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Speaker 1: This is Bloomberg DAYBAK for this Tuesday, the twenty seventh

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Speaker 1: of June in London.

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Speaker 2: Coming up today, talking tough, Putin labels, Wagner mercenary commanders,

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Speaker 2: traders as Progosian denies, coup.

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Speaker 1: Attempt, the sun rises on CenTra, Central Banker's head into

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Speaker 1: the Portuguese mountains as rates near their.

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Speaker 2: Peak, Investors take flight. ODI Asset Management suspended its flagship

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Speaker 2: heads fund on surging redemption requests.

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Speaker 3: And these new toys and putting the eye in IMF.

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Speaker 3: Those are the stories we're looking at in today's papers.

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Speaker 1: I'm Jews Wilcock class retail therapy. A decline in UK

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Speaker 1: shop price inflation offers a glimmer of hope for the

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Speaker 1: Bank of England.

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Speaker 4: That's all straight ahead on Bloomberg Daybreak Europe. The business

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Speaker 4: news you need to start your day in just one

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Speaker 4: fifteen minute podcast on Apple, Spotify, the Bloomberg Business app

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Speaker 4: and everywhere you get your podcasts.

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Speaker 2: Good morning.

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Speaker 1: I'm Stephen Carroll and I'm Caroline Hetger. Here are the

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Speaker 1: stories that we're following today.

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Speaker 2: Russia's President Vladimir Putin has condemned the leaders of the

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Speaker 2: Wagner Mercenary group as traitors. In his first public comments

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Speaker 2: since the weekend's revolt, the Russian leader said the attempted

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Speaker 2: mutiny had failed to divide the country.

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Speaker 5: Dear friends, today I address once again all Russian citizens.

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Speaker 5: I thank you for your endurance, solidarity and patriotism. Civil

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Speaker 5: solidarity showed that any ransom, any attempts to organize internal

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Speaker 5: unrest are doomed to fail.

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Speaker 2: Vladimir Putin's pre recorded address to the Nation voice thereby

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Speaker 2: a translator, came hours after Wagner leader Yevgeny Progosion insisted

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Speaker 2: he hadn't been attempting a coup. The Mercenary chief said

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Speaker 2: the march on Moscow by Wagner troops had been a

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Speaker 2: protest about injustices and mistakes made during Russia's invasion of Ukraine.

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Speaker 1: Meanwhile, top central bankers and policymakers are gathering in Portugal

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Speaker 1: today for the annual ECB Forum on Central Banking. Bloomberg's

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Speaker 1: editor at large, Francine Lacua reports now from Cintra.

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Speaker 6: A lot of debate on officials about what to do

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Speaker 6: with three rises, and they'll get vital FaceTime here in Cindra,

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Speaker 6: Portugal to iron out their differences. The question is whether

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Speaker 6: a pause is warranted to appraise a still unfolding effects

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Speaker 6: of policy tightening to date, or whether more action is

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Speaker 6: required after the summer break to tackle stubborn underlying price

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Speaker 6: gains from Cintra Portugal, Francin Lacquel Bloomberg Radio.

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Speaker 1: And we'll have more from Francin Laqua in just a moment.

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Speaker 2: To other news, ODI Asset Management has suspended its flagship

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Speaker 2: hedge fund after being hit by redemption requests totaling nineteen

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Speaker 2: percent of the fund. Investors have been fleeing the firm

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Speaker 2: following fresh sexual assault allegations made against founder crisp and Odi,

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Speaker 2: which he denies. Odi himself managed the European Fund until

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Speaker 2: he was removed from the partnership this month. Fund is

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Speaker 2: known for its wild swings between profit and loss and

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Speaker 2: had its best every performance last year, returning one hundred

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Speaker 2: and fifty two percent to investors.

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Speaker 1: US Treasury Secretary Janet Yellen plans to visit China in

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Speaker 1: early July, in a further sign of cooling tensions between

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Speaker 1: Washington and Beijing. Bloomberg's Washington correspondent Amri Horden broke the news.

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Speaker 1: She points out that Yellen would be the second US

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Speaker 1: Cabinet official to travel to the country in recent months.

