1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:09,360 --> 00:00:12,160 Speaker 2: This is Bloomberg day Break Weekend, our global look ahead 3 00:00:12,160 --> 00:00:14,120 Speaker 2: at the top stories in the coming week from our 4 00:00:14,200 --> 00:00:17,400 Speaker 2: Daybreak anchors all around the world. Straight ahead on the program, 5 00:00:17,400 --> 00:00:20,240 Speaker 2: and look at some key inflation data in the US 6 00:00:20,280 --> 00:00:23,640 Speaker 2: what it could mean for FED policy moving forward, Plus 7 00:00:23,640 --> 00:00:26,520 Speaker 2: a look at earnings from the computer software Giant Oracle. 8 00:00:26,800 --> 00:00:28,440 Speaker 2: I'm Tom Busby in New York. 9 00:00:28,600 --> 00:00:31,480 Speaker 1: I'm Caroline Hebcker in London, where we're following europe Central 10 00:00:31,480 --> 00:00:35,000 Speaker 1: Bank as it navigates an unprecedented time in the region. 11 00:00:35,440 --> 00:00:38,400 Speaker 3: I'm Paul Allen in Sydney, looking at next week's IBA 12 00:00:38,560 --> 00:00:41,839 Speaker 3: decision and Australia's social media band for teams. 13 00:00:43,159 --> 00:00:47,360 Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:47,400 --> 00:00:51,280 Speaker 4: eleven three on New York, Bloomberg ninety nine to one, Washington, DC, 15 00:00:51,720 --> 00:00:56,600 Speaker 4: Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius 16 00:00:56,760 --> 00:00:59,720 Speaker 4: XM one twenty one, and around the world on Bloomberg 17 00:00:59,760 --> 00:01:02,360 Speaker 4: Radio and the Bloomberg Business. 18 00:01:02,120 --> 00:01:08,360 Speaker 2: At Good day to you. I'm Tom Busby, and we 19 00:01:08,400 --> 00:01:10,720 Speaker 2: begin today's program with a look at some key inflation 20 00:01:10,880 --> 00:01:13,640 Speaker 2: data on the heels of a big bounce back in 21 00:01:13,760 --> 00:01:18,000 Speaker 2: US job creation last month. November's Consumer Price Index out 22 00:01:18,040 --> 00:01:20,840 Speaker 2: on Wednesday eight thirty am Wall Street Time. The Producer 23 00:01:20,880 --> 00:01:23,840 Speaker 2: Price Index for last month comes one day later. For 24 00:01:23,959 --> 00:01:26,880 Speaker 2: more on what to expect, we're joined by Edward Harrison, 25 00:01:26,959 --> 00:01:30,680 Speaker 2: author of Bloomberg's Everything Risk newsletter. Edward, thank you so 26 00:01:30,760 --> 00:01:31,600 Speaker 2: much for being here. 27 00:01:31,959 --> 00:01:32,640 Speaker 4: Good to talk to you. 28 00:01:32,720 --> 00:01:33,479 Speaker 5: Tom Well. 29 00:01:33,480 --> 00:01:36,360 Speaker 2: Now, inflation has come a long way down over the 30 00:01:36,360 --> 00:01:39,000 Speaker 2: past two years, still has a long way to go 31 00:01:39,080 --> 00:01:41,800 Speaker 2: before hitting the Fed's long established target of two percent. 32 00:01:41,920 --> 00:01:46,120 Speaker 2: So what are you expecting to see in October's CPI 33 00:01:46,280 --> 00:01:47,560 Speaker 2: number this week? 34 00:01:47,600 --> 00:01:51,000 Speaker 5: We're expecting to see the year over year number for 35 00:01:51,120 --> 00:01:54,680 Speaker 5: CPI tick up ever so slightly to two point seven 36 00:01:54,680 --> 00:01:57,800 Speaker 5: percent from two point six percent. And when you look 37 00:01:57,800 --> 00:02:00,520 Speaker 5: at the core number, taking out food and energy, the 38 00:02:00,960 --> 00:02:03,760 Speaker 5: expectation is it's going to be roughly the same as 39 00:02:03,800 --> 00:02:06,560 Speaker 5: it was last month, which is three point three percent. 40 00:02:07,040 --> 00:02:11,240 Speaker 5: Both of those are based on zero point three percent 41 00:02:11,480 --> 00:02:16,200 Speaker 5: rises on a monthly basis. Now, obviously two point six 42 00:02:16,280 --> 00:02:19,600 Speaker 5: percent going up to two seven and three three are 43 00:02:19,760 --> 00:02:25,480 Speaker 5: not that great numbers, but it's still coming down enough 44 00:02:26,280 --> 00:02:30,800 Speaker 5: that I expect that the FED will still cut interest 45 00:02:30,880 --> 00:02:36,160 Speaker 5: rates in December if the data come out as expected. 46 00:02:36,040 --> 00:02:38,600 Speaker 2: Wow, only about half a Wall Street thinks is with 47 00:02:38,680 --> 00:02:41,200 Speaker 2: you on that one, But there is a lot of hope. Well, 48 00:02:41,280 --> 00:02:44,200 Speaker 2: let's talk more about those numbers and what's behind this 49 00:02:44,240 --> 00:02:47,240 Speaker 2: stubbornly high inflation, because, as you said, two point seven 50 00:02:47,400 --> 00:02:51,079 Speaker 2: percent year over year overall, it's good, it's not great. 51 00:02:51,160 --> 00:02:53,640 Speaker 2: So what are the big factors that are keeping inflation 52 00:02:53,760 --> 00:02:54,520 Speaker 2: so high? 53 00:02:54,639 --> 00:02:57,799 Speaker 5: Well, it's definitely not food and energy, right, because if 54 00:02:57,800 --> 00:03:00,799 Speaker 5: you you know, without food and energy, three point three 55 00:03:00,840 --> 00:03:04,639 Speaker 5: percent versus two point seven percent a year on year 56 00:03:05,440 --> 00:03:08,760 Speaker 5: with food and energy, Really it's about you know, core 57 00:03:08,919 --> 00:03:12,960 Speaker 5: services and housing in particular. Those are the things that 58 00:03:13,120 --> 00:03:16,960 Speaker 5: are still you know sticky, and you know sticky at 59 00:03:17,000 --> 00:03:20,320 Speaker 5: a level of over three percent. And so what that 60 00:03:20,400 --> 00:03:24,240 Speaker 5: means is is that as twenty twenty five develops, you know, 61 00:03:24,320 --> 00:03:27,040 Speaker 5: the cuts that we've been seeing at every single meeting 62 00:03:27,080 --> 00:03:29,000 Speaker 5: by the FED are going to come to an end 63 00:03:29,520 --> 00:03:32,440 Speaker 5: in about a week's time. You know, the week after this, 64 00:03:32,880 --> 00:03:35,880 Speaker 5: we're gonna see the FEDS dot plot and they're in 65 00:03:35,920 --> 00:03:38,440 Speaker 5: that it's going to tell us what they expect, how 66 00:03:38,440 --> 00:03:41,920 Speaker 5: many rate cuts that they expect. The market is now 67 00:03:41,960 --> 00:03:46,880 Speaker 5: pricing in actually about three rate cuts for twenty twenty five. 68 00:03:47,200 --> 00:03:49,840 Speaker 5: So let's just see what the what the Fed says 69 00:03:49,880 --> 00:03:52,640 Speaker 5: when they come out with their data a week from now. 70 00:03:52,840 --> 00:03:56,240 Speaker 2: Yeah, that's a biggie. This is a meeting December seventeenth, eighteenth, 71 00:03:56,880 --> 00:03:59,640 Speaker 2: the big decision, you know, to either hold steady or 72 00:03:59,720 --> 00:04:03,200 Speaker 2: as you expect another quarter percent, you know, twenty five 73 00:04:03,240 --> 00:04:04,080 Speaker 2: basis point cut. 74 00:04:04,120 --> 00:04:06,320 Speaker 5: Is that what you're thinking, Yeah, you know, and that's 75 00:04:06,400 --> 00:04:09,040 Speaker 5: that's pretty much in line with the market. We can 76 00:04:09,040 --> 00:04:11,800 Speaker 5: talk a little bit about the jobs numbers that we 77 00:04:11,840 --> 00:04:14,760 Speaker 5: saw last week, but on the basis of the jobs numbers, 78 00:04:14,800 --> 00:04:19,200 Speaker 5: immediately after the jobs numbers came out, the swaps market, 79 00:04:19,279 --> 00:04:22,880 Speaker 5: which shows what the market is expecting the Fed to do, 80 00:04:23,440 --> 00:04:26,560 Speaker 5: went from like, you know, sixty percent odds of a 81 00:04:26,640 --> 00:04:30,320 Speaker 5: cut to over eighty percent odds of a cut. So 82 00:04:30,600 --> 00:04:32,960 Speaker 5: this number, the CPI number, this is going to be 83 00:04:33,000 --> 00:04:35,120 Speaker 5: the one that either solidifies it or makes it a 84 00:04:35,160 --> 00:04:39,320 Speaker 5: little bit murky. But word eighty percent, So that says 85 00:04:39,400 --> 00:04:43,320 Speaker 5: that likely we're going to move towards eighty five ninety 86 00:04:43,320 --> 00:04:46,119 Speaker 5: percent if the number is in line with expectations. 87 00:04:46,279 --> 00:04:49,159 Speaker 2: Wow, so that jobs report really did a number you 88 00:04:49,200 --> 00:04:51,280 Speaker 2: think for the FED, Well, let's talk about it. Two 89 00:04:51,360 --> 00:04:54,120 Speaker 2: hundred and twenty seven thousand jobs added. It looks like 90 00:04:54,400 --> 00:04:58,039 Speaker 2: maybe we've exercised the ghost of those devastating strikes, a 91 00:04:58,080 --> 00:05:02,360 Speaker 2: couple of really bad hurricanes. I mean, is this, Hey, 92 00:05:02,360 --> 00:05:05,400 Speaker 2: we're back in business now after that dismal October number. 