1
00:00:02,480 --> 00:00:06,800
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:09,280 --> 00:00:12,560
Speaker 2: This is the Bloomberg Daybreak europ podcast, available every morning

3
00:00:12,600 --> 00:00:16,119
Speaker 2: on Apple, Spotify or wherever you listen. It's Monday, the

4
00:00:16,200 --> 00:00:19,160
Speaker 2: twenty eighth of October in London. I'm Stephen Carroll. Coming

5
00:00:19,239 --> 00:00:22,640
Speaker 2: up today. Keir Starmer will warn that the UK faces

6
00:00:22,680 --> 00:00:25,960
Speaker 2: the harsh light of fiscal reality as he prepares the

7
00:00:25,960 --> 00:00:29,720
Speaker 2: ground for a budget focused on tax hikes and extra borrowing.

8
00:00:30,240 --> 00:00:33,559
Speaker 2: The price of oil slumps after Israel limits its strikes

9
00:00:33,600 --> 00:00:37,440
Speaker 2: on Iran to military targets. Plus, are the mag seven

10
00:00:37,560 --> 00:00:41,040
Speaker 2: becoming the mess Seven? Big tech stocks lose some of

11
00:00:41,080 --> 00:00:44,400
Speaker 2: their auras earnings growth slows. Let's start with a roundup

12
00:00:44,440 --> 00:00:47,040
Speaker 2: of our top stories. The Prime Minister, Kir Starmer says

13
00:00:47,040 --> 00:00:50,640
Speaker 2: his government will embrace fiscal reality as he prepares a

14
00:00:50,680 --> 00:00:53,600
Speaker 2: budget that will define UK politics for the rest of

15
00:00:53,640 --> 00:00:57,080
Speaker 2: the decade. The Labour leader is aiming to stabilize Britain's

16
00:00:57,080 --> 00:01:00,440
Speaker 2: public finances through as much as forty billion pass of

17
00:01:00,480 --> 00:01:03,760
Speaker 2: tax hikes and spending cuts. His party pledged in its

18
00:01:03,800 --> 00:01:08,039
Speaker 2: manifesto that it wouldn't increase taxes unquote working people. The

19
00:01:08,080 --> 00:01:10,640
Speaker 2: director of the Institute for Fiscal Studies Paul Johnson says

20
00:01:10,640 --> 00:01:12,640
Speaker 2: it means businesses will be hit instead.

21
00:01:13,440 --> 00:01:16,160
Speaker 3: If you need to raise forty billion, you have to

22
00:01:16,360 --> 00:01:18,679
Speaker 3: do something with income tax, NASH insurance or be eighty.

23
00:01:18,680 --> 00:01:21,680
Speaker 3: There is simply no sensible way of raising that sort

24
00:01:21,800 --> 00:01:24,360
Speaker 3: of money without raising one of those taxes. And the

25
00:01:24,400 --> 00:01:26,759
Speaker 3: way that the chances getting round her pledges to say

26
00:01:26,800 --> 00:01:29,360
Speaker 3: it didn't apply it to the employer chunk of National

27
00:01:29,400 --> 00:01:32,200
Speaker 3: Insurance HI the IFFs.

28
00:01:32,240 --> 00:01:35,360
Speaker 2: As Paul Johnson there UK government borrowing costs have risen

29
00:01:35,360 --> 00:01:37,639
Speaker 2: in recent days in response to signals that the government

30
00:01:37,680 --> 00:01:41,560
Speaker 2: intends to loosen its fiscal rules to fund investment will

31
00:01:41,600 --> 00:01:44,000
Speaker 2: the budgets intended to tackle the major issues facing the

32
00:01:44,080 --> 00:01:47,279
Speaker 2: UK economy. New data from the Recruitment Site Indeed shows

33
00:01:47,400 --> 00:01:50,920
Speaker 2: job postings in London remain twenty five percent lower than

34
00:01:50,960 --> 00:01:53,880
Speaker 2: they were before the pandemic, as hybrid working as trinmed