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Speaker 7: She has continuously said, even an interview with me at

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Speaker 7: the G seven Finance ministers meeting in Japan, that when

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Speaker 7: their time was appropriate, she had all plans to go,

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Speaker 7: and then of course were on the heels a Sertoy

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Speaker 7: state Anthony Blincoln's trip. He just wrapped that up, so

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Speaker 7: that really opened the door to have more of these

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Speaker 7: principal to principle meetings between Beijing and Washington.

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Speaker 1: Amri Hordn says that the trip will include high level

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Speaker 1: economic talks with her new Chinese counterparts. The visit comes

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Speaker 1: as the Biden administration continues to work on an executive

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Speaker 1: order that would regulate and potentially cut off certain US

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Speaker 1: investments in China.

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Speaker 2: The news comes as China's premier spoke out against what

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Speaker 2: he called deglobalization trends in the West. Speaking of the

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Speaker 2: World Economic Forum in Tianjin, Li Kiang said economic issues

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Speaker 2: should not be brought into the political sphere.

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Speaker 8: Some in the West are hyping up the so called

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Speaker 8: phraseologies of reducing dependencies and de risking. These two concepts,

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Speaker 8: I would say are forced propositions governments and relevant organizations

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Speaker 8: should not overreach themselves, still less, overstretch the concept of

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Speaker 8: risk or turn it into an ideological tool.

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Speaker 2: Speaking through a translator, China's premier also told the audience

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Speaker 2: in the northern Chinese city that the world's second largest

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Speaker 2: economy is still on track to hit its annual growth

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Speaker 2: target of around five percent.

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Speaker 1: Credit Sweez has agreed to pay nine hundred thousand dollars

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Speaker 1: in fines allegations that it reported trades late and misapplied

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Speaker 1: key indicates to hundreds of thousands of transactions. The US

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Speaker 1: Financial Industry Regulatory Authority said that the bank's brokerage reported

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Speaker 1: about nine thousand trades late between November twenty fifteen and

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Speaker 1: March this year. The transactions involved securitized products, corporate debt,

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Speaker 1: and agency debt securities, according to FINRA. The news comes

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Speaker 1: after UBS closed its deal to purchase the troubled lender

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Speaker 1: earlier this month.

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Speaker 2: UK food prices eased for a second month to fourteen

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Speaker 2: point six percent. Bloomberg's Ewan Parts reports it's a.

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Speaker 9: Sign of how serious food price inflation has become. The

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Speaker 9: reading of nearly fifteen percent is being hailed as progress.

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Speaker 9: The British Retail Consortium says that price rises may have

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Speaker 9: peaked with both food inflation and wider shot price inflation,

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Speaker 9: calling for a second month in a row. The Trade

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Speaker 9: Association says the easing was led by grossers cutting the

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Speaker 9: prices of basics like milk, cheese and eggs. The data

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Speaker 9: comes as supermarket's face increasing scrutiny from the governments, with

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Speaker 9: the biggest player sets bequised by MPs on Parliament Business Committee.

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Speaker 9: Later today in London, I'm Une Potsiplinberg day Break Europe.

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Speaker 1: Those are a few of today's the top stories for you.

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Speaker 1: A theme though, from China are concerns about independent financial

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Speaker 1: analysis in China. This caught our attention today China has

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Speaker 1: banned a couple of writers from Weibo. These are key

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Speaker 1: commentators when it comes to stocks to jobless rates. Wu

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Speaker 1: Chiaobo has been suspended from Weibo. This is someone who

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Speaker 1: has nearly five million followers on that platform, and so

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Speaker 1: China potentially cracking down again on people who make you

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Speaker 1: do some financial analysis and publish it on the social

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Speaker 1: media platform.

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Speaker 2: You know, he's someone who's interesting because he regularly writes

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Speaker 2: for Kaishan Global. He's published books on things like ten

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Speaker 2: cent for example of China's economic transformation as well. Now,

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Speaker 2: his recent posts have actually already been deleted from the site,

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Speaker 2: so it's not clear if there was something that he

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Speaker 2: posted that perhaps spark this move being taken by way Bo.