93 00:05:05,640 --> 00:05:08,120 Speaker 5: Well, you know, it does seem that way to me. 94 00:05:08,520 --> 00:05:11,720 Speaker 5: The number, the two twenty seven number comes with fifty 95 00:05:11,760 --> 00:05:15,280 Speaker 5: six thousand of net revision upward from the last two 96 00:05:15,320 --> 00:05:18,440 Speaker 5: months before that, and now we're at about one hundred 97 00:05:18,480 --> 00:05:22,839 Speaker 5: and seventy some thousand a month over the last three months. 98 00:05:22,839 --> 00:05:26,920 Speaker 5: That's up by fifty thousand. So you might think that 99 00:05:27,000 --> 00:05:30,120 Speaker 5: those numbers would make the market spooked, but actually it 100 00:05:30,279 --> 00:05:32,960 Speaker 5: wasn't because if you look at the household survey, the 101 00:05:33,040 --> 00:05:36,920 Speaker 5: unemployment rate went up, So the unemployment rate went up 102 00:05:36,920 --> 00:05:39,400 Speaker 5: from four point one to four point two percent. And 103 00:05:39,440 --> 00:05:42,640 Speaker 5: if you've listened to what these FED speakers are saying, 104 00:05:42,720 --> 00:05:45,560 Speaker 5: Chris Waller is one that I was thinking about. Another 105 00:05:45,600 --> 00:05:50,040 Speaker 5: one is the Atlanta Fed Raphael Bostic. They're basically saying, 106 00:05:50,320 --> 00:05:54,159 Speaker 5: you know, unless the data are really terrible, we want 107 00:05:54,200 --> 00:05:57,600 Speaker 5: to have a preventive cut going forward. Same thing from 108 00:05:57,640 --> 00:06:01,280 Speaker 5: Austin Gouldsby of the Chicago Fed, they're all saying that, 109 00:06:01,360 --> 00:06:03,880 Speaker 5: you know, this meeting, yes we're going to give the cut, 110 00:06:03,960 --> 00:06:08,000 Speaker 5: the market's priced it in, but then going forward we're 111 00:06:08,040 --> 00:06:09,840 Speaker 5: going to be a little more circumspect. 112 00:06:10,000 --> 00:06:13,159 Speaker 2: So three rate cuts in a row to end twenty 113 00:06:13,200 --> 00:06:17,080 Speaker 2: twenty four year thinking, but twenty twenty five definitely dialing 114 00:06:17,200 --> 00:06:21,320 Speaker 2: back on that more aggressive rate cut strategy exactly. 115 00:06:21,360 --> 00:06:24,200 Speaker 5: And you know, a lot of this, remember, is about 116 00:06:24,600 --> 00:06:27,800 Speaker 5: the real interest rate. That is is that as inflation 117 00:06:27,920 --> 00:06:32,040 Speaker 5: comes down, the FED is saying, unless we bring rates down, 118 00:06:32,520 --> 00:06:35,719 Speaker 5: then it's going to be restrictive, not necessarily for those 119 00:06:36,040 --> 00:06:40,040 Speaker 5: companies that can go out and borrow money in the 120 00:06:40,080 --> 00:06:43,400 Speaker 5: capital markets, but for small businesses that are getting their 121 00:06:43,520 --> 00:06:46,680 Speaker 5: loans based upon these rates. We really need to bring 122 00:06:46,720 --> 00:06:50,040 Speaker 5: them down in order to be less restrictive for those companies. 123 00:06:50,440 --> 00:06:54,320 Speaker 2: Well in November, CPI data out there coming Wednesday, PPI 124 00:06:54,440 --> 00:06:57,960 Speaker 2: on Thursday, and our thanks to Edward Harrison, he's the 125 00:06:58,000 --> 00:07:01,560 Speaker 2: author of Bloomberg's Everything Risk newsletter. We turned out to 126 00:07:01,680 --> 00:07:04,960 Speaker 2: earnings from one of the biggest names in technology, software 127 00:07:05,000 --> 00:07:08,359 Speaker 2: giant Oracle putting out its Q two results on Monday. 128 00:07:08,760 --> 00:07:12,960 Speaker 2: Will the artificial intelligence boom continue to fuel oracles year 129 00:07:13,080 --> 00:07:15,440 Speaker 2: long rally and for more we're joined by Ana rog 130 00:07:15,480 --> 00:07:19,840 Speaker 2: Rana Bloomberg Intelligence Technology Analysts. Ana Rok, thank you so 131 00:07:19,920 --> 00:07:24,240 Speaker 2: much for joining us. Shares of Oracle have skyrocketed this year, 132 00:07:24,320 --> 00:07:27,760 Speaker 2: mostly on a cloud infrastructure services. So what do you 133 00:07:27,840 --> 00:07:30,440 Speaker 2: expect to see in this earnings report on Monday. 134 00:07:30,760 --> 00:07:33,239 Speaker 6: Yeah, I think we'll listen to more of the same 135 00:07:33,360 --> 00:07:37,240 Speaker 6: in a sense that cloud infrastructure revenue should continue to 136 00:07:37,280 --> 00:07:39,720 Speaker 6: go up. The question is going to be by how 137 00:07:39,840 --> 00:07:43,480 Speaker 6: much and whether the revenue recognition is being held. 138 00:07:43,280 --> 00:07:47,520 Speaker 7: Back by the shortage of supply, which is, you know, 139 00:07:47,560 --> 00:07:50,840 Speaker 7: the GPUs that are sold by Nvidia, whether they're able 140 00:07:50,840 --> 00:07:53,560 Speaker 7: to get their hands and do enough of them. 141 00:07:53,720 --> 00:07:55,760 Speaker 6: So when you look at somebody like an Oracle, it 142 00:07:55,800 --> 00:07:58,400 Speaker 6: has a massive backlog right now, and we'll get to 143 00:07:58,440 --> 00:08:01,280 Speaker 6: that in a second how it has them backlog. But 144 00:08:01,360 --> 00:08:04,000 Speaker 6: the problem a lot of these cloud infrastructure providers are 145 00:08:04,040 --> 00:08:07,720 Speaker 6: facing is their data center capacity as well as their 146 00:08:07,760 --> 00:08:11,920 Speaker 6: hardware capacity is still a bottleneck, which is people are 147 00:08:11,920 --> 00:08:14,280 Speaker 6: sending work for them, but they're not able to fulfill 148 00:08:14,280 --> 00:08:17,920 Speaker 6: that demand. And that's where Oracle also is at this point. 149 00:08:18,120 --> 00:08:23,200 Speaker 2: So a shortage of GPUs stressed data centers. But now 150 00:08:23,280 --> 00:08:27,160 Speaker 2: Oracle has built more data centers, hasn't it, including plans 151 00:08:27,280 --> 00:08:29,760 Speaker 2: for a nuclear powered one. It is just go go 152 00:08:29,760 --> 00:08:32,160 Speaker 2: go for them. Are they keeping up? Are they going 153 00:08:32,200 --> 00:08:33,040 Speaker 2: to meet demands? 154 00:08:33,520 --> 00:08:37,439 Speaker 6: See? The thing is, it's unlike just you know, buying GPUs, 155 00:08:37,520 --> 00:08:41,079 Speaker 6: which is also in a shortage. Data centers take time. 156 00:08:41,240 --> 00:08:44,000 Speaker 6: You just can't spin up a data center overnight. It 157 00:08:44,080 --> 00:08:47,079 Speaker 6: takes a few years to build one. What companies are 158 00:08:47,080 --> 00:08:49,880 Speaker 6: doing right now is taking their role data centers and 159 00:08:50,600 --> 00:08:55,680 Speaker 6: retrofitting them with new equipment, new cooling technology, new GPUs, 160 00:08:55,840 --> 00:08:58,680 Speaker 6: new hardware in order to run some of these workloads, 161 00:08:59,000 --> 00:09:01,400 Speaker 6: but in order to create the new one, that takes time. 162 00:09:01,720 --> 00:09:04,760 Speaker 6: And actually that's what's benefiting Oracle in one way because 163 00:09:05,559 --> 00:09:08,880 Speaker 6: Microsoft has this relationship with open Ai, and open Ai 164 00:09:09,080 --> 00:09:13,760 Speaker 6: is sending more and more workloads to Microsoft's cloud product, 165 00:09:13,800 --> 00:09:17,720 Speaker 6: which is called Asher, and Microsoft is seeing that shortage. 166 00:09:17,800 --> 00:09:21,040 Speaker 6: So guess what it's doing. It's tapping into Oracle and saying, hey, 167 00:09:21,080 --> 00:09:24,160 Speaker 6: can you be my subcontractor and I can lease into 168 00:09:24,240 --> 00:09:27,360 Speaker 6: your data center and run some of the workloads over there. 169 00:09:27,800 --> 00:09:30,400 Speaker 6: And that's really how you know the Oracles laughing about 170 00:09:30,400 --> 00:09:34,160 Speaker 6: it because it's having to service it's one of its 171 00:09:34,160 --> 00:09:37,480 Speaker 6: bigger competitors and partners, so it's getting a lot of 172 00:09:37,480 --> 00:09:40,800 Speaker 6: work from Microsoft also at this point. So that is 173 00:09:41,240 --> 00:09:43,280 Speaker 6: that is the big story for Oracle, then we think 174 00:09:43,320 --> 00:09:45,680 Speaker 6: it is going to be the big thing for at 175 00:09:45,800 --> 00:09:47,200 Speaker 6: least the next couple of years. 176 00:09:47,480 --> 00:09:50,640 Speaker 2: Well, Oracle not only Microsoft, It also had deals with Google, 177 00:09:50,800 --> 00:09:53,000 Speaker 2: and just a few months ago a big deal with 178 00:09:53,080 --> 00:09:57,280 Speaker 2: Amazon Web Services was exactly correct, Yeah, exactly, yeah, tell 179 00:09:57,320 --> 00:09:58,480 Speaker 2: me about all those deals. 