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Speaker 1: This is Bloomberg day Break here for this Monday, the

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Speaker 1: twenty third of January in London. Coming up this hour,

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Speaker 1: Masters of the Universe. Citadel fortified investors with a record

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Speaker 1: breaking sixteen billion dollar return. The ECB is not for turning.

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Speaker 1: The Dutch Central Banker calls for at least two more

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Speaker 1: half point hikes capital earnings. Big pay hikes help Londoners

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Speaker 1: escape the worst of the UK's cast of living crunch.

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Speaker 1: How fast a price is really rising? The UK economy

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Speaker 1: turns a corner and one trillion dollar coins. Those are

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Speaker 1: the stories we're looking at in today's papers. I'm James Walcock.

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Speaker 1: Plus city workers hang on for bonuses before hunting for

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Speaker 1: new jobs. That's all straight ahead on Bloomberg day Break

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Speaker 1: Europe on DAB Digital Radio London, Bloomberg eleven three oh

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Speaker 1: New York, Bloomberg Washington, d C, Bloomberg one oh six one, Boston,

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Speaker 1: Bloomberg nine sixties, San Francisco, cyrus XM Channel one nine

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Speaker 1: and a round the world on Bloomberg Radio dot Com

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Speaker 1: and via the Bloomberg Business Set. Good morning, I'm Stephen

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Speaker 1: Carroll and I'm Caroline Hike. Here are the stories that

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Speaker 1: we're following today, Citadel made a record sixteen billion dollars

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Speaker 1: last year. That's the largest ever profit for a hedge fund,

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Speaker 1: surpassing the fifteen billion dollars that John Paulson generated in

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Speaker 1: two thousand and seven on his bet against subprime mortgages.

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Speaker 1: In total, the top twenty hedge funds generated twenty two

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Speaker 1: point four billion dollars in profits after fees, according to

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Speaker 1: estimates by lc H Investments. But it is a different

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Speaker 1: story outside the industry giants, with hedge funds overall losing

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Speaker 1: two hundred and eight billion last year. Elsie H estimated

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Speaker 1: that while the top twenty managers returned three point four percent,

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Speaker 1: the rest of funds that studied last in average of

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Speaker 1: eight point two percent. Okay, that's the big market story.

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Speaker 1: The ECB policy policy maker class Not has called for

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Speaker 1: multiple fifty basis point rate high as central bankers publicly

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Speaker 1: differ on the rate path ahead. The Dutch monetary policy

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Speaker 1: chief says that he expects tightening to continue until the summer.

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Speaker 1: Last week at Davos, President Christine Legarde said that monetary

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Speaker 1: policy needed to stay the course. We have to also

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Speaker 1: stay that course of resilience that we observed in twenty two.

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Speaker 1: So stay the course is my mantraal for monetary policy purposes,

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Speaker 1: no question about that. But I think other players must

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Speaker 1: also do the same thing. Legarde spoke as the eurozonees

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Speaker 1: price gains are finally showing signs of easing thanks to

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Speaker 1: plunging natural gas costs. Bloomberg reporting suggests that slowing inflation

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Speaker 1: has led some officials to consider twenty five basis point

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Speaker 1: hikes in future. Big pay hikes have helped London as

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Speaker 1: to whether the worst of the UK's ongoing cost of

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Speaker 1: living crunch, according to new research with the details here's

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Speaker 1: Bloomberg's You and Parts. London's residents saw their wages adjusted

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Speaker 1: for inflation slipped by just nine pounds a week over

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Speaker 1: the past year. This according to analysis either Center for

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Speaker 1: Economics and Business Research that they just suggest London has

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Speaker 1: did better than other parts of the UK, partly because

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Speaker 1: of faster pay rises, which on average surpassed eight percent

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Speaker 1: over the past year. However, the rest of the UK

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Speaker 1: didn't fare so well. On average, real wages dropped by

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Speaker 1: nineteen pounds a week, while Northern Ireland saw the biggest drop,

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Speaker 1: a slide of twenty six pounds a week. The figures

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Speaker 1: will add to pressure on the government's leveling up strategy,

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Speaker 1: which has faced increasing criticism and scrutiny in recent weeks.

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Speaker 1: In London, I'm You and parts of Bloomberg Daybreak Europe, Well,

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Speaker 1: let's stick with pay for a moment. City of London

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Speaker 1: workers are staying put as they wait for bonuses to

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Speaker 1: be paid. Data for Morgan McKinley's Autumn London Employment Monitor

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Speaker 1: shows that there was a twenty three percent drop in

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Speaker 1: job seekers for finance roles in the last three months

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Speaker 1: of two Increasing costs of living and the emergence of

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Speaker 1: flexible work has pushed many professionals into looking for new jobs.