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Speaker 2: But there are two other writer as well who weren't named,

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Speaker 2: but they were banned from the website for spreading what

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Speaker 2: weaibo called negative and harmful information. But it's an interesting

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Speaker 2: time when we're looking at influential writers who you know,

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Speaker 2: communicate viawebo to huge audiences their views on the Chinese economy.

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Speaker 2: This is part of a broader debate over how much

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Speaker 2: information I suppose Chinese investors have when they're making these decisions.

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Speaker 1: Yeah. Absolutely, And it's also quite telling that one of

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Speaker 1: the phrases was that these unnamed individuals attacked and undermined

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Speaker 1: Chinese policy. So again sort of a concern abound financial

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Speaker 1: analysis and how that is disseminated across China.

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Speaker 2: Yeah, indeed. Well, look, the IMFs, Geita, Goop Andath meanwhile,

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Speaker 2: has told central bankers that they must must remain committed

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Speaker 2: to fighting inflation. The fund's first deputy managing director spoke

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Speaker 2: at the ECB's annual Forum in the Portuguese town of CenTra,

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Speaker 2: setting up a meeting where many monetary policy bakers are

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Speaker 2: near a turning point in their hiking cycle. Well, Bloomberg's

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Speaker 2: editor at large, Francine lackways in center for us this

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Speaker 2: morning and she joins us, now, good morning to you, Francine.

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Speaker 2: So Irallian Coles and Kita Gopinath to over dinner last

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Speaker 2: night to the central bankers tell him to keep hiking.

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Speaker 2: Is that the conversation that's dominating this meeting.

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Speaker 10: It is so. The premise I think for everything is

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Speaker 10: basically the central banks for the moment have stayed the course.

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Speaker 10: They've been managing to raise infustrates quite significantly without putting

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Speaker 10: everyone into acession. The big question now is whether they pause,

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Speaker 10: and this is true for the ECB, it's also true

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Speaker 10: for the SAID and the BOE. Is whether they pause

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Speaker 10: because they want to appraise the still unfolding effects with

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Speaker 10: policy techning today, or whether more action is required. So

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Speaker 10: I thought it was extremely telling Stephen to hear from

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Speaker 10: Jita Gopinath, who was here. She was opening the Central Forum,

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Speaker 10: and she was basically saying that the most important, so

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Speaker 10: that the second that the most important of the two

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Speaker 10: evils is inflation. She believes that taken a long time

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Speaker 10: to get back to targets, and so she basically put

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Speaker 10: it very bluntly. She was looking policy makers in the

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Speaker 10: eye and saying, well, this means that central banks, including

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Speaker 10: these be must remain committed to fight the inflation despite

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Speaker 10: risks of weaker economic growth. Now, the IMS is also

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Speaker 10: looking at it from a perspective on if you look

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Speaker 10: at the inflation and what that does to consumers demand,

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Speaker 10: it really does hit the porest. So they want to

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Speaker 10: make sure that everyone is taken care of as much

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Speaker 10: as they could. She's also very interestingly talked about structural

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Speaker 10: shifts in the economy that could produce more upside risks,

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Speaker 10: and so again she mentioned financial stresses that could during

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Speaker 10: her tension between price and financial stability objectives. So now

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Speaker 10: that we have stability, is the right time to increase

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Speaker 10: rates to get inflation down?

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Speaker 1: Okay, So in that case, how much debate is there

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Speaker 1: among ECB officials about the September meeting.

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Speaker 10: Well, there's a lot of debate. Get lunchy as well,

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Speaker 10: because if you look at what they've done so far.

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Speaker 10: So let's remember that in the twelve months since I

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Speaker 10: was in CenTra last time, they actually hiked to interest

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Speaker 10: rates by four hundred basis points. And if you look

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Speaker 10: at some of the inslation coming in red hot, it's

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Speaker 10: not as easy as to say, look, all inflation is hot.

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Speaker 10: You have core inflation and that's the sticky parts, and

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Speaker 10: that's actually you know, stronger than expected, but you have

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Speaker 10: underlying inflation that's really coming down. So, for example, Bloomberg

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Speaker 10: Economics saying, look, if you look at the headline inflation

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Speaker 10: materially falling get and drew, driven primarily by energy inflation

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Speaker 10: getting deeper negative territory, it's unclear how they handle this.