35
00:01:53,920 --> 00:01:59,640
Speaker 2: demand for shop assistance and baristas near officers turning. Next

36
00:01:59,760 --> 00:02:03,080
Speaker 2: to oil prices falling by more than five percent of

37
00:02:03,160 --> 00:02:07,279
Speaker 2: the start of Monday trading after Israeli strikes against Iran

38
00:02:07,320 --> 00:02:11,800
Speaker 2: avoided the OPEC member's crude facilities, Brent traded below seventy

39
00:02:11,880 --> 00:02:15,760
Speaker 2: three dollars a barrel and West Texas Intermediate was near

40
00:02:15,840 --> 00:02:19,280
Speaker 2: sixty eight dollars a barrel after pairing some losses. The

41
00:02:19,320 --> 00:02:24,200
Speaker 2: move's lower come as oil major's exon Chevron, Shell, Total Energy,

42
00:02:24,240 --> 00:02:27,480
Speaker 2: and BP are collectively expected to post a twelve percent

43
00:02:27,560 --> 00:02:31,239
Speaker 2: profit decline from the second quarter when they report earnings

44
00:02:31,280 --> 00:02:34,680
Speaker 2: this week. That would leave all but Shell unable to

45
00:02:34,720 --> 00:02:37,919
Speaker 2: cover their dividends and buybacks with free cash flow, which

46
00:02:38,000 --> 00:02:41,000
Speaker 2: is expected to be thirty percent lower than a year ago.

47
00:02:42,480 --> 00:02:45,799
Speaker 2: The en has weakened to a three month low against

48
00:02:45,880 --> 00:02:49,200
Speaker 2: the dollar after Japan's ruling coalition failed to win a

49
00:02:49,240 --> 00:02:52,880
Speaker 2: majority in parliament. The country now faces a period of

50
00:02:52,919 --> 00:02:57,600
Speaker 2: political instability as the country's two main political blocks raced

51
00:02:57,600 --> 00:03:00,679
Speaker 2: to form a government. According to Japan's com institution, a

52
00:03:00,760 --> 00:03:04,200
Speaker 2: special session of parliament must be held within thirty days

53
00:03:04,560 --> 00:03:07,200
Speaker 2: of a general election to choose a prime minister. Here's

54
00:03:07,240 --> 00:03:09,320
Speaker 2: Bloomberg TV anchor sherry On in Tokyo.

55
00:03:11,200 --> 00:03:14,720
Speaker 4: Paul's were showing that the ruling coalition would lose its majority.

56
00:03:14,800 --> 00:03:17,880
Speaker 4: That's what happened. We're talking about the Liberal Democratic Party

57
00:03:18,120 --> 00:03:20,760
Speaker 4: and it's partner Komeito falling short of that two hundred

58
00:03:20,760 --> 00:03:23,440
Speaker 4: and thirty three seats that they needed in parliament, and that,

59
00:03:23,520 --> 00:03:25,520
Speaker 4: of course will make a big difference on whether or

60
00:03:25,520 --> 00:03:28,440
Speaker 4: not Prime Minister Shigeto Ishiba can actually hold on to

61
00:03:28,600 --> 00:03:32,160
Speaker 4: his job when there is a parliamentary vote. And we've

62
00:03:32,200 --> 00:03:36,520
Speaker 4: heard from him already talking about a really public anger

63
00:03:36,600 --> 00:03:39,120
Speaker 4: over what he called the funds issue. Remember, there's a

64
00:03:39,160 --> 00:03:42,839
Speaker 4: lot of resentment here among the Japanese public given how

65
00:03:43,000 --> 00:03:45,880
Speaker 4: party members were enriching themselves.

