Speaker 1: This is Bloomberg Daybreak you up for this Wednesday, the
Speaker 1: nineteenth of April in London.
Speaker 2: Coming up today, a double digit headache for the Bank
Speaker 2: of England. The UK's inflation rates stays red hot at
Speaker 2: ten point one percent.
Speaker 1: Seven hundred and eighty seven million dollars. Fox settles with
Speaker 1: Dominion over bogus claims that it rigged the twenty twenty
Speaker 1: presidential electure.
Speaker 2: All that glitters isn't Goldman the banks, traders miss out
Speaker 2: on Wall Streets, fixed income boom.
Speaker 3: Top investor details, planters split, HSBC, coinbase plots, a UK
Speaker 3: move and central London house prices take a big hit.
Speaker 3: Those of the stories we're looking at in today's papers.
Speaker 3: And I'm Leanne Gerns.
Speaker 4: Plus we're live at the Bloomberg New Economy Gatesway Europe
Speaker 4: in Ireland, where the ECB's Philip Blane has told us
Speaker 4: he expects another hike in May. I'm Stephen Carroll.
Speaker 5: That's all straight ahead on Bloomberg Daybreak Europe. The business
Speaker 5: news you need to start your day in just one
Speaker 5: fifteen minute podcast on Apple, Spotify, the Blueberg Business app
Speaker 5: and everywhere you get your podcasts.
Speaker 1: Go on for London and Caroline Hepka and Diana Edwards.
Speaker 2: You're listening to Daybreak Europe. That's get to our top stories.
Speaker 2: We start with UK inflation. It has once again defied
Speaker 2: analyst estimates, staying in double digit territory for another month.
Speaker 2: March CPI came in at ten point one percent year
Speaker 2: on year. That's above the estimate of nine point eight percent.
Speaker 2: Jane Foley, head of FX strategy at Rabobank, says the
Speaker 2: data will add to pressure on the Bank of England
Speaker 2: to continue its quickest cycle of interest rate increases in
Speaker 2: four decades.
Speaker 6: It's not just about May and whether or not we're
Speaker 6: going to get an interest rate hike then I think
Speaker 6: that's almost done and dusted already. Is whether or not
Speaker 6: we're going to have to see something else from the
Speaker 6: Bank of England after that, and it is our view
Speaker 6: that we could see two twenty five basis points news
Speaker 6: before the cycle is up in the UK.
Speaker 2: Jane Foley also told us that she viewed the figure
Speaker 2: as a disappointment rather than a surprise. This after the
Speaker 2: Prime Minister Rihi Souona made cutting inflation in half by
Speaker 2: the end of the year a key priority.
Speaker 1: Now Fox News has agreed to pay over three quarters
Speaker 1: of a billion dollars to settle a defamation lawsuit over
Speaker 1: the twenty twenty presidential elections. Dominion accused the USTv network
Speaker 1: of airing bogus claims that it rigged the election against
Speaker 1: Donald Trump. Here is Dominion CEO John Pulis.
Speaker 7: Fox has admitted to telling lies about Dominion that caused
Speaker 7: enormous damage to my company, our employees, and the customers
Speaker 7: that we serve.
Speaker 2: Nothing can ever make up for that.
Speaker 1: The settlement is about half of what the Dominion CEO
Speaker 1: was seeking, but it avoids a potentially embarrassing six week
Speaker 1: trial for Fox. Fox argued that its broadcasts were protected
Speaker 1: as free speech under the US First Amendment.
Speaker 2: Netflix miss Wall Street estimates after adding only one point
Speaker 2: seventy five million new customers in the first quarter, more
Speaker 2: from Bloomberg's Charlie Pellett.
Speaker 8: Investors were expecting two point four to one million new customers.
Speaker 8: Netflix also predicted it will generate lower sales and profit
Speaker 8: in the current quarter than what analysts had forecast. It
Speaker 8: sees new customers in the current period is roughly similar
Speaker 8: to the first quarter, and Netflix will begin cracking down
Speaker 8: this quarter on US viewers who share someone else's account,
Speaker 8: Predicting plans to charge such customers will boost growth in
Speaker 8: the second half of this year. In New York, Charlie
Speaker 8: Pellett Bloomberg Daybreak, Europe.
Speaker 1: Goldman Sachs traders have failed to capitalize on a fixing Compananza.
Speaker 1: The Wall Street JANT was the only major bank to
Speaker 1: post the decline in the division. The first quarter fixed
Speaker 1: income trading revenue dropped seventeen percent. Total revenue also fell
Speaker 1: short of analyst estimates, but CEO David Solomon says that
Speaker 1: the bank is well positioned for the future.