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Speaker 10: So you have you know, twenty members part of the

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Speaker 10: cd Government Council, and frankly, there are three camps. Is

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Speaker 10: stay the course high progressively, it's you know, let's be here,

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Speaker 10: maybe do something in July and that definitely wait for September,

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Speaker 10: and then I think there's also people in the middle

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Speaker 10: that are still undecided and just want to see more data.

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Speaker 2: Francine, this isn't just a gathering of ECB central bankers

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Speaker 2: as well. They have all of the other leading central

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Speaker 2: banks present to Andrew Bailey's in the Bank of England

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Speaker 2: among them. He's facing quite a different challenge to his

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Speaker 2: ECV counterparts.

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Speaker 10: Yeah, he certainly is. And actually I was on playing

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Speaker 10: with the chieved Commissa the Banking Eland, who was very pleasant.

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Speaker 10: We did not contrary policy despite my best efforts. So

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Speaker 10: we saw our suitek the Bank of England decision to

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Speaker 10: lift raised by sixty basis points in June, and of

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Speaker 10: course that was a surprise. But if you look at

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Speaker 10: the cards that they will dealt, it's very hard to

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Speaker 10: argue it wasn't justified by the recent one of data.

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Speaker 10: They also remember, as central banks need to make sure

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Speaker 10: that markets think they're credible. So if you have a

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Speaker 10: hot inflation friends, like they did the day before their

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Speaker 10: Bank in England decision, it would have been very difficult

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Speaker 10: for them, I think, not to argue by fifty basis points.

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Speaker 10: The obvious next question for the Bank of England is

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Speaker 10: whether it will be the first of many. So again,

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Speaker 10: if you speak to bloom Boom Islamics, they think that

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Speaker 10: the coin services inflation would have to keep writing significantly.

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Speaker 10: That's not their base case. But if you'll get you know,

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Speaker 10: the kind of speak inflation that we're seeing right now,

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Speaker 10: also probably not helped with some of the physical packages

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Speaker 10: that was put in place by the government. They may

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Speaker 10: just build data by data, month by month to decide

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Speaker 10: what they do next.

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Speaker 1: Okaycine, great to have you on the program, and of

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Speaker 1: course great to be there at CenTra and to hear

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Speaker 1: all about it. Blueberg's editor at large Francine Laqua.

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Speaker 2: Up next, putting the I in IMF and Anti's new toys.

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Speaker 4: Now the paper review on Bluebird Daybreak Europe. The news

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Speaker 4: you need to know from today's.

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Speaker 2: Papers for bloom Books. James will Cup joins us now

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Speaker 2: for a look at what's in the papers, and we're

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Speaker 2: starting with the Telegraph, which has written up some research

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Speaker 2: from the International Monetary from the IMF, pointing the finger

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Speaker 2: at corporate greed.

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Speaker 3: I mean, Stephen, this isn't just my pitch to go

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Speaker 3: and join Francene in Portugal. There's more to it than that. Obviously,

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Speaker 3: the IMF are at CenTra and they're putting out their

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Speaker 3: research at the moment, and Francine just gave us this

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Speaker 3: masterful look at sort of the economics of that. But

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Speaker 3: the Telegrapher picked up some of the political implications because

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Speaker 3: the IMF are saying that profit increases accounted for almost

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Speaker 3: half the increase in the Eurozon's post pandemic inflation rate,

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Speaker 3: and companies increase prices by quote more than spiking costs

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Speaker 3: of imported energy. So set in sootstone this conversation we're

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Speaker 3: having at the moment in the UK about greedflation. Supermarket

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Speaker 3: CEOs and representatives are set to be in front of

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Speaker 3: Parliament today and the IMF is saying definitively that actually

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Speaker 3: it is people improving their margins now their big fear is.