66
00:03:45,880 --> 00:03:49,440
Speaker 2: Bloomberg Cherryon, referring there to revelations last year that Liberal

67
00:03:49,480 --> 00:03:55,840
Speaker 2: Democratic Party supporters had systematically failed to declare donations from supporters,

68
00:03:57,480 --> 00:04:00,280
Speaker 2: sources tell Bloomberg Boeing is planning to launch a capital

69
00:04:00,360 --> 00:04:03,000
Speaker 2: raise as early as today. Earlier this month, the US

70
00:04:03,000 --> 00:04:06,800
Speaker 2: airspace giant announced plans to slash its global workforce by

71
00:04:06,840 --> 00:04:09,760
Speaker 2: about ten percent as an ongoing strike continues to hit

72
00:04:09,800 --> 00:04:13,040
Speaker 2: the firm's bottom line. More Now from Bloomberg's Charlie Pallace.

73
00:04:15,600 --> 00:04:18,400
Speaker 5: It's an offering that would help the belaguered airplane maker

74
00:04:18,480 --> 00:04:21,320
Speaker 5: boost its liquidity. One of the sources says the company

75
00:04:21,360 --> 00:04:24,560
Speaker 5: is set to raise more than fifteen billion dollars from

76
00:04:24,560 --> 00:04:28,240
Speaker 5: the fundraising, adding that the amount could still rise depending

77
00:04:28,240 --> 00:04:31,479
Speaker 5: on demand. Last week, the company got clearance from the

78
00:04:31,520 --> 00:04:34,240
Speaker 5: SEC to sell as much as twenty five billion of

79
00:04:34,240 --> 00:04:37,120
Speaker 5: equity and debt, a move that could help Boeing avoid

80
00:04:37,200 --> 00:04:40,840
Speaker 5: having its credit rating downgraded to junk. Boeing needs the

81
00:04:40,880 --> 00:04:45,159
Speaker 5: capital infusion to maintain its investment grade rating and fund

82
00:04:45,160 --> 00:04:48,800
Speaker 5: its eventul recovery from a crippling strike in New York.

83
00:04:48,960 --> 00:04:51,840
Speaker 5: Charlie Pellette Bloomberg Radio, and.

84
00:04:51,800 --> 00:04:54,760
Speaker 2: The stock market dominance of tech companies like Apple and

85
00:04:55,160 --> 00:04:58,799
Speaker 2: Nvidia may be set to wane this earning season. Firms

86
00:04:58,839 --> 00:05:01,400
Speaker 2: that drove the SMP right appeared to be in the

87
00:05:01,400 --> 00:05:03,679
Speaker 2: back seat. Bloombergs ta Adebayo has the story.

88
00:05:06,440 --> 00:05:09,840
Speaker 6: Slowing profits are hitting some of the stock market's technology

89
00:05:09,960 --> 00:05:13,120
Speaker 6: giants as they prepare to report earnings this week. According

90
00:05:13,160 --> 00:05:16,800
Speaker 6: to Bloomberg Intelligence, five of the largest SMP firms are

91
00:05:16,880 --> 00:05:20,760
Speaker 6: projected to post average earnings growth of nineteen percent in

92
00:05:20,880 --> 00:05:24,800
Speaker 6: third quarter results. That would be their slowest collective expansion

93
00:05:24,920 --> 00:05:28,240
Speaker 6: in six quarters. The gap between big tech and the

94
00:05:28,320 --> 00:05:31,280
Speaker 6: rest of the market is also expected to continue to

95
00:05:31,400 --> 00:05:35,880
Speaker 6: narrow into twenty twenty five. In London, tiwa Adebayo Bloomberg Radio.

96
00:05:36,480 --> 00:05:37,920
Speaker 2: Now in a moment, We'll bring you more and what

97
00:05:38,040 --> 00:05:40,400
Speaker 2: to expect from this week's budget in the UK. Let's

98
00:05:40,440 --> 00:05:42,600
Speaker 2: get more details on what's happening on the oil markets.

