WEBVTT - Putin Talks Tough & Odey Suspends Flagship Fund

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<v Speaker 1>This is Bloomberg DAYBAK for this Tuesday, the twenty seventh

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<v Speaker 1>of June in London.

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<v Speaker 2>Coming up today, talking tough, Putin labels, Wagner mercenary commanders,

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<v Speaker 2>traders as Progosian denies, coup.

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<v Speaker 1>Attempt, the sun rises on CenTra, Central Banker's head into

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<v Speaker 1>the Portuguese mountains as rates near their.

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<v Speaker 2>Peak, Investors take flight. ODI Asset Management suspended its flagship

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<v Speaker 2>heads fund on surging redemption requests.

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<v Speaker 3>And these new toys and putting the eye in IMF.

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

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<v Speaker 1>I'm Jews Wilcock class retail therapy. A decline in UK

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<v Speaker 1>shop price inflation offers a glimmer of hope for the

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<v Speaker 1>Bank of England.

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<v Speaker 4>That's all straight ahead on Bloomberg Daybreak Europe. The business

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<v Speaker 4>news you need to start your day in just one

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<v Speaker 4>fifteen minute podcast on Apple, Spotify, the Bloomberg Business app

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<v Speaker 4>and everywhere you get your podcasts.

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<v Speaker 2>Good morning.

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<v Speaker 1>I'm Stephen Carroll and I'm Caroline Hetger. Here are the

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<v Speaker 1>stories that we're following today.

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<v Speaker 2>Russia's President Vladimir Putin has condemned the leaders of the

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<v Speaker 2>Wagner Mercenary group as traitors. In his first public comments

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<v Speaker 2>since the weekend's revolt, the Russian leader said the attempted

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<v Speaker 2>mutiny had failed to divide the country.

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<v Speaker 5>Dear friends, today I address once again all Russian citizens.

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<v Speaker 5>I thank you for your endurance, solidarity and patriotism. Civil

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<v Speaker 5>solidarity showed that any ransom, any attempts to organize internal

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<v Speaker 5>unrest are doomed to fail.

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<v Speaker 2>Vladimir Putin's pre recorded address to the Nation voice thereby

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<v Speaker 2>a translator, came hours after Wagner leader Yevgeny Progosion insisted

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<v Speaker 2>he hadn't been attempting a coup. The Mercenary chief said

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<v Speaker 2>the march on Moscow by Wagner troops had been a

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

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<v Speaker 1>Meanwhile, top central bankers and policymakers are gathering in Portugal

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<v Speaker 1>today for the annual ECB Forum on Central Banking. Bloomberg's

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<v Speaker 1>editor at large, Francine Lacua reports now from Cintra.

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<v Speaker 6>A lot of debate on officials about what to do

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

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<v Speaker 6>Portugal to iron out their differences. The question is whether

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<v Speaker 6>a pause is warranted to appraise a still unfolding effects

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<v Speaker 6>of policy tightening to date, or whether more action is

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<v Speaker 6>required after the summer break to tackle stubborn underlying price

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<v Speaker 6>gains from Cintra Portugal, Francin Lacquel Bloomberg Radio.

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

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<v Speaker 2>To other news, ODI Asset Management has suspended its flagship

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<v Speaker 2>hedge fund after being hit by redemption requests totaling nineteen

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<v Speaker 2>percent of the fund. Investors have been fleeing the firm

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<v Speaker 2>following fresh sexual assault allegations made against founder crisp and Odi,

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<v Speaker 2>which he denies. Odi himself managed the European Fund until

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<v Speaker 2>he was removed from the partnership this month. Fund is

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<v Speaker 2>known for its wild swings between profit and loss and

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<v Speaker 2>had its best every performance last year, returning one hundred

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<v Speaker 2>and fifty two percent to investors.

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<v Speaker 1>US Treasury Secretary Janet Yellen plans to visit China in

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<v Speaker 1>early July, in a further sign of cooling tensions between

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<v Speaker 1>Washington and Beijing. Bloomberg's Washington correspondent Amri Horden broke the news.