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Speaker 1: Morgan McKinley found that workers who do move firm in

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Speaker 1: the final quarter of last year, at least they saw

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Speaker 1: their pay rise by an average of well streets focus

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Speaker 1: this week will be on earnings, with several big technology

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Speaker 1: names schedules to report here Spoomberg's Charlie Palace with a

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Speaker 1: look ahead of what two expects this week. We hear

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Speaker 1: from Intel, IBM and Texas Instruments. Those reports come as

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Speaker 1: big tech companies slash tens of thousands of jobs amid

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Speaker 1: a slowing economy. And sputtering profits. Sarah Hunts, portfolio manager

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Speaker 1: at Alpine Woods Capital Investors. I think that some of

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Speaker 1: the concerns that people had about the first quarter could

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Speaker 1: get pushed into the second quarter in the third quarter

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Speaker 1: because earnings may or may not be holding up. We

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Speaker 1: don't really have an answer yet. We've seen a little

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Speaker 1: bit of diversions on the financials depending on where you are,

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Speaker 1: But I think it's really going to be what's going

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Speaker 1: to happen to profit margins, what's going to happen to earnings.

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Speaker 1: Also this week, we'll be hearing from three m Boeing, Ge,

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Speaker 1: Johnson and Johnson, MasterCard, Visa, Southwest Airlines, and American Airlines,

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Speaker 1: among many others in New York. Charlie Pellett Bloomberg Daybreak Europe.

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Speaker 1: So those are a few of our top stories are

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Speaker 1: for you this morning. So in terms of earnings, and

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Speaker 1: Charlie Pellett was listing all of the different companies are

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Speaker 1: going to report this week. I think one of the

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Speaker 1: big focuses is on tech jobs in London. There's kind

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Speaker 1: of seems to be a bit of a job's theme

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Speaker 1: this morning. Are you you know how concerned is the

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Speaker 1: industry about tech leoth got Spotify now planning layoffs, and

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Speaker 1: then the Morgan McKinley story around city workers. Obviously everyone's

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Speaker 1: waiting for their bonus to be paid before they make

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Speaker 1: any decisions, but it's quite interesting that people are quite

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Speaker 1: nervous clearly, yeah, and what options people will have as well.

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Speaker 1: Remember some of the announcements from last week, we still

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Speaker 1: don't have the impact of, for example, Alphabet's job cuts,

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Speaker 1: and won't workers in Europe won't find out yet where

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Speaker 1: things are going to go because the announcements are being

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Speaker 1: rolled out across regions. So the US heard last week,

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Speaker 1: But if you're in a pack, I'll here after the

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Speaker 1: Lunar New Year holiday, and then European workers well here

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Speaker 1: after that whether or not their jobs are going to

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Speaker 1: be affected. So this is going to be quite a

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Speaker 1: stretched out story for people who are actually being affected

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Speaker 1: by these tech job cuts as well. Well. Some of

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Speaker 1: our report was really interesting on that because actually the

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Speaker 1: communication from some of these tech firms has been a

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Speaker 1: bit wanting in the sense that they haven't always communicated

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Speaker 1: very well to those employees who's staying, who's going, So

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Speaker 1: that might be another issue we don't know for people

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Speaker 1: elsewhere in Europe. Next, who measures inflation best? Is the

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Speaker 1: UK data as grim as its scenes? And can you

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Speaker 1: mint your way out of your problems? Now? The paper

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Speaker 1: review on blue Bird Daybreak Europe. The news you need

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Speaker 1: to know from today's papers Now. Bloomberg's James Wilcock joins

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Speaker 1: us with the details on the front pages. A lot

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Speaker 1: of economists commenting in the newspapers today. The ft is

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Speaker 1: leading on the cb I s Tony Danker saying that

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Speaker 1: SUNAC is burdening the UK economy with legislative chaos and

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Speaker 1: is falling behind the US and EU when it comes

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Speaker 1: to the race for greener business. But then you've also

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Speaker 1: picked up on some other comment pieces the former Bank

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Speaker 1: of England policy maker Andrew's centers in the Times. The

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Speaker 1: headline there James Reeds confused about the rate of inflation.