99
00:05:42,640 --> 00:05:44,520
Speaker 2: But a word first, and another story that caught my

100
00:05:44,640 --> 00:05:48,320
Speaker 2: eye on how a DJ became an unlikely champion for

101
00:05:48,480 --> 00:05:51,080
Speaker 2: green farming. So our colleague charlit Whose Morgan has been

102
00:05:51,080 --> 00:05:55,000
Speaker 2: speaking to Andy Kato's half of the DJ duo Grouvarmada, who,

103
00:05:55,160 --> 00:05:58,240
Speaker 2: alongside his music career, has become one of the UK's

104
00:05:58,279 --> 00:06:01,400
Speaker 2: most prominent voices calling for an overhaul of how the

105
00:06:01,480 --> 00:06:04,760
Speaker 2: world produces its food. So over the past six years,

106
00:06:04,760 --> 00:06:07,160
Speaker 2: he's built a network of more than one hundred farmers

107
00:06:07,200 --> 00:06:10,360
Speaker 2: in the UK and France growing wheat using what's known

108
00:06:10,400 --> 00:06:14,320
Speaker 2: as regenerative farming methods. He's also convinced some of the

109
00:06:14,360 --> 00:06:16,960
Speaker 2: biggest retailers here in the UK, as well as restaurant chains,

110
00:06:17,000 --> 00:06:19,560
Speaker 2: to pay a premium for flour and bread that's made

111
00:06:19,600 --> 00:06:22,880
Speaker 2: from this wheat under the brand Wild Farm. He's been

112
00:06:22,920 --> 00:06:27,640
Speaker 2: getting involved too in public education campaigns about what regenerative

113
00:06:28,000 --> 00:06:32,320
Speaker 2: agriculture could mean as a climate solution for farming, making

114
00:06:32,400 --> 00:06:35,359
Speaker 2: crops and soil more resilient to things like weather shock

115
00:06:35,520 --> 00:06:40,520
Speaker 2: and also protecting soil water and biodiversity. Charlotte has been

116
00:06:40,640 --> 00:06:43,480
Speaker 2: looking into both how this method is being used and

117
00:06:43,760 --> 00:06:45,680
Speaker 2: what Andy Katta has to say about it. Well worth

118
00:06:45,720 --> 00:06:48,440
Speaker 2: your time this morning at Bloomberg dot com is where

119
00:06:48,480 --> 00:06:50,640
Speaker 2: you'll find it and of course on the terminal as well.

120
00:06:51,640 --> 00:06:53,840
Speaker 2: Let's bring you more now though, on the countdown to

121
00:06:53,880 --> 00:06:57,280
Speaker 2: the UK Budget on Wednesday, the Prime Minister promising a

122
00:06:57,360 --> 00:07:00,919
Speaker 2: plan that will change the long term trajectory on British

123
00:07:01,000 --> 00:07:04,039
Speaker 2: growth for the better. Our UK politic supporter James Wilcock

124
00:07:04,160 --> 00:07:06,640
Speaker 2: is with me for more. James, We're expecting to hear

125
00:07:06,640 --> 00:07:07,480
Speaker 2: from the Prime Minister.

126
00:07:07,360 --> 00:07:07,800
Speaker 3: Later to day.

127
00:07:07,800 --> 00:07:09,560
Speaker 2: He's making a speech on the budget. What do we

128
00:07:09,600 --> 00:07:10,520
Speaker 2: know about what he's going to say.

129
00:07:10,840 --> 00:07:14,400
Speaker 7: He faces a very difficult challenge here because all through

130
00:07:14,480 --> 00:07:16,559
Speaker 7: his time in government he said that he is pro growth,

131
00:07:16,760 --> 00:07:20,560
Speaker 7: pro worker, pro business. There's a hard interest to balance,

132
00:07:20,600 --> 00:07:23,840
Speaker 7: and he's going to be saying that he backs stability,

133
00:07:24,240 --> 00:07:27,920
Speaker 7: investment and reform and the only labor will be making

134
00:07:27,960 --> 00:07:31,440
Speaker 7: the tough choices that Conservative have dodged his words over

135
00:07:31,480 --> 00:07:34,240
Speaker 7: the past fourteen years. And so basically he's going to

136
00:07:34,280 --> 00:07:37,280
Speaker 7: be laying out the case for major economic surgery which

137
00:07:37,320 --> 00:07:38,320
Speaker 7: will be coming on Wednesday.