Speaker 9: As we figure today, it appears that the worst of
Speaker 9: the volatility is behind us. While it's impossible predict the
Speaker 9: exact form of market stress will take and we won't
Speaker 9: always execute perfectly, our risk management culture, strong liquidity, and
Speaker 9: robust capital position have allowed us to navigate a complex
Speaker 9: environment while also continuing to actively support our clients.
Speaker 1: Solomon says the events of the first quarter demonstrate the
Speaker 1: resilience of Goldman Sachs and US large financial institutions. Elsewhere
Speaker 1: on Wall Street, Bank of America reported earnings. Traders there
Speaker 1: saw a thirty percent jump in fixed income revenue for
Speaker 1: the quarter.
Speaker 2: The ECB's chief economist says he expects the Central Bank
Speaker 2: to raise rates at next month's meeting. Speaking exclusively to Bloomberg,
Speaker 2: Philip Lane said the size of the move will be
Speaker 2: dependent on data due in the coming week.
Speaker 7: Q one suggests we are seeing a reversal of the
Speaker 7: negative supply shocks that so dominated the Europan economy last year,
Speaker 7: so easing of bottlenecks, much lower gas prices. So what
Speaker 7: I would say from all of that is, as of
Speaker 7: now two weeks away, I think the baseline is that
Speaker 7: we should indeed increase interest rates in May.
Speaker 2: Philip Lane made the comments in an interview with our
Speaker 2: ahead of economic Stephanie Flanders at Bloomberg's inaugural New Economy
Speaker 2: Gateway Europe event in Ireland. Government SAX economists have now
Speaker 2: lifted their forecast for where ECB rates will settle and
Speaker 2: now see a terminal rate of three point seventy five percent.
Speaker 1: While speaking of policymakers, Federal Reserve Bank of Atlanta President
Speaker 1: Raphael Bostic says that he favors one more twenty five
Speaker 1: basis point a rate increase before holding at five percent.
Speaker 1: In the US. Speaking to CNBC, he said that there's
Speaker 1: more work to be done, but added that tighter credit
Speaker 1: conditions may take care of.
Speaker 6: Some of that.
Speaker 1: Speaking elsewhere, the Saint Louis FED President James Bullard is
Speaker 1: calling for two more rate hikes. He told Reuters he
Speaker 1: believes fears of a recession overblown. Bullard and Bostick don't
Speaker 1: have a vote on monetary policy this year, but all
Speaker 1: FED policymakers take part in rate discussions.
Speaker 2: Okay, those are our top stories now. Stephen Carroll is
Speaker 2: not in the studio with me this morning. You would
Speaker 2: have heard his voice at the top of the program,
Speaker 2: though he is with us in spirit. He is in
Speaker 2: Ireland for the Bloomberg New Economy Gateway Europe event. And Stephen,
Speaker 2: good morning to you. Where exactly are you? Not far
Speaker 2: from Dublin, I understand, no.
Speaker 4: About twenty kilometers away from the center of Dublin. I've
Speaker 4: exchanged our London radio studio for a forty six acres
Speaker 4: of parkland in an estate house that powers course. Yeah, yeah, exactly.
Speaker 4: It's a little bit more space, a little bit more scenic,
Speaker 4: I have to say too. We're in next to the
Speaker 4: Sugarloaf Mountain in Wicklow here, which is the Garden of Ireland.
Speaker 4: So we've had a very beautiful morning here so far,
Speaker 4: looking at the sun coming up over the mountain and
Speaker 4: these incredible gardens in this estate house, which settlement dates
Speaker 4: back to the thirteenth century, so it is quite the
Speaker 4: venue for this event where we're talking about bringing together
Speaker 4: both public and private sector leaders to talk about the
Speaker 4: issues facing the European economy. Reglobalization is the umbrell under
Speaker 4: which we're having those conversations, looking at all sorts of
Speaker 4: the different aspects of challenges facing countries in this continent,
Speaker 4: whether it be dealing with technology, dealing with supply chain issues,
Speaker 4: talking about trade barriers, talking about geopolitical tensions, lots of
Speaker 4: broadway discussions. We're starting though with banks. We got Andrea
Speaker 4: Orchell from UNI Credit speaking here in the first event
Speaker 4: in just about an hour's time. But this is the
Speaker 4: first Bloomberg New Economy Gateway event in Europe, so it's
Speaker 4: a regional focus but a pretty broad scope of discussions
Speaker 4: as well.