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Speaker 3: They then say that some wage catch up is to

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Speaker 3: be expected, and they say that if pay were to

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Speaker 3: be increased by the five point five percent rate needed

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Speaker 3: to guide real wages back to their pre pandemic levels,

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Speaker 3: and those are EU UK levels are even higher by

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Speaker 3: the end of next year to create a balanced inflation target. Well,

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Speaker 3: to get back to the target central banks have companies

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Speaker 3: profit share would need to drop to its lowest level

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Speaker 3: since the mid nineteen nineties. So their message is quite

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Speaker 3: clear as the sort of international monetary fund that actually

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Speaker 3: companies need to feel at least some of the pain,

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Speaker 3: and if they were to feel enough pain needed to

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Speaker 3: get inflation back to target, it would be the worst

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Speaker 3: pain since the nineteen nineties.

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Speaker 8: Yeah.

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Speaker 1: Absolutely, And all of those profits, of course have helped

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Speaker 1: with the European stock market, you know, to outperform. Since

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Speaker 1: the start of the year, Andy Haldane has written an

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Speaker 1: editorial in The Financial Times about world the Industrial Revolution.

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Speaker 5: Yeah.

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Speaker 3: I mean, look again, if I were to have this

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Speaker 3: plane ticket to Portugal, I too, like Francine, could be

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Speaker 3: sat next to the Bank's former chief economist, Andy hall Dane.

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Speaker 3: But I'll have to settle for the FT's editorial. Now,

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Speaker 3: what's interesting is he's taking a longer view on this.

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Speaker 3: He has long He was giving speeches back in twenty

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Speaker 3: fifteen talking about secular stagnation, this idea of low growth rates,

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Speaker 3: the idea that the UK, among many modern advanced economies,

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Speaker 3: is getting stuck in low interest rate policy. And he's saying, well, actually,

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Speaker 3: the modern world, this new industrial revolutionary terms, it is

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Speaker 3: creating three new races. First a race to decarbonized green technology,

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Speaker 3: a second a race to remilitarize, and third this ongrowing

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Speaker 3: sort of race to reshure. And he's saying, you are

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Speaker 3: seeing areas like Sheffield and Manchester areas of cheap local

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Speaker 3: labor and cheap local land, having big manufacturing booms, and

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Speaker 3: you're seeing actually real improvement in terms of secular trends.

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Speaker 3: And he's actually quite positive about this. In the long term,

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Speaker 3: this may be reversing big low issues for low interest

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Speaker 3: rates and pushing growth in investment in R and D.

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Speaker 4: Yeah.

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Speaker 1: I can hear make UK the Manufacturers Association in the

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Speaker 1: UK rubbing their hands with glee.

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Speaker 5: Yeah.

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Speaker 3: But in the flip side though, he doesn't comment at

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Speaker 3: all on whether the UK is winning any of those

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Speaker 3: just that those races are reshaping the global economy.

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Speaker 2: Interesting stuff. Let's go next to the Wall Street Journal

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Speaker 2: writing about salaries.

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Speaker 3: Well, often we say Stephen here that you know, more

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Speaker 3: money makes you happier, but alsojournal is saying, actually more

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Speaker 3: money on your own terms makes you happier. But any

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Speaker 3: work individual worker category, freelancers were the happiest with their

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Speaker 3: work relationship even if they were paid much, much, much less.

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Speaker 2: It is in the US.

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Speaker 3: This is in the US. Yes, so it's Wall.

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Speaker 1: Street Channel And it's not like zero outs contract workers though,

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Speaker 1: is it. Because it's a long read, you're going to

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Speaker 1: be a little bit up the pole.

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Speaker 3: Well, it is still the aggregate. But I will admit

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Speaker 3: that the big difference here is that if you then

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Speaker 3: break that down sectorally, workers in tech, construction, real estate

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Speaker 3: and finance were the ones who had a pay satisfaction,

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Speaker 3: which then breaks down and the darker story is that

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Speaker 3: those in educational healthcare were least happy and those working

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Speaker 3: for gig economies like Uber, Instacart and door dash offen

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Speaker 3: reported to such low pay that they couldn't afford to eat.

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Speaker 3: So it does there is a divide there.

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Speaker 2: This is Bloomberg Daybreak Europe. You're a morning brief on

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Speaker 1: I'm Caroline Hepka and.

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Speaker 2: I'm Stephen Carol. Join us again tomorrow morning for all

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Speaker 2: on Bloomberg Daybreak Europe.