138
00:07:38,960 --> 00:07:42,760
Speaker 2: How important is the tone that Keir Starmer strikes in

139
00:07:42,960 --> 00:07:46,240
Speaker 2: this speech. There's so much anticipation around this budget. We

140
00:07:46,840 --> 00:07:50,040
Speaker 2: hear and everyone else will spend weeks looking to try

141
00:07:50,120 --> 00:07:52,280
Speaker 2: and work out exactly what they're going to do.

142
00:07:52,520 --> 00:07:54,680
Speaker 7: What I think it's a sign of the importance that Look,

143
00:07:54,760 --> 00:07:57,240
Speaker 7: no one pronounces the budget and yet two days before

144
00:07:57,280 --> 00:07:59,560
Speaker 7: the budget the Prime Minister is making a speech which

145
00:07:59,600 --> 00:08:01,320
Speaker 7: is not prenouncing it. You don't got any measures in

146
00:08:01,360 --> 00:08:04,080
Speaker 7: the speech. Well, what it is saying is vibes. He

147
00:08:04,240 --> 00:08:06,760
Speaker 7: knows how important this is. This is possibly one of

148
00:08:06,760 --> 00:08:08,880
Speaker 7: the most important budgets for the UK since World War Two.

149
00:08:09,040 --> 00:08:11,920
Speaker 7: That again, that's how Rachel Reeve sees it. And if

150
00:08:11,960 --> 00:08:13,800
Speaker 7: you compare that to the post war period and they

151
00:08:13,920 --> 00:08:16,440
Speaker 7: have attacks, they're going to raise potentially forty billion pounds

152
00:08:16,560 --> 00:08:20,320
Speaker 7: or to Bloomberg's latest reporting, this is going to define

153
00:08:20,360 --> 00:08:22,880
Speaker 7: the next decade, if possibly not more, of UK politics.

154
00:08:22,960 --> 00:08:24,960
Speaker 7: The Prime Minister knows this, and so the tone he's

155
00:08:25,000 --> 00:08:27,920
Speaker 7: going to strike is one which is both that this

156
00:08:28,040 --> 00:08:29,880
Speaker 7: is important. This is going to be painful for some

157
00:08:30,040 --> 00:08:33,280
Speaker 7: people consumers, non doms, the wealthy, but it's also going

158
00:08:33,320 --> 00:08:35,600
Speaker 7: to create growth in the way that reassures the markets

159
00:08:35,640 --> 00:08:37,880
Speaker 7: that this is a government worse trust trusting. The last

160
00:08:37,960 --> 00:08:41,000
Speaker 7: thing they want is a Liz trust moments and they

161
00:08:41,040 --> 00:08:42,120
Speaker 7: are very clear about that.

162
00:08:42,480 --> 00:08:44,880
Speaker 2: Yeah. Indeed, and in fact the movements that we saw

163
00:08:44,960 --> 00:08:47,920
Speaker 2: on guilty as the UK's borrow and costs last week

164
00:08:48,000 --> 00:08:49,719
Speaker 2: of note when we heard about the changes to the

165
00:08:49,760 --> 00:08:53,920
Speaker 2: fiscal rules. James has been so much reporting around what

166
00:08:54,120 --> 00:08:56,560
Speaker 2: to expect in the budget in terms of individual measures

167
00:08:56,600 --> 00:08:58,400
Speaker 2: you alluded to some of them. There just remind us

168
00:08:58,400 --> 00:08:59,560
Speaker 2: of some of the things that we are expecting.