180 00:09:58,760 --> 00:10:01,080 Speaker 6: It is the same deal. Basically. What it is saying 181 00:10:01,200 --> 00:10:04,600 Speaker 6: is if you get a command or a workload and 182 00:10:04,800 --> 00:10:07,640 Speaker 6: you don't have capacity to do it, send it my way. 183 00:10:07,760 --> 00:10:10,560 Speaker 6: I will be your subcontractor and you can run it 184 00:10:10,600 --> 00:10:12,839 Speaker 6: in my data center and you will pay me for it. 185 00:10:13,040 --> 00:10:16,240 Speaker 6: So it's a good thing for Oracle that it has 186 00:10:16,320 --> 00:10:19,320 Speaker 6: this capacity, it has this data center. And as I 187 00:10:19,360 --> 00:10:22,880 Speaker 6: said in principle, the only thing that's holding back all 188 00:10:22,920 --> 00:10:25,760 Speaker 6: of them is that there's a shortage of GPUs and 189 00:10:25,800 --> 00:10:29,440 Speaker 6: the processing capacity. There is another thing that's helping Oracle. Frankly, 190 00:10:29,640 --> 00:10:32,439 Speaker 6: I talked about one thing as an outsourced for the 191 00:10:32,800 --> 00:10:35,800 Speaker 6: three companies that we mentioned, but there is another element 192 00:10:35,920 --> 00:10:38,240 Speaker 6: that a lot of startups are also going to Oracle 193 00:10:38,280 --> 00:10:40,200 Speaker 6: and saying, you know what, I just want to go 194 00:10:40,280 --> 00:10:43,920 Speaker 6: out and experiment on this cloud infrastructure, and Oracle is 195 00:10:43,960 --> 00:10:46,559 Speaker 6: giving them a good deal giving them, you know, because 196 00:10:46,600 --> 00:10:49,800 Speaker 6: remember from a market size point of view, Oracle's cloud 197 00:10:49,880 --> 00:10:53,000 Speaker 6: infrastructure is fourth in size. The biggest one is Amazon, 198 00:10:53,240 --> 00:10:58,360 Speaker 6: then Microsoft, then Google, and Oracle, given its large wallet, 199 00:10:58,880 --> 00:11:01,920 Speaker 6: if we can fund set billion dollars of capital expenditures, 200 00:11:02,440 --> 00:11:04,760 Speaker 6: is now, you know, in our view, the fourth biggest 201 00:11:05,040 --> 00:11:06,319 Speaker 6: cloud data center company. 202 00:11:06,520 --> 00:11:10,160 Speaker 2: But is the cloud data center becoming more not just 203 00:11:10,200 --> 00:11:13,120 Speaker 2: the management what it used to be, becoming more of 204 00:11:13,160 --> 00:11:14,439 Speaker 2: the cash cow for Oracle? 205 00:11:14,760 --> 00:11:16,400 Speaker 6: Yeah, it is. Oh no, no, it's growing very well. 206 00:11:16,480 --> 00:11:19,679 Speaker 6: It's growing somewhere north of forty percent. I think Consensus 207 00:11:19,679 --> 00:11:23,359 Speaker 6: has that product to grow by fifty percent this particular 208 00:11:24,040 --> 00:11:26,720 Speaker 6: quarter that's going to be on Monday. So from a 209 00:11:26,840 --> 00:11:28,800 Speaker 6: revenue point of view, they are gaining. 210 00:11:28,520 --> 00:11:30,080 Speaker 3: As much market share as possible. 211 00:11:30,440 --> 00:11:33,800 Speaker 6: Whether they are making enough money, that's okay for them, 212 00:11:33,920 --> 00:11:36,960 Speaker 6: because it's okay to take to buy it at a 213 00:11:37,320 --> 00:11:41,080 Speaker 6: cheaper price or taking even of a big loss on 214 00:11:41,160 --> 00:11:43,600 Speaker 6: that end, only because they have some other products that 215 00:11:43,600 --> 00:11:47,360 Speaker 6: are highly profitable. Their old business of core database is 216 00:11:47,600 --> 00:11:52,679 Speaker 6: very profitable. They have other applications, cloud applications, on HR 217 00:11:52,960 --> 00:11:56,160 Speaker 6: customer service management. They are very profitable. So it has 218 00:11:56,559 --> 00:11:58,720 Speaker 6: is it is really one of the most profitable software 219 00:11:58,720 --> 00:12:01,120 Speaker 6: companies out there. It's okay for them to lose a 220 00:12:01,120 --> 00:12:03,640 Speaker 6: little bit money on the infrastructure and service. I don't 221 00:12:03,640 --> 00:12:07,640 Speaker 6: think they lose money there because since those financials are 222 00:12:07,640 --> 00:12:10,440 Speaker 6: not publicly available, even if they make less money on 223 00:12:10,480 --> 00:12:13,720 Speaker 6: that compared to the database, that doesn't matter because in 224 00:12:13,760 --> 00:12:17,480 Speaker 6: totality it's adding to the overall revenue base of the company. 225 00:12:17,679 --> 00:12:19,959 Speaker 2: Well, a lot to watch for Q two results from 226 00:12:20,000 --> 00:12:23,280 Speaker 2: Oracle out on Monday. Our thanks to Anna rod Rana 227 00:12:23,400 --> 00:12:27,079 Speaker 2: Bloomberg Intelligence and Technology Analysts, and coming up on Bloomberg 228 00:12:27,160 --> 00:12:29,720 Speaker 2: day Break weekend, we'll look ahead to Europe's Central Bank 229 00:12:29,760 --> 00:12:33,440 Speaker 2: decision as it navigates an unprecedented time in the region. 230 00:12:33,880 --> 00:12:47,560 Speaker 2: I'm Tom Busby, and this is Bloomberg. This is Bloomberg 231 00:12:47,600 --> 00:12:49,640 Speaker 2: day Break Weekend, our global look ahead at the top 232 00:12:49,679 --> 00:12:52,679 Speaker 2: stories for investors in the coming week. I'm Tom Busby 233 00:12:52,720 --> 00:12:55,040 Speaker 2: in New York. Up later in our program, we look 234 00:12:55,080 --> 00:12:57,840 Speaker 2: ahead to an important policy decision from the Preserve Bank 235 00:12:57,840 --> 00:13:02,320 Speaker 2: of Australia. But first JUCHS policymakers convening this week to 236 00:13:02,320 --> 00:13:05,360 Speaker 2: make their last interest rate decision of twenty twenty five. 237 00:13:05,760 --> 00:13:10,360 Speaker 2: That's against a backdrop dominated by political uncertainty amid governmental 238 00:13:10,440 --> 00:13:13,560 Speaker 2: challenges in France and looming US tariffs. Could the rate 239 00:13:13,600 --> 00:13:17,880 Speaker 2: path ahead be more slippery than first anticipated? Well, for more, 240 00:13:18,000 --> 00:13:20,480 Speaker 2: let's go to London and bring in Bloomberg daybreak, europe 241 00:13:20,480 --> 00:13:22,479 Speaker 2: Banker Caroline hepger. 242 00:13:22,480 --> 00:13:25,160 Speaker 1: Tom the European Central Bank is likely to cut interest 243 00:13:25,240 --> 00:13:29,400 Speaker 1: rates again at its December meeting. Policymakers made debates a 244 00:13:29,440 --> 00:13:33,800 Speaker 1: bigger than usual move, but comments from individuals suggests that 245 00:13:33,880 --> 00:13:37,280 Speaker 1: they will proceed with caution for now. Speaking during a 246 00:13:37,320 --> 00:13:41,319 Speaker 1: recent television interview, the Bank of Latvia, Governor Martin's Kazakhs 247 00:13:41,679 --> 00:13:44,920 Speaker 1: said that uncertainty is still very high, with a number 248 00:13:44,920 --> 00:13:50,000 Speaker 1: of complex geopolitical risks facing Europe. Governing Council member Joachim 249 00:13:50,120 --> 00:13:55,400 Speaker 1: Nagel has suggested interest rates should converge only slowly towards 250 00:13:55,600 --> 00:13:59,360 Speaker 1: neutral territory, so support for a fifty basis point move 251 00:13:59,520 --> 00:14:04,160 Speaker 1: does seem limited. Layer onto that, the political crisis in France, 252 00:14:04,240 --> 00:14:08,040 Speaker 1: one of the bloc's biggest members after Michelle Barnier, became 253 00:14:08,080 --> 00:14:12,120 Speaker 1: the shortest serving prime minister in French history, his government 254 00:14:12,200 --> 00:14:16,160 Speaker 1: collapse following a vote of no confidence, crucially before a 255 00:14:16,240 --> 00:14:21,280 Speaker 1: budget could be agreed in parliament. The fiscal unpredictability of 256 00:14:21,320 --> 00:14:25,320 Speaker 1: Europe is something ECB policymakers will have to consider their 257 00:14:25,400 --> 00:14:29,600 Speaker 1: upcoming meeting Bloomberg. Stephen Cowl and I discussed this with 258 00:14:29,720 --> 00:14:33,440 Speaker 1: Maria Demerzis, who is program leader at the Conference Board 259 00:14:33,680 --> 00:14:38,040 Speaker 1: and professor of Economic policy at the European University Institute. 260 00:14:38,200 --> 00:14:41,800 Speaker 8: Well, I mean, the first thing is that we need 261 00:14:41,800 --> 00:14:45,080 Speaker 8: to understand who will govern France, and the issue is 262 00:14:45,160 --> 00:14:47,880 Speaker 8: that President mccran will not be able is not allowed 263 00:14:47,880 --> 00:14:50,880 Speaker 8: constitution to call elections again, given that he's called elections 264 00:14:50,880 --> 00:14:53,400 Speaker 8: back in June. So that means that for one year 265 00:14:53,920 --> 00:14:57,400 Speaker 8: from since last June, that means that till next June, 266 00:14:57,400 --> 00:15:00,520 Speaker 8: we will have to have a technocratic government, another prime 267 00:15:00,520 --> 00:15:04,280 Speaker 8: minister or a technocratic government that actually does the government 268 00:15:04,360 --> 00:15:06,480 Speaker 8: business right, and that means that we will have to 269 00:15:06,480 --> 00:15:10,320 Speaker 8: operate with the current budget and political decisions will not 270 00:15:10,480 --> 00:15:13,280 Speaker 8: be a Difficultulican decisions will not be made. So I 271 00:15:13,320 --> 00:15:16,600 Speaker 8: think that is what I foresee till next Shuar, when Persson. 