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<v Speaker 1>She points out that Yellen would be the second US

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<v Speaker 1>Cabinet official to travel to the country in recent months.

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<v Speaker 7>She has continuously said, even an interview with me at

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<v Speaker 7>the G seven Finance ministers meeting in Japan, that when

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<v Speaker 7>their time was appropriate, she had all plans to go,

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<v Speaker 7>and then of course were on the heels a Sertoy

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

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<v Speaker 7>that really opened the door to have more of these

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<v Speaker 7>principal to principle meetings between Beijing and Washington.

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<v Speaker 1>Amri Hordn says that the trip will include high level

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<v Speaker 1>economic talks with her new Chinese counterparts. The visit comes

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<v Speaker 1>as the Biden administration continues to work on an executive

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<v Speaker 1>order that would regulate and potentially cut off certain US

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<v Speaker 1>investments in China.

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<v Speaker 2>The news comes as China's premier spoke out against what

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<v Speaker 2>he called deglobalization trends in the West. Speaking of the

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<v Speaker 2>World Economic Forum in Tianjin, Li Kiang said economic issues

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<v Speaker 2>should not be brought into the political sphere.

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<v Speaker 8>Some in the West are hyping up the so called

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<v Speaker 8>phraseologies of reducing dependencies and de risking. These two concepts,

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<v Speaker 8>I would say are forced propositions governments and relevant organizations

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<v Speaker 8>should not overreach themselves, still less, overstretch the concept of

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<v Speaker 8>risk or turn it into an ideological tool.

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<v Speaker 2>Speaking through a translator, China's premier also told the audience

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<v Speaker 2>in the northern Chinese city that the world's second largest

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<v Speaker 2>economy is still on track to hit its annual growth

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<v Speaker 2>target of around five percent.

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<v Speaker 1>Credit Sweez has agreed to pay nine hundred thousand dollars

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<v Speaker 1>in fines allegations that it reported trades late and misapplied

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<v Speaker 1>key indicates to hundreds of thousands of transactions. The US

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<v Speaker 1>Financial Industry Regulatory Authority said that the bank's brokerage reported

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<v Speaker 1>about nine thousand trades late between November twenty fifteen and

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<v Speaker 1>March this year. The transactions involved securitized products, corporate debt,

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<v Speaker 1>and agency debt securities, according to FINRA. The news comes

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<v Speaker 1>after UBS closed its deal to purchase the troubled lender

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<v Speaker 1>earlier this month.

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<v Speaker 2>UK food prices eased for a second month to fourteen

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<v Speaker 2>point six percent. Bloomberg's Ewan Parts reports it's a.

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<v Speaker 9>Sign of how serious food price inflation has become. The

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<v Speaker 9>reading of nearly fifteen percent is being hailed as progress.

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<v Speaker 9>The British Retail Consortium says that price rises may have

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<v Speaker 9>peaked with both food inflation and wider shot price inflation,

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<v Speaker 9>calling for a second month in a row. The Trade

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<v Speaker 9>Association says the easing was led by grossers cutting the

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<v Speaker 9>prices of basics like milk, cheese and eggs. The data

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<v Speaker 9>comes as supermarket's face increasing scrutiny from the governments, with

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<v Speaker 9>the biggest player sets bequised by MPs on Parliament Business Committee.

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

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

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<v Speaker 1>A theme though, from China are concerns about independent financial

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<v Speaker 1>analysis in China. This caught our attention today China has

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<v Speaker 1>banned a couple of writers from Weibo. These are key

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<v Speaker 1>commentators when it comes to stocks to jobless rates. Wu

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<v Speaker 1>Chiaobo has been suspended from Weibo. This is someone who

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<v Speaker 1>has nearly five million followers on that platform, and so

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<v Speaker 1>China potentially cracking down again on people who make you

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<v Speaker 1>do some financial analysis and publish it on the social

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<v Speaker 1>media platform.

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<v Speaker 2>You know, he's someone who's interesting because he regularly writes

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<v Speaker 2>for Kaishan Global. He's published books on things like ten

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

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<v Speaker 2>his recent posts have actually already been deleted from the site,

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<v Speaker 2>so it's not clear if there was something that he

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<v Speaker 2>posted that perhaps spark this move being taken by way Bo.