169
00:08:59,600 --> 00:09:01,440
Speaker 7: I mean, there's so many. This is a very ambitious

170
00:09:01,440 --> 00:09:04,200
Speaker 7: looking budget. The big stuff we expect to see capital

171
00:09:04,240 --> 00:09:06,800
Speaker 7: gains changes, changes to inheritance tax, and change to national

172
00:09:06,840 --> 00:09:10,200
Speaker 7: insurance on employers. That's our newsroom's laster reporting. There are

173
00:09:10,200 --> 00:09:12,599
Speaker 7: also stuff I think our listeners should also be paid to,

174
00:09:13,080 --> 00:09:15,240
Speaker 7: so you might see a freeze on income tax thresholds

175
00:09:15,240 --> 00:09:18,960
Speaker 7: commonly called fiscal drag or twenty twenty eight, reformed non doms,

176
00:09:19,280 --> 00:09:22,280
Speaker 7: changed to the private equity carried interest and also potentially

177
00:09:22,400 --> 00:09:25,360
Speaker 7: changes to entrepreneurs who sell their business tax relief on

178
00:09:25,440 --> 00:09:27,599
Speaker 7: those may face a cut too. Those are some of

179
00:09:27,640 --> 00:09:30,800
Speaker 7: the more business of financial changes. There are still lots

180
00:09:30,840 --> 00:09:33,160
Speaker 7: more in terms of spending tax on non bus lays,

181
00:09:33,200 --> 00:09:35,199
Speaker 7: areas that I can't even have time to cover. It

182
00:09:35,400 --> 00:09:37,360
Speaker 7: is going to be a big event for the UK

183
00:09:37,440 --> 00:09:38,120
Speaker 7: fiscal calendar.

184
00:09:38,320 --> 00:09:41,120
Speaker 2: Yeah, it certainly is, and of course for coverage across

185
00:09:41,240 --> 00:09:44,800
Speaker 2: our platforms on Bloomberg as well. James, We've talked in

186
00:09:44,920 --> 00:09:47,360
Speaker 2: previous budgets about the rabbit out of the hat moment

187
00:09:47,480 --> 00:09:49,959
Speaker 2: and we often listen to a budget speech looking to

188
00:09:50,040 --> 00:09:53,760
Speaker 2: see what wasn't pre announced or what wasn't reported on

189
00:09:53,840 --> 00:09:56,160
Speaker 2: in advance of the event. Is there any room in

190
00:09:56,240 --> 00:09:58,000
Speaker 2: this budget left for surprises.

191
00:09:58,080 --> 00:10:00,880
Speaker 7: There's a lot of room left for surprises. We as

192
00:10:01,000 --> 00:10:02,760
Speaker 7: journalists as the media have focused a lot on tax

193
00:10:02,800 --> 00:10:04,720
Speaker 7: and spent because obviously that's what you do, and obviously

194
00:10:04,920 --> 00:10:06,319
Speaker 7: journalists go out and sort of kick the tires and

195
00:10:06,320 --> 00:10:08,679
Speaker 7: administration and see what comes back. There are a lot

196
00:10:08,679 --> 00:10:11,240
Speaker 7: of non tax leavers. Reads could pull take the fiscal rules.

197
00:10:11,280 --> 00:10:12,880
Speaker 7: We already know that there's potentially a lot of works

198
00:10:12,920 --> 00:10:15,160
Speaker 7: in their reason has announced as much an industorials. A

199
00:10:15,240 --> 00:10:18,160
Speaker 7: thing that I've not heard but could be done, for example,

200
00:10:18,280 --> 00:10:20,080
Speaker 7: is they could change the inflation target. You know there

201
00:10:20,120 --> 00:10:23,040
Speaker 7: are potentially for big non tax Leavers that the chances

202
00:10:23,080 --> 00:10:25,560
Speaker 7: could pull that we haven't heard about. It's not all

203
00:10:25,640 --> 00:10:27,480
Speaker 7: decided yet and they could still make the last minute

204
00:10:27,520 --> 00:10:30,160
Speaker 7: change the decisions. It's not it's all to play for Stephen.