272 00:15:16,640 --> 00:15:19,120 Speaker 8: Macron will have the chance again to call elections. 273 00:15:19,200 --> 00:15:21,960 Speaker 1: Italy may be used to having a technocratic government, France 274 00:15:22,000 --> 00:15:26,160 Speaker 1: certainly is not. And the budget deficit is the main challenge. 275 00:15:26,240 --> 00:15:28,560 Speaker 1: It is expected to run at six point one percent 276 00:15:28,600 --> 00:15:31,960 Speaker 1: this year. How significant an issue is this going to 277 00:15:31,960 --> 00:15:35,960 Speaker 1: be for Europe to have this continued uncertainty and instability 278 00:15:35,960 --> 00:15:36,480 Speaker 1: in France. 279 00:15:36,680 --> 00:15:39,400 Speaker 8: Indeed, it's not good, and in fact, the reason why 280 00:15:39,400 --> 00:15:41,520 Speaker 8: we are in this position here is indeed because Prime 281 00:15:41,520 --> 00:15:44,520 Speaker 8: Minister Mariner was trying to put a budget forward that 282 00:15:44,560 --> 00:15:46,200 Speaker 8: it was going to take us back in the right 283 00:15:46,360 --> 00:15:49,200 Speaker 8: direction and in compliance with the European rules that have 284 00:15:49,280 --> 00:15:52,400 Speaker 8: come into operations since September. All of this is postponed. 285 00:15:52,440 --> 00:15:55,760 Speaker 8: Now will have to wait for the next government of 286 00:15:55,760 --> 00:15:57,760 Speaker 8: French government to actually do the job, but it will 287 00:15:57,760 --> 00:15:59,760 Speaker 8: have to be done, and the European Commission will be 288 00:15:59,800 --> 00:16:02,720 Speaker 8: what very closely. I remind you that France is under 289 00:16:02,760 --> 00:16:06,640 Speaker 8: the excessive deficit procedure, which is the corrective arm of 290 00:16:06,640 --> 00:16:10,400 Speaker 8: the monitoring process of the European Union, and that means 291 00:16:10,440 --> 00:16:13,040 Speaker 8: that the European Commission will be watching very carefully. 292 00:16:12,840 --> 00:16:17,440 Speaker 9: What happens with the EU Commission's reaction to this if 293 00:16:17,480 --> 00:16:19,840 Speaker 9: we do end up in this situation where they're rerunning 294 00:16:19,840 --> 00:16:21,720 Speaker 9: the current budget, which means the effort is going to 295 00:16:21,720 --> 00:16:24,600 Speaker 9: be far above what had been submitted and approved by 296 00:16:24,600 --> 00:16:26,920 Speaker 9: the Commission in the pre budget rules. I mean, what 297 00:16:26,960 --> 00:16:29,080 Speaker 9: are the next steps of the Commission can take If 298 00:16:29,120 --> 00:16:32,160 Speaker 9: they're on this temporary holding pattern for the next potentially 299 00:16:32,200 --> 00:16:33,160 Speaker 9: six months. 300 00:16:33,040 --> 00:16:36,240 Speaker 8: Progressively, it can put off enormous pressure on whatever French 301 00:16:36,320 --> 00:16:40,440 Speaker 8: government is in place to actually do the job. In principal, 302 00:16:40,440 --> 00:16:44,240 Speaker 8: he could also impose fines on the country. In practice, 303 00:16:44,240 --> 00:16:46,360 Speaker 8: this has never happened, and I don't think it will happen, 304 00:16:46,400 --> 00:16:50,520 Speaker 8: given also what we call the French exceptionalism. But I 305 00:16:50,600 --> 00:16:53,280 Speaker 8: think the pressure for France to deliver is going to 306 00:16:53,280 --> 00:16:56,360 Speaker 8: recommend any is going to come also from other countries 307 00:16:57,040 --> 00:16:59,640 Speaker 8: because there is in fact there's good reasons. What we 308 00:16:59,680 --> 00:17:01,600 Speaker 8: have is rules in the European Union, and if a 309 00:17:01,640 --> 00:17:04,879 Speaker 8: country like France, which is big, actually violates the rules, 310 00:17:04,920 --> 00:17:07,359 Speaker 8: this isn't good either for the history of the rules 311 00:17:07,800 --> 00:17:09,240 Speaker 8: or indeed for the European economy. 312 00:17:09,400 --> 00:17:12,199 Speaker 1: The Conference Board keeps close tabs on the views of 313 00:17:12,280 --> 00:17:15,359 Speaker 1: CEOs within Europe, looking at the stock market as a 314 00:17:15,359 --> 00:17:19,960 Speaker 1: measure there obviously European stocks, particularly French equities, have been suffering, 315 00:17:20,720 --> 00:17:22,520 Speaker 1: but we've seen a bit of a bounce in recent 316 00:17:22,680 --> 00:17:25,840 Speaker 1: days and Germany's let to DAX has done actually recently 317 00:17:25,920 --> 00:17:29,280 Speaker 1: well year to date this year, which seems quite strange 318 00:17:29,280 --> 00:17:33,919 Speaker 1: given the pessimism that CEOs do have on European economic growth. 319 00:17:34,200 --> 00:17:36,600 Speaker 8: Indeed, the CEOs actually tell us that they're in a 320 00:17:36,840 --> 00:17:39,080 Speaker 8: recent service that we've done, they tell us that they 321 00:17:39,119 --> 00:17:42,800 Speaker 8: actually prefer to operate outside Europe because I think conditions 322 00:17:42,920 --> 00:17:45,840 Speaker 8: European economic conditions in Europe are not are very favorable. 323 00:17:45,920 --> 00:17:48,600 Speaker 8: It's consistent also with the Charun account numbers that we 324 00:17:48,680 --> 00:17:52,360 Speaker 8: see business conditions in Europe, you know they could be improved, 325 00:17:52,359 --> 00:17:55,159 Speaker 8: and this is exactly what drag you. Of course, the 326 00:17:55,200 --> 00:17:57,640 Speaker 8: mission of Draguar was very much to find the policies 327 00:17:57,640 --> 00:18:00,200 Speaker 8: that we need to put in place for this to change. 328 00:18:00,560 --> 00:18:04,440 Speaker 9: Is there actually any political currency though, to implement any 329 00:18:04,480 --> 00:18:06,919 Speaker 9: of those recommendations. I mean, we saw the commission point 330 00:18:07,040 --> 00:18:09,439 Speaker 9: to the Dragy Report and the other reports that have 331 00:18:09,440 --> 00:18:11,880 Speaker 9: been done on competitiveness in the European Union as well. 332 00:18:11,920 --> 00:18:14,719 Speaker 9: But realistically, if the national capitals aren't kind of up 333 00:18:14,760 --> 00:18:17,879 Speaker 9: there and pushing it, and particularly France and Germany, nothing's 334 00:18:17,880 --> 00:18:18,680 Speaker 9: really going to get done. 335 00:18:18,840 --> 00:18:21,480 Speaker 8: It is true that we need France and Germany to 336 00:18:21,480 --> 00:18:26,120 Speaker 8: act as as Germany as in a coalition of change. 337 00:18:26,240 --> 00:18:28,640 Speaker 8: We need them, and you know, with both actually countries 338 00:18:28,640 --> 00:18:32,919 Speaker 8: now in political instability, things won't move very fast. However, 339 00:18:32,920 --> 00:18:34,719 Speaker 8: what I will say is that that the CEOs are 340 00:18:34,720 --> 00:18:36,640 Speaker 8: telling us that if there's one change that they won't 341 00:18:36,720 --> 00:18:40,600 Speaker 8: happen is simplification of the regulation. This is actually the 342 00:18:40,680 --> 00:18:42,879 Speaker 8: top number one priority that they tell us is this, 343 00:18:43,480 --> 00:18:45,879 Speaker 8: And what we saw actually the European Commission has actually 344 00:18:45,920 --> 00:18:49,560 Speaker 8: put the point of the agenda very high in the priorities. 345 00:18:49,880 --> 00:18:52,160 Speaker 8: So I would be very curious to see how they 346 00:18:52,320 --> 00:18:53,240 Speaker 8: aim to implement this. 347 00:18:53,520 --> 00:18:55,359 Speaker 9: Yeah, I mean I suppose speed is also the other 348 00:18:55,480 --> 00:18:57,320 Speaker 9: question involved in this, as well as how fast they 349 00:18:57,440 --> 00:18:58,320 Speaker 9: be able to do something. 350 00:18:58,359 --> 00:18:59,800 Speaker 2: I wonder does something. 351 00:18:59,480 --> 00:19:01,520 Speaker 9: Like the twin three e g. In this idea of 352 00:19:01,520 --> 00:19:04,840 Speaker 9: creating a separate corporate structure that could operate across member states. 