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

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<v Speaker 2>but they were banned from the website for spreading what

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<v Speaker 2>weaibo called negative and harmful information. But it's an interesting

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<v Speaker 2>time when we're looking at influential writers who you know,

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<v Speaker 2>communicate viawebo to huge audiences their views on the Chinese economy.

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<v Speaker 2>This is part of a broader debate over how much

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

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

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<v Speaker 1>the phrases was that these unnamed individuals attacked and undermined

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<v Speaker 1>Chinese policy. So again sort of a concern abound financial

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<v Speaker 1>analysis and how that is disseminated across China.

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<v Speaker 2>Yeah, indeed. Well, look, the IMFs, Geita, Goop Andath meanwhile,

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<v Speaker 2>has told central bankers that they must must remain committed

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<v Speaker 2>to fighting inflation. The fund's first deputy managing director spoke

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<v Speaker 2>at the ECB's annual Forum in the Portuguese town of CenTra,

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<v Speaker 2>setting up a meeting where many monetary policy bakers are

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

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<v Speaker 2>editor at large, Francine lackways in center for us this

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<v Speaker 2>morning and she joins us, now, good morning to you, Francine.

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<v Speaker 2>So Irallian Coles and Kita Gopinath to over dinner last

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<v Speaker 2>night to the central bankers tell him to keep hiking.

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<v Speaker 2>Is that the conversation that's dominating this meeting.

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<v Speaker 10>It is so. The premise I think for everything is

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<v Speaker 10>basically the central banks for the moment have stayed the course.

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<v Speaker 10>They've been managing to raise infustrates quite significantly without putting

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<v Speaker 10>everyone into acession. The big question now is whether they pause,

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<v Speaker 10>and this is true for the ECB, it's also true

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<v Speaker 10>for the SAID and the BOE. Is whether they pause

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<v Speaker 10>because they want to appraise the still unfolding effects with

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<v Speaker 10>policy techning today, or whether more action is required. So

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<v Speaker 10>I thought it was extremely telling Stephen to hear from

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<v Speaker 10>Jita Gopinath, who was here. She was opening the Central Forum,

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<v Speaker 10>and she was basically saying that the most important, so

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<v Speaker 10>that the second that the most important of the two

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<v Speaker 10>evils is inflation. She believes that taken a long time

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<v Speaker 10>to get back to targets, and so she basically put

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<v Speaker 10>it very bluntly. She was looking policy makers in the

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<v Speaker 10>eye and saying, well, this means that central banks, including

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<v Speaker 10>these be must remain committed to fight the inflation despite

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<v Speaker 10>risks of weaker economic growth. Now, the IMS is also

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<v Speaker 10>looking at it from a perspective on if you look

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<v Speaker 10>at the inflation and what that does to consumers demand,

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<v Speaker 10>it really does hit the porest. So they want to

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<v Speaker 10>make sure that everyone is taken care of as much

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<v Speaker 10>as they could. She's also very interestingly talked about structural

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<v Speaker 10>shifts in the economy that could produce more upside risks,

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<v Speaker 10>and so again she mentioned financial stresses that could during

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<v Speaker 10>her tension between price and financial stability objectives. So now

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<v Speaker 10>that we have stability, is the right time to increase

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<v Speaker 10>rates to get inflation down?

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<v Speaker 1>Okay, So in that case, how much debate is there

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<v Speaker 1>among ECB officials about the September meeting.

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

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<v Speaker 10>because if you look at what they've done so far.

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<v Speaker 10>So let's remember that in the twelve months since I

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<v Speaker 10>was in CenTra last time, they actually hiked to interest

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<v Speaker 10>rates by four hundred basis points. And if you look

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<v Speaker 10>at some of the inslation coming in red hot, it's

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<v Speaker 10>not as easy as to say, look, all inflation is hot.