Speaker 3: Yeah.
Speaker 1: Absolutely, I mean you brought us an interview with the
Speaker 1: Foreign Direct Investment Group in Ireland just earlier this morning.
Speaker 1: We heard a bit of the interview with Philip Lane,
Speaker 1: who is speaking to Bloomberg Stephanie Flanders ahead of this event.
Speaker 1: So there are plenty of people, you know whose views
Speaker 1: are pretty important.
Speaker 4: Yeah, that's right. Look at the conversation from Philip Lane
Speaker 4: was a great way to set up the exchanges we're
Speaker 4: having here today and tomorrow, because he's talking about the
Speaker 4: broader economic environment and saying that they are really sticking
Speaker 4: to looking at what the data shows between now on
Speaker 4: the next DCB meeting. In terms of rate hikes. He
Speaker 4: wouldn't be drawn by Stephanie Flanders as to whether he
Speaker 4: would his baseline would be a fifty basis points hike.
Speaker 4: He said, there will be a rate hike, but the
Speaker 4: size of it will have to be determined by what
Speaker 4: we learn about things like inflation, but also credit conditions
Speaker 4: in the Euro Area, because they have their own lending
Speaker 4: survey that's due out before the next meeting of the ECBs.
Speaker 4: That's something they'll be looking to see. Of course, the
Speaker 4: effect of the collapse of SVB, the termalol that we've
Speaker 4: seen abound, credit sweel and what all of that means
Speaker 4: for the I suppose business environment here in Europe something
Speaker 4: that's top of mind for many of those attending.
Speaker 2: Okay, Stephen, thank you very much being by Stephen Carroll,
Speaker 2: joining us there live from the Bloomberg New Economy Gate
Speaker 2: where you're at. More from Stephen as we go through
Speaker 2: programming this morning onto what is top of mind here
Speaker 2: in London, and that is certainly inflation data. The UK's
Speaker 2: inflation data for March has just been released. Joining us
Speaker 2: now is our Bloomberg UK correspondent Lizzie Burton, who can
Speaker 2: give us the details. So ten more than ten percent.
Speaker 2: We'd expected it to come down to a single digit
Speaker 2: figure and it did not, once again disappointing those at
Speaker 2: the Bank of England and the government.
Speaker 10: What drove this well, it was driven down from last
Speaker 10: month by motor fuels, but it was kept high by
Speaker 10: food and non alcohol drinks. So that's going to be
Speaker 10: really painful for your average bit because of course they
Speaker 10: spend more on essentials as a share of their income.
Speaker 10: In fact, if you look at the annual rate of
Speaker 10: inflation for those goods specifically, it was nineteen point one percent, eyewatering.
Speaker 10: It is the highest since nineteen seventy seven, and interestingly,
Speaker 10: one of the big drivers is bred according to the
Speaker 10: Office for National Statistics, and i've just been digging into
Speaker 10: the most recent speech and first speech actually from Swatti Dingro,
Speaker 10: one of the big doves on the Bank of England's
Speaker 10: Monetary Policy Committee, and she actually used the example of
Speaker 10: a loaf of bread to break down the component parts
Speaker 10: of inflation. She used it to illustrate that actually we're
Speaker 10: underestimating the contribution of imported inflation, as you might expect.
Speaker 10: She's a trade expert, so that was incredibly prescient from her.
Speaker 10: But worryingly for the Bank of England as well, Services
Speaker 10: inflation two unchanged at six point six percent, So this
Speaker 10: is really sticky.
Speaker 1: Yeah it is. What does it mean for the Bank
Speaker 1: of England then, is that rate ry baked in.
Speaker 10: Now pretty much looks like it markets think. So you
Speaker 10: saw after the jobs data yesterday, Goldman Sachs and Bloomberg Economics,
Speaker 10: amongst other economists, changing their calls from a hold to
Speaker 10: a quarter point hike. The jobs data showed that you've
Speaker 10: got strong pay growth, signs of renewed momentum, especially in
Speaker 10: the private sector. So our economist Dan Hansen says, it's
Speaker 10: just impossible to ignore and today's inflation print just bakes
Speaker 10: it in.
Speaker 2: Okay, Lizzie, thanks very much. Bloomberg Sir UK correspondent Lizzie
Speaker 2: Burden with the latest on the UK story up next
Speaker 2: Stop Investor details a plan to splice HSBC. Coinbase plots
Speaker 2: a UK move as the US squeezes crypto and central
Speaker 2: London house prices take a big hit.
Speaker 5: Now the paper review on Bluebird Daybreak Europe. The news
Speaker 5: you need to know from today's papers.