353 00:19:04,960 --> 00:19:07,000 Speaker 9: I mean that's the sort of idea that does that 354 00:19:07,000 --> 00:19:09,560 Speaker 9: get CEO as excited. Is that a policy they could 355 00:19:09,600 --> 00:19:10,320 Speaker 9: get on board with? 356 00:19:10,920 --> 00:19:13,680 Speaker 8: Yes, But like I say, I mean the CEO's understand 357 00:19:14,200 --> 00:19:16,800 Speaker 8: how slowly europe movies. The twenty eighth regime is an 358 00:19:16,840 --> 00:19:18,560 Speaker 8: idea that has been around for a very long time, 359 00:19:18,760 --> 00:19:22,160 Speaker 8: particularly with regards to the creation of the Capital Markets Union. 360 00:19:22,760 --> 00:19:24,960 Speaker 8: We've made very little progress in this respect. I think 361 00:19:25,000 --> 00:19:29,399 Speaker 8: CEOs want tangible change, and this type of change, the 362 00:19:29,400 --> 00:19:32,119 Speaker 8: certification of regulation, is something that can, in principle happen. 363 00:19:32,119 --> 00:19:35,200 Speaker 8: It doesn't require money, it doesn't require much agreement. Of course, 364 00:19:35,240 --> 00:19:38,159 Speaker 8: it does require parliamentary approval, but everybody agrees on this, 365 00:19:38,200 --> 00:19:39,840 Speaker 8: So I think this is one of the low hanging fruits. 366 00:19:39,840 --> 00:19:42,479 Speaker 8: So if we get ourselves to implement it, we can 367 00:19:42,520 --> 00:19:43,359 Speaker 8: actually make change. 368 00:19:43,400 --> 00:19:43,720 Speaker 6: Yeah. 369 00:19:43,960 --> 00:19:46,920 Speaker 1: My thanks to Maria Demerzis, who is program leader at 370 00:19:46,920 --> 00:19:50,280 Speaker 1: the Conference Board and professor of Economic policy at the 371 00:19:50,359 --> 00:19:55,320 Speaker 1: European University Institute, someone who spends time in both Brussels 372 00:19:55,400 --> 00:19:59,800 Speaker 1: and Florence. So, after the failure of Barnier's administration, which 373 00:20:00,040 --> 00:20:04,800 Speaker 1: injects uncertainty and perhaps more austerity into France, how will 374 00:20:04,840 --> 00:20:09,120 Speaker 1: the ECB choose to rebuild is something I asked Bloomberg's 375 00:20:09,240 --> 00:20:12,720 Speaker 1: senior reporter covering the Central bank yall around out. 376 00:20:13,160 --> 00:20:17,480 Speaker 10: I think France in itself is another source of uncertainty, 377 00:20:17,560 --> 00:20:22,359 Speaker 10: of course, and there are already plenty other sources out there, 378 00:20:22,400 --> 00:20:24,000 Speaker 10: and I'm sure we will get a chance to talk 379 00:20:24,000 --> 00:20:29,040 Speaker 10: about that when it comes to the decision itself in 380 00:20:29,440 --> 00:20:33,119 Speaker 10: the coming days. That of course will will not be 381 00:20:33,640 --> 00:20:36,920 Speaker 10: affected by what we're seeing in France, but of course 382 00:20:36,960 --> 00:20:41,080 Speaker 10: the the economic outlook very much will both the French economy, 383 00:20:41,640 --> 00:20:44,439 Speaker 10: which of course is the is the Eurozone's second largest, 384 00:20:44,440 --> 00:20:47,560 Speaker 10: and the Eurozone economy itself. They're not doing very well 385 00:20:47,560 --> 00:20:52,240 Speaker 10: at the moment. Pmis are deep in contractionary territory, and 386 00:20:53,200 --> 00:20:58,240 Speaker 10: uncertainty of this caliber weighs on consumption, it weighs on investment, 387 00:20:58,560 --> 00:21:02,200 Speaker 10: It stands in the way of of reforms. The absence 388 00:21:02,200 --> 00:21:05,240 Speaker 10: of a government in France, of course, means fiscal policy 389 00:21:05,320 --> 00:21:09,480 Speaker 10: is very much a wildcard, and also an important voice 390 00:21:09,520 --> 00:21:12,360 Speaker 10: is missing at the European level, So a lot more 391 00:21:12,440 --> 00:21:16,119 Speaker 10: uncertainty to you know, in the future. To be aware 392 00:21:16,160 --> 00:21:19,040 Speaker 10: of that will change the way the EACP looks at 393 00:21:19,080 --> 00:21:22,000 Speaker 10: the economy and the economic outlook and the risks associated 394 00:21:22,000 --> 00:21:24,480 Speaker 10: to that outlook, But not much of an impact on 395 00:21:24,520 --> 00:21:25,359 Speaker 10: the decision itself. 396 00:21:25,359 --> 00:21:28,200 Speaker 1: I would say, yeah, okay, but the possibility of an 397 00:21:28,200 --> 00:21:31,240 Speaker 1: economic drag perhaps further down the road. So, in terms 398 00:21:31,240 --> 00:21:35,480 Speaker 1: of this upcoming meeting, do we expect twenty five basis 399 00:21:35,520 --> 00:21:38,320 Speaker 1: points or could we see a fifty basis point rate reduction? 400 00:21:38,760 --> 00:21:41,640 Speaker 10: Yeah? I think twenty five is what I would bet 401 00:21:41,680 --> 00:21:47,439 Speaker 10: my money on. Fifty. It's been talked about, if you 402 00:21:47,480 --> 00:21:50,879 Speaker 10: asked me, it was never a real option. It was 403 00:21:50,960 --> 00:21:54,680 Speaker 10: part of the speculation that the ECB might go down 404 00:21:54,720 --> 00:21:59,720 Speaker 10: this route after pmis were significantly weaker than expected, after 405 00:21:59,760 --> 00:22:05,679 Speaker 10: inflation didn't pick up as strongly as people might have expected. 406 00:22:06,320 --> 00:22:09,720 Speaker 10: But even the market has come around too prising No, 407 00:22:10,480 --> 00:22:13,080 Speaker 10: but not significantly more than a quarter point cut for 408 00:22:14,720 --> 00:22:20,359 Speaker 10: Thursday's meeting. So I would say twenty five is the way, 409 00:22:20,440 --> 00:22:21,960 Speaker 10: you know, the way to position. 410 00:22:22,560 --> 00:22:22,960 Speaker 7: Yeah. 411 00:22:23,040 --> 00:22:25,520 Speaker 1: In terms of the risks though in Europe there are 412 00:22:25,920 --> 00:22:30,280 Speaker 1: a number, aren't there? Not just the geopolitical uncertainty in Ukraine, 413 00:22:30,680 --> 00:22:35,919 Speaker 1: there's also Georgia and looming possibly tariffs from an incoming 414 00:22:36,000 --> 00:22:40,760 Speaker 1: Trump administration. How will these factor into the interest rate 415 00:22:40,800 --> 00:22:43,360 Speaker 1: decision process? So many risks, so. 416 00:22:43,400 --> 00:22:47,200 Speaker 10: Many risks indeed, and all of that makes it very 417 00:22:47,200 --> 00:22:52,560 Speaker 10: difficult to know what's ahead. We'll get new forecasts, which 418 00:22:52,680 --> 00:22:55,520 Speaker 10: is going to be very exciting. We'll get a chance 419 00:22:55,560 --> 00:22:58,840 Speaker 10: to look all the way into twenty twenty seven. But 420 00:22:58,960 --> 00:23:03,200 Speaker 10: of course, you know that's that's a set of forecasts, builds, 421 00:23:03,320 --> 00:23:06,439 Speaker 10: build on assumptions. We don't know yet what's going to 422 00:23:06,480 --> 00:23:11,240 Speaker 10: come on the terraff front. We don't know how the 423 00:23:12,280 --> 00:23:15,119 Speaker 10: warn Ukraine is going to pan out, which will have 424 00:23:15,160 --> 00:23:19,320 Speaker 10: an impact on, you know, how how Europe deals with 425 00:23:19,640 --> 00:23:24,919 Speaker 10: its own defense, It might impact energy overall uncertainty, of course, 426 00:23:25,280 --> 00:23:28,640 Speaker 10: so the risks and and the uncertainty around those forecasts 427 00:23:28,720 --> 00:23:32,439 Speaker 10: are just enormous, which makes it very very difficult for 428 00:23:32,520 --> 00:23:37,359 Speaker 10: policy makers to you know, say, with with with certainty, 429 00:23:38,080 --> 00:23:40,840 Speaker 10: what's needed, where to go. And and that's you know, 430 00:23:40,920 --> 00:23:44,159 Speaker 10: a big part behind why policy makers say we are 431 00:23:44,240 --> 00:23:47,320 Speaker 10: data dependent. We take a very gradual approach. Here, we're 432 00:23:47,320 --> 00:23:50,000 Speaker 10: going step by step, and then we look around and 433 00:23:50,200 --> 00:23:55,120 Speaker 10: see how our actions, our policy affect what's actually happening 434 00:23:55,119 --> 00:23:56,399 Speaker 10: in the economy. 