205
00:10:30,400 --> 00:10:32,920
Speaker 7: And on Wednesday we are going to find out a

206
00:10:33,120 --> 00:10:35,520
Speaker 7: major tempole that sets the government's agender for the next

207
00:10:35,559 --> 00:10:38,000
Speaker 7: five years and the future of our economy.

208
00:10:38,280 --> 00:10:41,280
Speaker 2: Yeah, indeed, and of course we will be watching closely

209
00:10:41,360 --> 00:10:43,559
Speaker 2: to see what details we get. But as you tell

210
00:10:43,640 --> 00:10:45,720
Speaker 2: us that, James, we are in the final countdown now

211
00:10:45,840 --> 00:10:48,319
Speaker 2: to that budget and the speech by Kris Darmo today

212
00:10:48,400 --> 00:10:50,400
Speaker 2: a key part of setting the tone for that event.

213
00:10:50,440 --> 00:10:55,080
Speaker 2: That's our UK Politics reporter James Wilcock. Now, oil prices

214
00:10:55,080 --> 00:10:58,400
Speaker 2: have tumbled after Israeli strikes against targets and Iran on

215
00:10:58,520 --> 00:11:02,520
Speaker 2: Saturday avoided the content trees crude facilities. The limited nature

216
00:11:02,520 --> 00:11:05,120
Speaker 2: of the attack targeting military sites has raised the prospects

217
00:11:05,160 --> 00:11:07,800
Speaker 2: for easing hostilities in the Middle East. Our oil reporter

218
00:11:07,920 --> 00:11:10,760
Speaker 2: well and soon joins us now for more on this story,

219
00:11:10,800 --> 00:11:12,840
Speaker 2: Will and great to have you with us on the program.

220
00:11:12,960 --> 00:11:14,880
Speaker 2: Can you talk us through, first of all the scales

221
00:11:14,960 --> 00:11:17,720
Speaker 2: of the moves that we're seeing on the oil markets.

222
00:11:18,240 --> 00:11:21,320
Speaker 1: When markets open this morning and single ball after the weekend,

223
00:11:21,800 --> 00:11:25,120
Speaker 1: we merely saw like Brent prices falling by more than

224
00:11:25,200 --> 00:11:28,240
Speaker 1: five percent to about seventy two dollars Perberol footprint and

225
00:11:28,360 --> 00:11:32,280
Speaker 1: around sixty eight for West Texas Intermediate. And it's recovered somewhat,

226
00:11:32,320 --> 00:11:34,760
Speaker 1: it's not around four point five percent foot brint to

227
00:11:34,920 --> 00:11:37,760
Speaker 1: around seventy two dollars and sixty cents, but it's still

228
00:11:37,760 --> 00:11:40,080
Speaker 1: a big dropped from what we saw last week. That's

229
00:11:40,160 --> 00:11:43,400
Speaker 1: definitely because the market has had time to digest whatever

230
00:11:43,520 --> 00:11:46,880
Speaker 1: that's happened over the weekend with what we see coming

231
00:11:46,920 --> 00:11:50,480
Speaker 1: from the Middle East where Israel struck some military targets

232
00:11:50,480 --> 00:11:50,960
Speaker 1: in Iran.

233
00:11:51,200 --> 00:11:54,000
Speaker 2: Yeah, of course, it's been watching events in the Middle

234
00:11:54,000 --> 00:11:56,480
Speaker 2: East has been a key part of tracking what's been

235
00:11:56,520 --> 00:12:00,319
Speaker 2: happening over oil markets over the past year. What do

236
00:12:00,600 --> 00:12:03,679
Speaker 2: these moves tell us about how the market is perceiving

237
00:12:03,840 --> 00:12:06,920
Speaker 2: the situation in the Middle East and perhaps going forward

238
00:12:07,040 --> 00:12:08,840
Speaker 2: what that might evolve.

