13:54,360 --> 00:13:55,440 Speaker 2: this peripheral debt. 254 00:13:56,600 --> 00:13:59,240 Speaker 8: So while it is an attractive opportunity in terms of 255 00:13:59,240 --> 00:14:02,760 Speaker 8: the fiscal position and better growth rates, the issue is 256 00:14:02,880 --> 00:14:06,080 Speaker 8: that for some of these smaller peripheral economies there is 257 00:14:06,160 --> 00:14:09,400 Speaker 8: just much less debt available to buy. So because of 258 00:14:09,400 --> 00:14:12,480 Speaker 8: all the reform and austerity programs that these economies have 259 00:14:12,559 --> 00:14:16,520 Speaker 8: gone through, there's much less debt available for investors. So, 260 00:14:16,640 --> 00:14:20,320 Speaker 8: for example Greece, seventy six percent of Greek debt is 261 00:14:20,640 --> 00:14:23,880 Speaker 8: still funded by the European stability mechanism. So that's why, 262 00:14:24,360 --> 00:14:28,720 Speaker 8: even though it might be an attractive opportunity, there's less 263 00:14:29,360 --> 00:14:33,520 Speaker 8: issuance available for investors to get their hands on. There's 264 00:14:33,560 --> 00:14:37,880 Speaker 8: also still quite a lot of concern around Italy's fiscal 265 00:14:37,960 --> 00:14:44,880 Speaker 8: situation and the possibility of their being you know, if 266 00:14:44,920 --> 00:14:48,640 Speaker 8: there were a deterioration and Moody's recently scrupped its negative 267 00:14:48,720 --> 00:14:51,760 Speaker 8: rating on Italian debt, which there were a lot of 268 00:14:51,840 --> 00:14:55,360 Speaker 8: jitters around it potentially being downgraded to junk. So if 269 00:14:55,400 --> 00:14:59,160 Speaker 8: there were a deterioration of Italy's fiscal situation that some 270 00:14:59,240 --> 00:15:01,960 Speaker 8: investors are con and that would seep through into a 271 00:15:02,000 --> 00:15:04,760 Speaker 8: wider sell off of peripheral debt due to the sort 272 00:15:04,760 --> 00:15:09,600 Speaker 8: of historical risky correlation of the region. Similarly, if there 273 00:15:09,600 --> 00:15:13,120 Speaker 8: were a big global risk off movement in markets, the 274 00:15:13,160 --> 00:15:16,280 Speaker 8: safe haven status of Germany it's unlikely to be questioned. 275 00:15:16,920 --> 00:15:19,280 Speaker 8: But then, you know, some investors are saying that this 276 00:15:19,400 --> 00:15:22,960 Speaker 8: would be a buying opportunity any sort of historical risky 277 00:15:23,440 --> 00:15:27,240 Speaker 8: associated sell off of peripheral debt because the fundamentals are 278 00:15:27,320 --> 00:15:30,000 Speaker 8: much more attractive in parts of the periphery, and so 279 00:15:30,360 --> 00:15:33,320 Speaker 8: it wouldn't actually reflect the outlook for the market. So 280 00:15:33,760 --> 00:15:37,200 Speaker 8: it certainly seems like we're moving away from these country 281 00:15:37,200 --> 00:15:40,440 Speaker 8: buckets of thinking about Europe as core versus periphery, and 282 00:15:40,480 --> 00:15:42,560 Speaker 8: it's become a lot more idiosyncratic. 283 00:15:44,120 --> 00:15:46,840 Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the 284 00:15:46,880 --> 00:15:49,960 Speaker 2: stories making news from London to Wall Street and beyond. 285 00:15:50,240 --> 00:15:54,200 Speaker 1: Look for us on your podcast feed every morning on Apple, Spotify, 286 00:15:54,280 --> 00:15:56,240 Speaker 1: and anywhere else you get your podcasts. 287 00:15:56,280 --> 00:15:59,320 Speaker 2: You can also listen live each morning on London DAB Radio, 288 00:15:59,320 --> 00:16:02,080 Speaker 2: the Bloomberg Business app, and Bloomberg dot Com. 289 00:16:02,080 --> 00:16:04,840 Speaker 1: Our flagship New York station, is also available on your 290 00:16:04,880 --> 00:16:09,600 Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty. 291 00:16:09,840 --> 00:16:11,240 Speaker 1: I'm Caroline Hepka. 292 00:16:11,000 --> 00:16:13,440 Speaker 2: And I'm Stephen Carol. Join us again tomorrow morning for 293 00:16:13,560 --> 00:16:15,960 Speaker 2: all the news you need to start your day right 294 00:16:15,960 --> 00:16:19,760 Speaker 2: here on Bloomberg Daybreak Europe.