435 00:23:57,040 --> 00:24:00,640 Speaker 1: In terms of the data. As you say, the pressures 436 00:24:00,640 --> 00:24:04,240 Speaker 1: on the economy, the possibility of stagnation really across Europe 437 00:24:04,840 --> 00:24:08,920 Speaker 1: is quite significant. The pressures on inflation, though, have also 438 00:24:08,960 --> 00:24:12,240 Speaker 1: been coming down. Just took us through the inflation picture 439 00:24:12,280 --> 00:24:13,600 Speaker 1: now for Europe, we. 440 00:24:13,640 --> 00:24:17,040 Speaker 10: Have seen a small pickup in headline inflation that was 441 00:24:17,160 --> 00:24:20,199 Speaker 10: very much in line with expectations, so that was not 442 00:24:20,280 --> 00:24:25,280 Speaker 10: a big surprise there. The surprise really was underneath the 443 00:24:25,320 --> 00:24:29,639 Speaker 10: headline number, so we had core inflation holding steady at 444 00:24:29,640 --> 00:24:33,000 Speaker 10: two point seven percent. It's obviously still still above that 445 00:24:33,160 --> 00:24:36,760 Speaker 10: two percent target, but it was weaker than expected. We 446 00:24:36,840 --> 00:24:42,080 Speaker 10: are seeing a slowdown in services prices finally from a 447 00:24:42,160 --> 00:24:44,520 Speaker 10: very high level. Of course, we're still closer to four 448 00:24:44,520 --> 00:24:48,520 Speaker 10: percent than two percent on that indicator, but we're seeing 449 00:24:48,560 --> 00:24:52,640 Speaker 10: movement as well. And what is going to be very 450 00:24:52,640 --> 00:24:56,359 Speaker 10: interesting on the inflation side is a look at the 451 00:24:56,840 --> 00:25:00,480 Speaker 10: quarterly profile of the new projections I mentioned, and that 452 00:25:00,680 --> 00:25:05,080 Speaker 10: will tell us you know something about how confident they 453 00:25:05,119 --> 00:25:07,120 Speaker 10: will be in cutting interest rates further. 454 00:25:07,560 --> 00:25:10,159 Speaker 1: My thanks to Bloomberg's Janna Randau, and we will have 455 00:25:10,280 --> 00:25:13,920 Speaker 1: full coverage of that final ECB meeting of the year 456 00:25:14,320 --> 00:25:18,399 Speaker 1: with a Bloomberg survey showing that ECB watches now expect 457 00:25:18,400 --> 00:25:21,399 Speaker 1: the Central Bank to cut a quarter point at every 458 00:25:21,480 --> 00:25:25,679 Speaker 1: policy meeting through to June, taking the deposit rate at 459 00:25:25,680 --> 00:25:28,560 Speaker 1: the ECB to two percent. I'm Caroline Hepge here in 460 00:25:28,600 --> 00:25:31,000 Speaker 1: London and you can catch us every weekday morning for 461 00:25:31,040 --> 00:25:33,840 Speaker 1: Bloomberg Daybreak you're at beginning at six am in London. 462 00:25:34,080 --> 00:25:35,560 Speaker 1: That's one am on Wall Street. 463 00:25:35,720 --> 00:25:38,640 Speaker 2: Tom, Thank you, Caroline. And coming up on Bloomberg day 464 00:25:38,640 --> 00:25:42,960 Speaker 2: Break Weekend, we'll discuss Australia's social media band for teenagers. 465 00:25:43,320 --> 00:25:57,560 Speaker 2: I'm Tom Busby and this is Bloomberg. This is Bloomberg 466 00:25:57,640 --> 00:26:00,000 Speaker 2: day Break Weekend, our global look ahead at the top store, 467 00:26:00,000 --> 00:26:02,760 Speaker 2: worries for investors in the coming week. I'm Tom Busby 468 00:26:02,760 --> 00:26:05,960 Speaker 2: in New York. Australia's household spending rose eight tens of 469 00:26:06,119 --> 00:26:09,960 Speaker 2: percent in October, exceeding estimates. This as the Reserve Bank 470 00:26:10,000 --> 00:26:13,440 Speaker 2: of Australia is set to issue a policy decision this week. 471 00:26:13,760 --> 00:26:16,560 Speaker 2: Bloomberg's Paul Allen is in for Doug Chrisner on the 472 00:26:16,680 --> 00:26:19,800 Speaker 2: Daybreak Asia podcast, and he has more from Sydney. 473 00:26:20,160 --> 00:26:23,879 Speaker 3: Tom. That pickup in Australia's October retail sales reflects a 474 00:26:23,920 --> 00:26:27,560 Speaker 3: boost to household spending capacity. The data probably gives the 475 00:26:27,640 --> 00:26:30,119 Speaker 3: RBA more room to hold rates for the time being 476 00:26:30,359 --> 00:26:33,200 Speaker 3: while it waits for inflation to call. That's according to 477 00:26:33,280 --> 00:26:37,280 Speaker 3: James McIntyre, who covers Australia and New Zealand for Bloomberg Economics, 478 00:26:37,320 --> 00:26:40,800 Speaker 3: and he joins me now in our Sydney radio studio. So, 479 00:26:40,960 --> 00:26:44,040 Speaker 3: James has been more than a year now. The next 480 00:26:44,119 --> 00:26:46,440 Speaker 3: move from the RBA is likely to be down. 481 00:26:46,600 --> 00:26:49,760 Speaker 11: But when so twelve months, that's one of the longer 482 00:26:49,800 --> 00:26:53,080 Speaker 11: holds that they've had. We have been thinking that they 483 00:26:53,119 --> 00:26:55,359 Speaker 11: should be cutting already, but we've been wrong on that. 484 00:26:55,440 --> 00:26:58,280 Speaker 11: And why we've been wrong as we've been surprised by 485 00:26:58,280 --> 00:27:01,119 Speaker 11: how strong population growth is adding that extra demand of 486 00:27:01,160 --> 00:27:04,080 Speaker 11: the economy. It looks like that's phasing off. So the 487 00:27:04,160 --> 00:27:07,280 Speaker 11: question is is there going to be enough evidence in 488 00:27:07,359 --> 00:27:09,960 Speaker 11: the first quarter of the year for the RBA to 489 00:27:10,000 --> 00:27:13,240 Speaker 11: begin cutting in in February or March. My view is 490 00:27:13,240 --> 00:27:15,880 Speaker 11: that will at least be seeing that first move by May. 491 00:27:16,160 --> 00:27:18,240 Speaker 11: So it's a question this year of whether there is 492 00:27:18,720 --> 00:27:21,080 Speaker 11: kind of seventy five or maybe at a stretch one 493 00:27:21,119 --> 00:27:23,840 Speaker 11: hundred bases points of cuts from the RBA next year. 494 00:27:24,160 --> 00:27:26,160 Speaker 11: At the moment, the data is pretty strong, it's looking 495 00:27:26,240 --> 00:27:28,200 Speaker 11: like we might be on that May start. 496 00:27:28,880 --> 00:27:31,280 Speaker 3: You're not the only one who thinks that the RBA 497 00:27:31,440 --> 00:27:33,800 Speaker 3: probably should have gone by now. We had some commentary 498 00:27:33,800 --> 00:27:36,879 Speaker 3: from Goldman Sachs saying that the RBA has no longer 499 00:27:37,040 --> 00:27:39,480 Speaker 3: got an argument to keep rates high and continuing to 500 00:27:39,560 --> 00:27:43,840 Speaker 3: keep them high is going to inflict unnecessary economic damage. Now, 501 00:27:44,359 --> 00:27:47,600 Speaker 3: the RBA was slow to titan and it got criticized 502 00:27:47,640 --> 00:27:50,520 Speaker 3: for that. Now it's slow to ease. Are we seeing 503 00:27:50,560 --> 00:27:54,040 Speaker 3: the formation the genesis of another policy mistake here? 504 00:27:54,400 --> 00:27:56,480 Speaker 11: Well, I guess we need to kind of look at 505 00:27:56,760 --> 00:27:59,760 Speaker 11: what are they trying to achieve and why would they 506 00:27:59,760 --> 00:28:03,280 Speaker 11: cut And I think it's really the labor market that's 507 00:28:03,560 --> 00:28:07,159 Speaker 11: that's been the surprise. If we hadn't had that population surge, 508 00:28:07,160 --> 00:28:09,280 Speaker 11: we would have had a lot less demand in the economy, 509 00:28:09,680 --> 00:28:13,000 Speaker 11: taking a lot more wind out of the pricing pressure, 510 00:28:13,720 --> 00:28:16,399 Speaker 11: especially with demand and the retail sector and the. 511 00:28:16,400 --> 00:28:16,879 Speaker 10: Like with that. 512 00:28:17,600 --> 00:28:19,879 Speaker 11: But what's that demand? Being there in the economy has 513 00:28:19,920 --> 00:28:22,200 Speaker 11: meant that labor market's been there and it's been quite 514 00:28:22,240 --> 00:28:24,600 Speaker 11: strong as well. And we'd been expecting the unemployment rate 515 00:28:24,640 --> 00:28:29,600 Speaker 11: to be marching well towards five percent by now by 516 00:28:29,640 --> 00:28:32,280 Speaker 11: this time, giving the RBA a clear cut reason to 517 00:28:32,359 --> 00:28:34,760 Speaker 11: lower rates. But at four point one percent, that's what 518 00:28:34,800 --> 00:28:38,080 Speaker 11: the RBA is clinging to. But the very narrow path 519 00:28:38,120 --> 00:28:39,880 Speaker 11: and this has been the retric from the RBA wanting 520 00:28:39,920 --> 00:28:43,520 Speaker 11: to maintain those labor market gains, staying on the narrow path, 521 00:28:43,600 --> 00:28:46,840 Speaker 11: keeping that unemployment rate down. It's very very dicey about 522 00:28:46,840 --> 00:28:50,560 Speaker 11: how long you hold because you can overcorrect, and you know, 523 00:28:50,600 --> 00:28:53,120 Speaker 11: we're seeing that in New Zealand and the repercussions of 524 00:28:53,160 --> 00:28:56,880 Speaker 11: that in Australia. Interestingly is that with that New Zealand 525 00:28:56,920 --> 00:28:59,920 Speaker 11: labor market being so terrible, key wes have started flood 526 00:29:00,120 --> 00:29:03,920 Speaker 11: across the border here to Australia and adding to the 527 00:29:04,000 --> 00:29:06,480 Speaker 11: RBA's delay and problems. 