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<v Speaker 10>You have core inflation and that's the sticky parts, and

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<v Speaker 10>that's actually you know, stronger than expected, but you have

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

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<v Speaker 10>Economics saying, look, if you look at the headline inflation

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<v Speaker 10>materially falling get and drew, driven primarily by energy inflation

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

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<v Speaker 10>So you have you know, twenty members part of the

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<v Speaker 10>cd Government Council, and frankly, there are three camps. Is

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

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<v Speaker 10>maybe do something in July and that definitely wait for September,

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<v Speaker 10>and then I think there's also people in the middle

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<v Speaker 10>that are still undecided and just want to see more data.

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<v Speaker 2>Francine, this isn't just a gathering of ECB central bankers

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<v Speaker 2>as well. They have all of the other leading central

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<v Speaker 2>banks present to Andrew Bailey's in the Bank of England

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<v Speaker 2>among them. He's facing quite a different challenge to his

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<v Speaker 2>ECV counterparts.

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<v Speaker 10>Yeah, he certainly is. And actually I was on playing

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<v Speaker 10>with the chieved Commissa the Banking Eland, who was very pleasant.

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<v Speaker 10>We did not contrary policy despite my best efforts. So

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<v Speaker 10>we saw our suitek the Bank of England decision to

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<v Speaker 10>lift raised by sixty basis points in June, and of

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<v Speaker 10>course that was a surprise. But if you look at

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<v Speaker 10>the cards that they will dealt, it's very hard to

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<v Speaker 10>argue it wasn't justified by the recent one of data.

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<v Speaker 10>They also remember, as central banks need to make sure

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<v Speaker 10>that markets think they're credible. So if you have a

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<v Speaker 10>hot inflation friends, like they did the day before their

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<v Speaker 10>Bank in England decision, it would have been very difficult

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<v Speaker 10>for them, I think, not to argue by fifty basis points.

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<v Speaker 10>The obvious next question for the Bank of England is

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<v Speaker 10>whether it will be the first of many. So again,

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<v Speaker 10>if you speak to bloom Boom Islamics, they think that

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<v Speaker 10>the coin services inflation would have to keep writing significantly.

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

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<v Speaker 10>the kind of speak inflation that we're seeing right now,

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<v Speaker 10>also probably not helped with some of the physical packages

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<v Speaker 10>that was put in place by the government. They may

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<v Speaker 10>just build data by data, month by month to decide

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<v Speaker 10>what they do next.

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<v Speaker 1>Okaycine, great to have you on the program, and of

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<v Speaker 1>course great to be there at CenTra and to hear

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<v Speaker 1>all about it. Blueberg's editor at large Francine Laqua.

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

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<v Speaker 4>Now the paper review on Bluebird Daybreak Europe. The news

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<v Speaker 4>you need to know from today's.

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<v Speaker 2>Papers for bloom Books. James will Cup joins us now

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

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<v Speaker 2>starting with the Telegraph, which has written up some research

0:12:57.200 --> 0:12:59.760
<v Speaker 2>from the International Monetary from the IMF, pointing the finger

0:12:59.800 --> 0:13:00.880
<v Speaker 2>at corporate greed.

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<v Speaker 3>I mean, Stephen, this isn't just my pitch to go

0:13:04.280 --> 0:13:07.800
<v Speaker 3>and join Francene in Portugal. There's more to it than that. Obviously,

0:13:07.840 --> 0:13:09.600
<v Speaker 3>the IMF are at CenTra and they're putting out their

0:13:09.640 --> 0:13:11.880
<v Speaker 3>research at the moment, and Francine just gave us this

0:13:12.000 --> 0:13:14.040
<v Speaker 3>masterful look at sort of the economics of that. But

0:13:14.080 --> 0:13:16.880
<v Speaker 3>the Telegrapher picked up some of the political implications because

0:13:16.920 --> 0:13:20.720
<v Speaker 3>the IMF are saying that profit increases accounted for almost

0:13:20.760 --> 0:13:23.800
<v Speaker 3>half the increase in the Eurozon's post pandemic inflation rate,

0:13:24.520 --> 0:13:28.360
<v Speaker 3>and companies increase prices by quote more than spiking costs

0:13:28.360 --> 0:13:32.439
<v Speaker 3>of imported energy. So set in sootstone this conversation we're

0:13:32.440 --> 0:13:35.680
<v Speaker 3>having at the moment in the UK about greedflation. Supermarket

0:13:35.800 --> 0:13:37.880
<v Speaker 3>CEOs and representatives are set to be in front of

0:13:37.880 --> 0:13:41.240
<v Speaker 3>Parliament today and the IMF is saying definitively that actually

0:13:41.280 --> 0:13:45.000
<v Speaker 3>it is people improving their margins now their big fear is.