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Speaker 1: You have every right to be, yes, Caroline. It's it's

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Speaker 1: one for the nerds. I mean, so the line from

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Speaker 1: sentence is, if you're trying to measure inflation, you could

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Speaker 1: pick any one of four realistic metrics that are in

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Speaker 1: the UK cp I RPI, the Retail Pricing Index r

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Speaker 1: p i X, which is resurpricing that without more whish

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Speaker 1: costs or CPI H, which is the O and S

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Speaker 1: has chosen measure which includes his housing related costs, which

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Speaker 1: they measure by making homeotors be treated as if their

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Speaker 1: renters in their econometrics. Now, he says, this masses because

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Speaker 1: when you're trying to calculate how much things have gotten

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Speaker 1: worse for people, take teachers, since their pay is roughly

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Speaker 1: ten percent worse sort of in real terms by CPI H,

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Speaker 1: but it's twenty four in RPI. So when we're having

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Speaker 1: these arguments about price raises and how much people deserve

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Speaker 1: in salaries, he says, it's almost hard to tell because

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Speaker 1: we haven't decided on one clear measure. And he said

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Speaker 1: something that actually, in statistics terms, the UK needs to

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Speaker 1: figure out before we can get a grip of its

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Speaker 1: salary problems. Hmm. Interesting. Okay, it's another economist, Roger Bootles

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Speaker 1: from Capital Economics Rising and the Telegraph headline there Britain's

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Speaker 1: economy seems to be turning a corner. But don't get

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Speaker 1: your hopes up. Just yes, I mean I'd like to

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Speaker 1: bring optimism on a Monday morning. Stephen Bootles point is

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Speaker 1: this is a global recovery as it was a global problem.

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Speaker 1: And the big thing for Europe is it's actually looking

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Speaker 1: like a better picture than the US when we're seeing

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Speaker 1: sort of these big changes in energy prices having fallen

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Speaker 1: much further and expected. That is impacting Europe much better.

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Speaker 1: And although the British economy in particular is quite murky,

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Speaker 1: has a very tight labor market sized a rising much

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Speaker 1: faster and the baby would like Bootles points, actually there

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Speaker 1: is a lot to be hopeful about in the latest data,

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Speaker 1: although he says it's by no means over yet in

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Speaker 1: somet of some of the murky pictures you see around,

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Speaker 1: say government spending, which is coming in a lot worse

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Speaker 1: than would be expected. Okay, if that's very interesting. The

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Speaker 1: Wall Street Journal reporting on an issue out of the US,

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Speaker 1: of course, the US seeling story. Janet Yellen dismisses minting

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Speaker 1: one trillion dollar coin to avoid default. I mean it

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Speaker 1: was on my Christmas list, the one trillon dot coin. Sadly,

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Speaker 1: no no luck from Janet Yellen, and how this would

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Speaker 1: work for those of you who haven't followed this sharing

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Speaker 1: sality of US politics and where it's gotten to is

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Speaker 1: because of the debt ceiling and last Friday of the

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Speaker 1: U s hits it's amount of debt that it can

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Speaker 1: borrow the limit the Congress sets that it has since

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Speaker 1: the early unineteen hundreds. Janet Lard, the trainer sid could

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Speaker 1: Some Democrats have argued, use her power to mint coins

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Speaker 1: to mint a coin of any domination, So why not

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Speaker 1: just mint a one trillon dollar coin and that would

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Speaker 1: pay off the US debts. But the problem is Yellen,

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Speaker 1: who has also been a Chair of the Third in

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Speaker 1: the past. It says, the Fed probably wouldn't accept it,

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Speaker 1: and given she's in charge of the Treasury and she's

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Speaker 1: done the FED stop before, that's probably a pretty watertight argument.

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Speaker 1: But that means for a lot of the Democrats on

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Speaker 1: the left there are no easy ways out. As Congress

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Speaker 1: sets down for a sort of very difficult argument about

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Speaker 1: how to deal with the roughly three point one four

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Speaker 1: one point four trillion dollars of debt that it has

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Speaker 1: on the cards. With the House now split, the House

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Speaker 1: now being a Republican control, it's set to be a

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Speaker 1: few months of wrangling. Yeah, I do enjoy every time

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Speaker 1: this story comes up. I think we'll we'll Dan Yell

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Speaker 1: and be the person to put it to bed given

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Speaker 1: the fact that she's done both jobs. Probably not, No,

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Speaker 1: probably not. And also I would just add the caveat

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Speaker 1: you know that whatever is done on the Democratic side

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Speaker 1: at one point will then be copied on the Republican side.

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Speaker 1: Of that I think has to be taken into account.