528 00:29:06,840 --> 00:29:09,440 Speaker 3: And of course there's no restrictions on the number of 529 00:29:09,440 --> 00:29:11,880 Speaker 3: New Zealanders that can come over either thanks to their 530 00:29:11,880 --> 00:29:16,240 Speaker 3: closer Economic Relations agreement. But immigrations a really important part 531 00:29:16,240 --> 00:29:18,400 Speaker 3: of the story here and it impacts the property story 532 00:29:18,400 --> 00:29:19,760 Speaker 3: as well, and I want to get to that in 533 00:29:19,800 --> 00:29:22,480 Speaker 3: a minute. But the other part of the dual mandate is, 534 00:29:22,520 --> 00:29:26,280 Speaker 3: of course inflation. Now it's coming down. Is there a 535 00:29:26,360 --> 00:29:27,840 Speaker 3: risk of undershooting here? 536 00:29:28,000 --> 00:29:31,040 Speaker 11: Well, look, in my view, yes, that's where the balance 537 00:29:31,040 --> 00:29:34,240 Speaker 11: of risks lies. So the RBA is still the underlying 538 00:29:34,240 --> 00:29:37,160 Speaker 11: inflation has been coming down. It's a little bit slower 539 00:29:37,160 --> 00:29:40,680 Speaker 11: than the headline inflation. Some of the reasons that there 540 00:29:40,800 --> 00:29:44,400 Speaker 11: is this embedded stickiness. Every country's got little different quirks 541 00:29:44,400 --> 00:29:46,880 Speaker 11: with their inflation, and some of the Australian story at 542 00:29:46,880 --> 00:29:50,200 Speaker 11: the moment is a bunch of these administered prices and 543 00:29:50,240 --> 00:29:54,160 Speaker 11: some of them are basically goods that go up by 544 00:29:54,240 --> 00:29:56,440 Speaker 11: inflation the year before. So we've got a bit of 545 00:29:56,480 --> 00:29:59,239 Speaker 11: an echo in some of the inflation right now, and 546 00:29:59,240 --> 00:30:01,640 Speaker 11: that low inflation that we're getting as a result of 547 00:30:01,680 --> 00:30:05,719 Speaker 11: the government's steps to provide cost of living subsidies and 548 00:30:05,760 --> 00:30:08,840 Speaker 11: really putting downward pressure on the headline inflation. Those are 549 00:30:08,880 --> 00:30:11,600 Speaker 11: things that will be anchored pretty low next year, but 550 00:30:11,680 --> 00:30:13,880 Speaker 11: we could see that undershoot all of that would be 551 00:30:13,920 --> 00:30:17,040 Speaker 11: a recipe for things going a little bit more south, 552 00:30:17,080 --> 00:30:19,880 Speaker 11: a little bit quicker than the RBA is expecting, and 553 00:30:19,920 --> 00:30:22,480 Speaker 11: pulling inflation down with it. That's where that balance of 554 00:30:22,560 --> 00:30:23,040 Speaker 11: risk lies. 555 00:30:23,080 --> 00:30:23,600 Speaker 10: In my view. 556 00:30:23,720 --> 00:30:26,240 Speaker 3: Growth's really been struggling, hasn't it. I think Jim Chalmers, 557 00:30:26,240 --> 00:30:28,120 Speaker 3: the Treasurer, said of it in the second quarter it 558 00:30:28,160 --> 00:30:31,840 Speaker 3: was only government spending that kept the country out of recession. 559 00:30:32,240 --> 00:30:33,600 Speaker 3: How great is recession risk? 560 00:30:33,760 --> 00:30:34,000 Speaker 5: Yeah? 561 00:30:34,000 --> 00:30:35,640 Speaker 11: Well, I mean if you look in per capita terms, 562 00:30:35,680 --> 00:30:38,560 Speaker 11: we've been in recession for more than eighteen months and 563 00:30:38,640 --> 00:30:42,720 Speaker 11: that's likely to continue. In the GDP figures that we'll 564 00:30:42,760 --> 00:30:46,560 Speaker 11: see for the third quarter, and it's unlikely I think 565 00:30:46,600 --> 00:30:50,480 Speaker 11: that we do see that per capita GDP growth actually 566 00:30:50,560 --> 00:30:55,000 Speaker 11: beginning to pull up until that's unlikely until we get 567 00:30:55,080 --> 00:30:57,680 Speaker 11: rate cuts helping to kind of relieve some of the 568 00:30:57,720 --> 00:31:02,520 Speaker 11: tension on consumers there. So yeah, it's a very icy outcome, 569 00:31:02,600 --> 00:31:05,440 Speaker 11: very low growth, very weak growth, which means that the 570 00:31:05,480 --> 00:31:08,080 Speaker 11: labor market outcomes that we're getting some of those are 571 00:31:08,080 --> 00:31:11,440 Speaker 11: reflecting previous growth, and the labor market ahead the outlook 572 00:31:11,520 --> 00:31:14,080 Speaker 11: isn't as strong. And I think that's that very very 573 00:31:14,120 --> 00:31:16,400 Speaker 11: delicate balance, that narrow path that the RBA is trying 574 00:31:16,400 --> 00:31:16,800 Speaker 11: to three. 575 00:31:16,680 --> 00:31:19,480 Speaker 3: To hear, James will just finish up on the property 576 00:31:19,520 --> 00:31:22,760 Speaker 3: story because it has the great Australian barbecue stopper, if 577 00:31:22,760 --> 00:31:25,560 Speaker 3: you like, and so rate sensitive as well. And we've 578 00:31:25,600 --> 00:31:29,640 Speaker 3: seen property prices cooling in Australia and that's a relative term. 579 00:31:29,680 --> 00:31:32,920 Speaker 3: I mean, we're still a nosebleed territory here. But once 580 00:31:33,040 --> 00:31:36,320 Speaker 3: the easing cycle does begin from the RBA, are we 581 00:31:36,400 --> 00:31:38,720 Speaker 3: going to just see prices reigniting. 582 00:31:39,080 --> 00:31:39,360 Speaker 5: Well. 583 00:31:39,400 --> 00:31:42,920 Speaker 11: There has been really a tale of two stories within 584 00:31:42,960 --> 00:31:46,720 Speaker 11: the property market. The Melbourne property market's been very weak 585 00:31:46,800 --> 00:31:49,720 Speaker 11: for quite some time now. Sydney's starting to show those 586 00:31:49,720 --> 00:31:52,160 Speaker 11: signs of weakness, especially at the top end, and that's 587 00:31:52,160 --> 00:31:55,760 Speaker 11: where the borrowing capacity hit from high rates is really 588 00:31:55,840 --> 00:31:59,720 Speaker 11: leaving its mark. Those markets are likely to be ones 589 00:32:00,120 --> 00:32:02,640 Speaker 11: could see quite a bit of upside if we do 590 00:32:02,720 --> 00:32:08,800 Speaker 11: get a strong rates download rate cycle, But fifty seventy 591 00:32:08,800 --> 00:32:11,720 Speaker 11: five or one hundred basis points over the year it's 592 00:32:11,760 --> 00:32:13,720 Speaker 11: not going to give you that bigger punch on boring 593 00:32:13,720 --> 00:32:19,400 Speaker 11: capacity and property price boost as other rate cut cycles 594 00:32:19,480 --> 00:32:21,680 Speaker 11: might have. So I think we might be relying on 595 00:32:21,760 --> 00:32:23,840 Speaker 11: sentiment and those two bigger cities, which are the most 596 00:32:23,840 --> 00:32:26,440 Speaker 11: important ones for the Australian economy, a bit of a 597 00:32:26,480 --> 00:32:30,240 Speaker 11: sentiment improvement as rate cuts maybe helping propel things a 598 00:32:30,240 --> 00:32:30,920 Speaker 11: bit next year. 599 00:32:31,080 --> 00:32:33,800 Speaker 3: All right, thanks James, as the RBA keeps us waiting. 600 00:32:33,920 --> 00:32:37,400 Speaker 3: That is James McIntyre, who covers Australia for Bloomberg Economics. 601 00:32:37,720 --> 00:32:41,960 Speaker 3: We move next to Australia's sweeping social media ban. Last week, 602 00:32:42,000 --> 00:32:45,480 Speaker 3: Canberra past a law banning teams under sixteen from platforms 603 00:32:45,560 --> 00:32:48,360 Speaker 3: like Facebook and tech Talk. It marks one of the 604 00:32:48,440 --> 00:32:51,760 Speaker 3: toughest crackdowns on these social media companies, and the move 605 00:32:51,840 --> 00:32:56,040 Speaker 3: is sending shock waves through the industry worldwide. Bloomberg's Angus 606 00:32:56,040 --> 00:32:59,760 Speaker 3: Swickley joins me now for a deeper dive. So, Angus 607 00:33:00,120 --> 00:33:02,880 Speaker 3: key among this new law, as parents are going to 608 00:33:02,920 --> 00:33:05,280 Speaker 3: be responsible for enforcing this band it's going to be 609 00:33:05,320 --> 00:33:07,800 Speaker 3: up to social media companies to do it at risk 610 00:33:07,880 --> 00:33:11,440 Speaker 3: of a thirty two million dollar US fine for non compliance. 