0:13:45.000 --> 0:13:46.840
<v Speaker 3>They then say that some wage catch up is to

0:13:46.880 --> 0:13:49.880
<v Speaker 3>be expected, and they say that if pay were to

0:13:49.880 --> 0:13:52.720
<v Speaker 3>be increased by the five point five percent rate needed

0:13:52.800 --> 0:13:55.240
<v Speaker 3>to guide real wages back to their pre pandemic levels,

0:13:55.240 --> 0:13:57.880
<v Speaker 3>and those are EU UK levels are even higher by

0:13:57.920 --> 0:14:01.760
<v Speaker 3>the end of next year to create a balanced inflation target. Well,

0:14:01.800 --> 0:14:03.880
<v Speaker 3>to get back to the target central banks have companies

0:14:03.920 --> 0:14:05.840
<v Speaker 3>profit share would need to drop to its lowest level

0:14:05.840 --> 0:14:08.760
<v Speaker 3>since the mid nineteen nineties. So their message is quite

0:14:08.760 --> 0:14:13.160
<v Speaker 3>clear as the sort of international monetary fund that actually

0:14:13.200 --> 0:14:14.960
<v Speaker 3>companies need to feel at least some of the pain,

0:14:15.120 --> 0:14:16.960
<v Speaker 3>and if they were to feel enough pain needed to

0:14:16.960 --> 0:14:19.160
<v Speaker 3>get inflation back to target, it would be the worst

0:14:19.200 --> 0:14:20.640
<v Speaker 3>pain since the nineteen nineties.

0:14:20.720 --> 0:14:20.920
<v Speaker 8>Yeah.

0:14:20.920 --> 0:14:23.080
<v Speaker 1>Absolutely, And all of those profits, of course have helped

0:14:23.160 --> 0:14:26.640
<v Speaker 1>with the European stock market, you know, to outperform. Since

0:14:26.640 --> 0:14:29.200
<v Speaker 1>the start of the year, Andy Haldane has written an

0:14:29.280 --> 0:14:32.840
<v Speaker 1>editorial in The Financial Times about world the Industrial Revolution.

0:14:33.240 --> 0:14:33.440
<v Speaker 5>Yeah.

0:14:33.480 --> 0:14:35.080
<v Speaker 3>I mean, look again, if I were to have this

0:14:35.120 --> 0:14:37.720
<v Speaker 3>plane ticket to Portugal, I too, like Francine, could be

0:14:37.760 --> 0:14:40.320
<v Speaker 3>sat next to the Bank's former chief economist, Andy hall Dane.

0:14:40.360 --> 0:14:42.840
<v Speaker 3>But I'll have to settle for the FT's editorial. Now,

0:14:42.880 --> 0:14:45.040
<v Speaker 3>what's interesting is he's taking a longer view on this.

0:14:45.840 --> 0:14:48.200
<v Speaker 3>He has long He was giving speeches back in twenty

0:14:48.200 --> 0:14:51.600
<v Speaker 3>fifteen talking about secular stagnation, this idea of low growth rates,

0:14:51.760 --> 0:14:55.200
<v Speaker 3>the idea that the UK, among many modern advanced economies,

0:14:55.280 --> 0:14:59.080
<v Speaker 3>is getting stuck in low interest rate policy. And he's saying, well, actually,

0:14:59.080 --> 0:15:02.840
<v Speaker 3>the modern world, this new industrial revolutionary terms, it is

0:15:02.880 --> 0:15:07.040
<v Speaker 3>creating three new races. First a race to decarbonized green technology,

0:15:07.040 --> 0:15:11.320
<v Speaker 3>a second a race to remilitarize, and third this ongrowing

0:15:11.400 --> 0:15:13.920
<v Speaker 3>sort of race to reshure. And he's saying, you are

0:15:14.000 --> 0:15:17.640
<v Speaker 3>seeing areas like Sheffield and Manchester areas of cheap local

0:15:17.720 --> 0:15:20.920
<v Speaker 3>labor and cheap local land, having big manufacturing booms, and

0:15:20.960 --> 0:15:24.640
<v Speaker 3>you're seeing actually real improvement in terms of secular trends.