239
00:12:09,679 --> 00:12:12,520
Speaker 1: Definitely, and I think it's really important to know that

240
00:12:12,679 --> 00:12:15,360
Speaker 1: the mar has had about two days to digest whatever

241
00:12:15,400 --> 00:12:18,120
Speaker 1: that's happened in the Middle East, and we've seen Israel

242
00:12:18,640 --> 00:12:23,000
Speaker 1: having very limited strikes in Iranian military targets, but to

243
00:12:23,160 --> 00:12:25,280
Speaker 1: note that there is one one of some of the

244
00:12:25,360 --> 00:12:29,560
Speaker 1: military targets actually exist in one of its oil producing provinces.

245
00:12:30,320 --> 00:12:32,960
Speaker 1: At the same time, you have Iran giving a very

246
00:12:33,160 --> 00:12:37,360
Speaker 1: measured response to these attacks. And so I think what

247
00:12:37,520 --> 00:12:39,959
Speaker 1: we see here and what we've been hearing from traders,

248
00:12:40,520 --> 00:12:43,000
Speaker 1: is that the market has had time to digest the

249
00:12:43,120 --> 00:12:46,400
Speaker 1: news and it now sees that the geopolitical risk premium

250
00:12:46,720 --> 00:12:49,760
Speaker 1: that has been pushing oil prices up in recent weeks

251
00:12:50,000 --> 00:12:54,600
Speaker 1: has sort of faded away overnight, and now the market

252
00:12:54,640 --> 00:12:59,480
Speaker 1: focus has shifted to the oversupply, potentially an oversupply of

253
00:13:00,040 --> 00:13:03,559
Speaker 1: crude barrels in the coming months, and that is what

254
00:13:03,679 --> 00:13:06,480
Speaker 1: we have been noticing in those articles in our news

255
00:13:06,559 --> 00:13:11,239
Speaker 1: reports in recent weeks. Right you have the olpeck potentially

256
00:13:11,360 --> 00:13:15,480
Speaker 1: coming on with more production. They have Sally Arabia especially

257
00:13:15,800 --> 00:13:18,760
Speaker 1: has said that they're willing to end production cuts. So

258
00:13:18,960 --> 00:13:22,640
Speaker 1: you have this potential glut of crude barrels in the market.

259
00:13:22,920 --> 00:13:28,040
Speaker 1: And immediately after news of Israel striking around, you do

260
00:13:28,240 --> 00:13:31,360
Speaker 1: see some investment banks like City Bank. They came out

261
00:13:31,400 --> 00:13:35,080
Speaker 1: with a note this morning in Singapore saying that they're

262
00:13:35,160 --> 00:13:39,040
Speaker 1: lowering their twelve month forecasts of crude barrel prices from

263
00:13:39,120 --> 00:13:42,000
Speaker 1: seventy two to sixty dollars a barrel, so that's a

264
00:13:42,040 --> 00:13:44,080
Speaker 1: pretty big cut to oil prices.

265
00:13:44,400 --> 00:13:47,079
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

266
00:13:47,160 --> 00:13:50,160
Speaker 2: stories making news from London to Wall streets and beyond.

267
00:13:50,520 --> 00:13:54,440
Speaker 8: Look for us on your podcast feed every morning, on Apple, Spotify,

268
00:13:54,559 --> 00:13:56,439
Speaker 8: and anywhere else you get your podcasts.

269
00:13:56,559 --> 00:13:59,560
Speaker 2: You can also listen live each morning on London Dab Radio,

270
00:13:59,600 --> 00:14:01,959
Speaker 2: the bloom Business app, and Bloomberg dot Com.

271
00:14:03,400 --> 00:14:06,160
Speaker 8: Our flagship New York station is also available on your

272
00:14:06,240 --> 00:14:10,880
Speaker 8: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

273
00:14:11,160 --> 00:14:12,520
Speaker 8: I'm Caroline Hipka.

274
00:14:12,320 --> 00:14:14,719
Speaker 2: And I'm Stephen Carol. Join us again tomorrow morning for

275
00:14:14,880 --> 00:14:17,240
Speaker 2: all the news you need to start your day right

276
00:14:17,320 --> 00:14:18,920
Speaker 2: here on Bloomberg Daybreak Europe