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Speaker 1: You know, if you decide to uh yeah, to mince

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Speaker 1: such a coin, then then the opposition side when they

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Speaker 1: come in perhaps will do the same that it's often

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Speaker 1: tip for tetan US politics. Thanks so much James Wilcock

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Speaker 1: for look through the newspapers. Well, let's turn back to

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Speaker 1: central banks now. The Fed is in its blackout period

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Speaker 1: ahead of next week's meeting, but there's plenty of under

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Speaker 1: other central bank news to digest. The ECB is governing

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Speaker 1: councer member of Clouds cannot calling for a fifty basis

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Speaker 1: point hike in February. In March, while Ran says there

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Speaker 1: are grounds for significant increases in winter and early spring,

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Speaker 1: our chief rates corresponding Garfield Reynolds joins us now for more, Garfield,

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Speaker 1: are we getting any clearer picture from the ECB as

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Speaker 1: regards what it might do in its next meeting? Given

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Speaker 1: the economic aidlook appears to be improving well, I mean

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Speaker 1: with the economic outlook improving, that is tending to that

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Speaker 1: helped back those like Mr Knot who are looking for

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Speaker 1: a fifty basis point hike at the meeting. Markets are

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Speaker 1: seeing that as about a seventy chance or so something

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Speaker 1: like that. So a decent chance. And certainly, you know,

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Speaker 1: the e c B is in a very different situation

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Speaker 1: to the FED. The Fed is saying, you know, we've

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Speaker 1: got two restrictive now we can slow down, take a time,

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Speaker 1: take a look how much damage is being done to

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Speaker 1: the economy in Europe. There's still this strong sense of

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Speaker 1: urgency that they need to get ahead of the game

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Speaker 1: outter having been behind the game on inflation for too long.

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Speaker 1: So that makes fifty basis points likely, although not cemented,

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Speaker 1: and there's going to be similar sorts of calculations you're

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Speaker 1: going forward. The pricing is at the moment about a

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Speaker 1: seventy percent chance for a fifty basis point high this

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Speaker 1: coming meeting, and then probably similar or maybe a little

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Speaker 1: bit less for another fifty basis points in March. So

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Speaker 1: you've got that hawkish bias there, But this is the ECB,

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Speaker 1: after all, it's not an easy beast to wrangle getting

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Speaker 1: the consensus that's needed. There's a lot of factors going on,

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Speaker 1: and although there is that economic resilience, Europe is still

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Speaker 1: facing a slowdown. So it's a very tricky one. Yeah.

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Speaker 1: Absolutely not an easy beast to wrangle. I like that

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Speaker 1: the Fed is in a blackout period, but there's still

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Speaker 1: some data that comes out this week that we should consider.

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Speaker 1: What are you watching out for. Well, I mean we

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Speaker 1: do get the core PC, the flight and the University

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Speaker 1: of Michigan survey which includes inflation expectations here, those those

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Speaker 1: are coming up. Those are important data points in me

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Speaker 1: In a lot of ways, though, you sort of feel

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Speaker 1: as though the main data points have been out there

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Speaker 1: and by now it would be a surprise if the

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Speaker 1: Fed didn't go down to a twenty five basis point hike.

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Speaker 1: They've had plenty of opportunity to kick back against market

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Speaker 1: pricing that they would do that, and instead that they've

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Speaker 1: kind of encouraged it. Partly. Perhaps they may be trying to,

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Speaker 1: as it were, work with the market and say, well, yes,

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Speaker 1: it seems reasonable to us to slow the basis points.

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Speaker 1: But as while I was saying over the weekend, but

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Speaker 1: the last week, um, they expect to do more than

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Speaker 1: one basis point hike, and they expect to keep rates

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Speaker 1: higher for quite some time. So both of those messages

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Speaker 1: are the ones that they've had problems getting across to

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Speaker 1: the market. So you know, we also have the pros

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Speaker 1: back for further disappointment or further turmoil if that the

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Speaker 1: market gets too far ahead of itself in thinking FED

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Speaker 1: is going to be an easy touch in terms of

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Speaker 1: looking elsewhere, we have minutes in the Bank of Japan

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Speaker 1: meeting in December, some interesting nuggets in there around discussions

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Speaker 1: over easy yeeld care of control. Yes, indeed, and in

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Speaker 1: some ways it's a little bit Unfortunately took longer for

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Speaker 1: the minutes to come out then it did for us

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Speaker 1: to get to another meeting, because in the minutes they

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Speaker 1: were talking about the need to make clear that this

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Speaker 1: tweak doesn't recommend, it doesn't represent a policy change. Now,

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Speaker 1: Governor Corona did say words that affect immediately after the

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Speaker 1: December meeting, but still a lot of investors went into

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Speaker 1: this month's meeting thinking that what had been a policy change,

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Speaker 1: as it were, that it had been a hawkish move

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Speaker 1: to double the yield cap, and the beer Jay ended

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Speaker 1: up very rudely disabusing them of that notion by bringing

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Speaker 1: out a range of measures to slap the yield back down.

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Speaker 1: It's falling for a fourth straight day to day. This

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Speaker 1: is Bloomberg Daybreak Europe, your morning brief on the stories

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Speaker 1: listen live each morning on London D A B Radio,

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