0:15:24.680 --> 0:15:26.960
<v Speaker 3>And he's actually quite positive about this. In the long term,

0:15:27.120 --> 0:15:31.120
<v Speaker 3>this may be reversing big low issues for low interest

0:15:31.160 --> 0:15:34.600
<v Speaker 3>rates and pushing growth in investment in R and D.

0:15:34.920 --> 0:15:35.120
<v Speaker 4>Yeah.

0:15:35.160 --> 0:15:38.320
<v Speaker 1>I can hear make UK the Manufacturers Association in the

0:15:38.400 --> 0:15:39.760
<v Speaker 1>UK rubbing their hands with glee.

0:15:40.200 --> 0:15:40.400
<v Speaker 5>Yeah.

0:15:40.440 --> 0:15:42.640
<v Speaker 3>But in the flip side though, he doesn't comment at

0:15:42.680 --> 0:15:45.160
<v Speaker 3>all on whether the UK is winning any of those

0:15:46.080 --> 0:15:48.320
<v Speaker 3>just that those races are reshaping the global economy.

0:15:48.720 --> 0:15:51.480
<v Speaker 2>Interesting stuff. Let's go next to the Wall Street Journal

0:15:51.560 --> 0:15:52.640
<v Speaker 2>writing about salaries.

0:15:52.760 --> 0:15:55.080
<v Speaker 3>Well, often we say Stephen here that you know, more

0:15:55.120 --> 0:15:57.480
<v Speaker 3>money makes you happier, but alsojournal is saying, actually more

0:15:57.520 --> 0:16:01.080
<v Speaker 3>money on your own terms makes you happier. But any

0:16:01.200 --> 0:16:05.120
<v Speaker 3>work individual worker category, freelancers were the happiest with their

0:16:05.160 --> 0:16:08.040
<v Speaker 3>work relationship even if they were paid much, much, much less.

0:16:08.200 --> 0:16:09.080
<v Speaker 2>It is in the US.

0:16:09.280 --> 0:16:10.680
<v Speaker 3>This is in the US. Yes, so it's Wall.

0:16:10.520 --> 0:16:13.400
<v Speaker 1>Street Channel And it's not like zero outs contract workers though,

0:16:13.440 --> 0:16:15.480
<v Speaker 1>is it. Because it's a long read, you're going to

0:16:15.520 --> 0:16:17.360
<v Speaker 1>be a little bit up the pole.

0:16:17.640 --> 0:16:20.000
<v Speaker 3>Well, it is still the aggregate. But I will admit

0:16:20.040 --> 0:16:22.000
<v Speaker 3>that the big difference here is that if you then

0:16:22.000 --> 0:16:24.680
<v Speaker 3>break that down sectorally, workers in tech, construction, real estate

0:16:24.680 --> 0:16:27.080
<v Speaker 3>and finance were the ones who had a pay satisfaction,

0:16:27.280 --> 0:16:30.280
<v Speaker 3>which then breaks down and the darker story is that

0:16:30.320 --> 0:16:33.320
<v Speaker 3>those in educational healthcare were least happy and those working

0:16:33.320 --> 0:16:36.760
<v Speaker 3>for gig economies like Uber, Instacart and door dash offen

0:16:36.840 --> 0:16:38.960
<v Speaker 3>reported to such low pay that they couldn't afford to eat.

0:16:39.160 --> 0:16:41.000
<v Speaker 3>So it does there is a divide there.

0:16:43.840 --> 0:16:46.400
<v Speaker 2>This is Bloomberg Daybreak Europe. You're a morning brief on

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