Speaker 1: Okay, let's start update you then with the newspaper roundup.
Speaker 1: On that note, Blue both Leanne Goerens joins me now LeAnn,
Speaker 1: so let's start with the headline then in the time.
Speaker 1: So this is around a story that we've tracked for
Speaker 1: quite a long time. Top Investor details planned to split HSBC.
Speaker 3: Yes, indeed, Caroline, there's been a development, so that's why
Speaker 3: we're talking about it. Yes, yet again HSBC's larger shareholders
Speaker 3: accusing bosses of being closed minded about a breakup of
Speaker 3: the bank. So ping An publicly called for the creation
Speaker 3: of a separately listed Asia business headquartered over in Hong
Speaker 3: Kong in a statement yesterday. That's according to reporting from Bloomberg.
Speaker 3: In a strongly worded statement it was over two thousand words.
Speaker 3: They criticized the British lender. The Chinese insurer says it
Speaker 3: was deeply concerned about HSBC's performance. According to the Times,
Speaker 3: a Chinese insurer also claims that the foot See one
Speaker 3: hundred bank had exaggerated many of the costs and risks
Speaker 3: surrounding its breakup proposals that it had given the bank
Speaker 3: last April. Had emerged that Pingan wanted HSB to HSBC
Speaker 3: to split off its huge Asian division and that was
Speaker 3: really to boost the value for shareholders. But the board,
Speaker 3: led by Mark Tuck and the chairman who's the chairman
Speaker 3: and nol Quinn at CEO hit that publicly arguing that
Speaker 3: the breakup would be complicated also destructive. And I think
Speaker 3: from Bloomberg reporting and from the reporting in the Times today,
Speaker 3: I think it's clear to draw one conclusion that there
Speaker 3: is this fractious relationship between Europe's largest bank and one
Speaker 3: of its most important investors over in Asia.
Speaker 2: Okay, let's go to crypto. The Telegraph has a story
Speaker 2: on this front, Lendley and saying that crypto champion coinbase
Speaker 2: is plotting a UK move as Biden quote punishes tech.
Speaker 3: Yes, indeed, so the Coinbase CEO has floated leaving the
Speaker 3: US of regulatory clarity on crypto just a doesn't improve.
Speaker 3: Now the multi billion dollar crypto exchange coinbases considering this move,
Speaker 3: and he's basically saying that America is dragging its feet
Speaker 3: on crypto regulations. He said, there's failure to bring in
Speaker 3: a regulatory framework for cryptocurrencies and it's hitting the industry,
Speaker 3: which could push things like coinbase to relocate to places
Speaker 3: like here in the UK. And Brian Armstrong actually made
Speaker 3: that warning while in conversation with the former Chancellor George
Speaker 3: Osbourne at the Innovative of Finance Global Summit over in
Speaker 3: the US, once again accusing America of not being quick
Speaker 3: enough when it comes to crypto regulation. He actually said
Speaker 3: that the UK has an advantage over the US because
Speaker 3: the f CEA oversees both commodities and securities, where in
Speaker 3: the States there's a turf battle between the two separate regulators.
Speaker 3: So there we are Coinbase wanting quicker movement on crypto regulation.
Speaker 1: Okay. And the latest when it comes to house prices,
Speaker 1: the Financial Times has a story Central London house prices
Speaker 1: suffer the biggest annual fall since twenty nineteen.
Speaker 3: And Caroline, this is concerning because property values in places
Speaker 3: like Mayfair, Chelsea Kensington actually tend not to suffer from
Speaker 3: rising interest rates in these higher mortgage costs we're seeing
Speaker 3: that's because the market kind of mainly relies on cash
Speaker 3: rich foreign buyers. But speaking to the Ft, the Lonres
Speaker 3: managing directors said, buyers have just become so cautious over
Speaker 3: the concerns of the prices and really that they're going
Speaker 3: to fall even further over the bleak economic outlook. So
Speaker 3: that's what's really concerning things at the moment. And the
Speaker 3: central London property prices have dropped five percent in twelve
Speaker 3: months to March, the largest four in three and a
Speaker 3: half years. But something else that Bloomberg has written a
Speaker 3: story up on today is sales and construction of London
Speaker 3: properties fill thirty in the first quarter from a year
Speaker 3: earlier to the lowes since twenty twelve, and that's from
Speaker 3: data compiled by Mollia London showed. So lots of data
Speaker 3: happening in the housing market, but like we're seeing, you know,
Speaker 3: the wealthy areas really suffering the biggest annual four