611 00:33:12,040 --> 00:33:14,040 Speaker 3: How is this even going to work? I mean, you 612 00:33:14,080 --> 00:33:16,960 Speaker 3: can't could just find a way to get around this. 613 00:33:17,920 --> 00:33:21,760 Speaker 12: I think this is one of the big unanswered questions 614 00:33:22,160 --> 00:33:25,040 Speaker 12: sort of hanging over this legislation. You're right in the 615 00:33:25,840 --> 00:33:30,400 Speaker 12: law really does put the responsibility on the social platform 616 00:33:30,440 --> 00:33:33,280 Speaker 12: operators rather than the kids and even their parents. So 617 00:33:33,680 --> 00:33:39,520 Speaker 12: it's the operators like Facebook and Snapchat that must find 618 00:33:39,560 --> 00:33:44,160 Speaker 12: a way somehow to check the identity or the age 619 00:33:44,240 --> 00:33:48,360 Speaker 12: rather of the users without some kind of formal government 620 00:33:48,640 --> 00:33:52,800 Speaker 12: identification because that has also been ruled out. So one 621 00:33:52,840 --> 00:33:56,320 Speaker 12: of the weaknesses, if you like, when this law was 622 00:33:56,440 --> 00:34:00,480 Speaker 12: passed is that this technology doesn't really seem to exist 623 00:34:00,600 --> 00:34:04,760 Speaker 12: in any practical form yet at least. Yes, it's true 624 00:34:04,760 --> 00:34:07,120 Speaker 12: that the law does not come in to sort of 625 00:34:07,520 --> 00:34:10,879 Speaker 12: effect for another twelve months or so, but even then, 626 00:34:10,960 --> 00:34:14,120 Speaker 12: it's not quite clear whether the technology will be in 627 00:34:14,200 --> 00:34:18,960 Speaker 12: place even then, So, yeah, how are the kids going 628 00:34:19,040 --> 00:34:22,920 Speaker 12: to be checked? There are privacy concerns there, facial recognition 629 00:34:23,200 --> 00:34:26,279 Speaker 12: perhaps that doesn't seem to be up to speed yet, 630 00:34:26,400 --> 00:34:28,520 Speaker 12: So yes, that is one of the questions. 631 00:34:28,960 --> 00:34:31,960 Speaker 3: Yeah, I've seen other commentary around this, suggesting that you know, 632 00:34:32,000 --> 00:34:36,279 Speaker 3: even things like browsing history, online shopping behavior, whether or 633 00:34:36,320 --> 00:34:39,080 Speaker 3: not people have a MYGV account. These are all ways 634 00:34:39,200 --> 00:34:42,680 Speaker 3: that social media companies can detect whether or not a 635 00:34:42,800 --> 00:34:45,360 Speaker 3: user is likely to be of age. But it doesn't 636 00:34:45,400 --> 00:34:48,279 Speaker 3: really draw that definitive line in the sand, does it? 637 00:34:48,800 --> 00:34:51,120 Speaker 3: What a social media company saying about this. 638 00:34:51,760 --> 00:34:55,600 Speaker 12: As you'd expect, there has been a strong wave of 639 00:34:55,600 --> 00:34:59,600 Speaker 12: opposition to this legislation. I mean, this is a key demographic, 640 00:34:59,640 --> 00:35:05,160 Speaker 12: isn't it for social media platforms, teenagers, youths. They may 641 00:35:05,200 --> 00:35:09,720 Speaker 12: not be spenders at that age, but that they mature 642 00:35:09,760 --> 00:35:14,360 Speaker 12: into valuable customers, don't they, so that they want to 643 00:35:14,400 --> 00:35:18,600 Speaker 12: get their teeth into these users as it were. Having 644 00:35:18,640 --> 00:35:22,040 Speaker 12: said that, they do make some criticisms which which do 645 00:35:22,160 --> 00:35:25,200 Speaker 12: appear to hold some water, that they argue that the 646 00:35:25,480 --> 00:35:28,759 Speaker 12: law is sort of ignore as the practical side of 647 00:35:30,440 --> 00:35:35,719 Speaker 12: age verification technology, which you could argue is true. It's 648 00:35:35,960 --> 00:35:38,920 Speaker 12: it's been rushed, they say, which is also true. I 649 00:35:38,920 --> 00:35:42,200 Speaker 12: mean it was plowed through the parliament in a matter 650 00:35:42,239 --> 00:35:48,040 Speaker 12: of days, very little time for consultation, the platform operators argue, 651 00:35:48,600 --> 00:35:52,120 Speaker 12: and very little time for some inquiry as well. India 652 00:35:52,160 --> 00:35:54,840 Speaker 12: didn't even have time, it seems, to publish all the 653 00:35:54,840 --> 00:35:58,279 Speaker 12: submissions it had on this legislation. A lot of that 654 00:35:58,400 --> 00:36:02,560 Speaker 12: is driven by the terrible told social media inarguably takes. 655 00:36:02,960 --> 00:36:05,000 Speaker 3: Yeah, this has come about because of some of the 656 00:36:05,200 --> 00:36:06,720 Speaker 3: very sad stories out there. 657 00:36:06,840 --> 00:36:13,720 Speaker 12: That's right, and these are profoundly sad stories users teenagers 658 00:36:14,640 --> 00:36:19,480 Speaker 12: taking their own lives after spaces of bullying online, and 659 00:36:20,080 --> 00:36:22,160 Speaker 12: that is a key driver of this change. The question 660 00:36:22,400 --> 00:36:26,000 Speaker 12: is how do you address these problems without destroying the 661 00:36:26,040 --> 00:36:27,879 Speaker 12: benefits and that that's the problem. 662 00:36:27,560 --> 00:36:30,279 Speaker 3: Here, and some other confusing things about this. I mean 663 00:36:30,320 --> 00:36:35,239 Speaker 3: some platforms the suppliers do Facebook x TikTok, but others not, 664 00:36:35,480 --> 00:36:38,560 Speaker 3: such as What's Happened messaging platforms. And you know, it's 665 00:36:38,840 --> 00:36:42,040 Speaker 3: obvious that these sorts of problems like cyberbodying still take 666 00:36:42,080 --> 00:36:45,920 Speaker 3: place on places like What's Happened messaging platforms, But this 667 00:36:46,080 --> 00:36:49,080 Speaker 3: is being really closely watched by other countries as well. 668 00:36:49,400 --> 00:36:52,360 Speaker 3: Could we see similar laws coming into force around the 669 00:36:52,400 --> 00:36:53,520 Speaker 3: world in the coming months. 670 00:36:54,239 --> 00:36:56,920 Speaker 12: Yeah, this is interesting. I mean, if you look at 671 00:36:56,960 --> 00:37:00,600 Speaker 12: Australia's history, it's got form, hasn't it with big tech. 672 00:37:00,640 --> 00:37:04,399 Speaker 12: It's it's picked fights with big tech before, whether it's 673 00:37:04,719 --> 00:37:10,840 Speaker 12: X for you know, posting distressing material, whether it's Google 674 00:37:11,000 --> 00:37:14,240 Speaker 12: or Facebook for for not paying local publishers for news. 675 00:37:14,280 --> 00:37:18,560 Speaker 12: So it's shown a kind of punch, if you like, 676 00:37:18,680 --> 00:37:22,080 Speaker 12: for for taking on these these big companies from the 677 00:37:22,120 --> 00:37:24,680 Speaker 12: other side of the world that fights that the the 678 00:37:24,680 --> 00:37:27,000 Speaker 12: rest of the world has looked at before. And the 679 00:37:27,080 --> 00:37:30,920 Speaker 12: question is to what extent will this, you know, precedent 680 00:37:31,000 --> 00:37:34,279 Speaker 12: setting legislation be followed in other countries. Other countries have 681 00:37:34,360 --> 00:37:39,240 Speaker 12: tried to do similar things with mixed results. To my knowledge, 682 00:37:39,239 --> 00:37:41,760 Speaker 12: I don't think anyone's ever tried a blanket ban with 683 00:37:41,760 --> 00:37:44,759 Speaker 12: without parental permission for on the sixteens. You know, there 684 00:37:44,840 --> 00:37:49,160 Speaker 12: is legislation in other US states, for instance, that allow 685 00:37:49,320 --> 00:37:52,120 Speaker 12: used to use it if they're permission from parents, So 686 00:37:52,760 --> 00:37:56,560 Speaker 12: that this is a blunt tool. It's it's wide ranging 687 00:37:56,680 --> 00:38:00,000 Speaker 12: and all catching, and the question is will other government 688 00:38:00,960 --> 00:38:03,360 Speaker 12: look at the results and say, yeah, this is something 689 00:38:03,400 --> 00:38:06,120 Speaker 12: we want to do because it's proven to work, or 690 00:38:06,120 --> 00:38:08,839 Speaker 12: will they say this has proven to be ineffective. They're 691 00:38:08,880 --> 00:38:13,920 Speaker 12: just too many youths getting around this legislation, which inevitably 692 00:38:13,960 --> 00:38:14,440 Speaker 12: there will be some. 693 00:38:15,120 --> 00:38:18,400 Speaker 3: All right, Agus, thanks very much. That is Bloomberg's Angus Whitley, 694 00:38:18,440 --> 00:38:22,239 Speaker 3: who has been covering that sweeping social media ban for 695 00:38:22,760 --> 00:38:26,120 Speaker 3: teenagers under the age of sixteen in Australia. I'm Paul 696 00:38:26,120 --> 00:38:28,919 Speaker 3: Allen in for Doug Crisner this week. You can catch 697 00:38:29,000 --> 00:38:31,960 Speaker 3: him weekdays on the Daybreak Asia podcast, looking at the 698 00:38:31,960 --> 00:38:35,440 Speaker 3: top stories moving markets in the Asia Pacific. It's available 699 00:38:35,440 --> 00:38:39,480 Speaker 3: on Apple, Spotify or wherever you get your podcasts. Tom. 700 00:38:39,760 --> 00:38:42,000 Speaker 2: Thanks Paul, and that does it for this edition of 701 00:38:42,000 --> 00:38:44,839 Speaker 2: Bloomberg day Break Weekend. Join us again Monday morning at 702 00:38:44,840 --> 00:38:47,000 Speaker 2: five am Wall Street Time for the latest on markets 703 00:38:47,000 --> 00:38:49,160 Speaker 2: overseas and the news you need to start your day. 704 00:38:49,600 --> 00:38:52,560 Speaker 2: I'm Tom Busby. Stay with us. Top stories and global 705 00:38:52,600 --> 00:39:01,080 Speaker 2: business headlines are coming up right now.