1 00:00:00,120 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:09,560 --> 00:00:11,920 Speaker 2: This is Bloomberg day Break Weekend, our global look at 3 00:00:11,920 --> 00:00:13,920 Speaker 2: the top stories in the coming week from our day 4 00:00:13,920 --> 00:00:16,880 Speaker 2: Break anchors all around the world. Straight Ahead on the program, 5 00:00:16,880 --> 00:00:18,840 Speaker 2: a look at some of the big announcements we can 6 00:00:18,920 --> 00:00:22,000 Speaker 2: expect from Apple's latest product event on May seventh, and 7 00:00:22,079 --> 00:00:24,959 Speaker 2: to look at earnings from the world's biggest entertainment company. 8 00:00:25,120 --> 00:00:26,639 Speaker 2: I'm Tom Busby in New York. 9 00:00:26,920 --> 00:00:29,880 Speaker 3: I'm Stephen Carolyn London, where we're thinking about vote splits 10 00:00:29,920 --> 00:00:33,600 Speaker 3: and inflation dynamics ahead of the Bank of England's upcoming meeting. 11 00:00:33,840 --> 00:00:36,080 Speaker 4: I'm Brian Curtis in Hong Kong. We look ahead to 12 00:00:36,240 --> 00:00:39,680 Speaker 4: Chinese President Shijinping's trip to Europe. What does he hope 13 00:00:39,720 --> 00:00:40,879 Speaker 4: to get from the EU. 14 00:00:42,479 --> 00:00:46,440 Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 15 00:00:46,479 --> 00:00:48,960 Speaker 5: E Loove the three Own New York, Bloomberg ninety nine 16 00:00:49,000 --> 00:00:52,400 Speaker 5: to one, Washington, DC, Bloomberg one O six one, Boston, 17 00:00:52,479 --> 00:00:57,280 Speaker 5: Bloomberg nine sixty, San Francisco, DAB, Digital Radio, London, Sirius 18 00:00:57,400 --> 00:01:00,680 Speaker 5: XM one nineteen and around the world on bloemberg Radio 19 00:01:00,760 --> 00:01:03,040 Speaker 5: dot com and via the Bloomberg Business app. 20 00:01:06,800 --> 00:01:08,640 Speaker 2: Good day to you. I'm Tom Busby and we begin 21 00:01:08,720 --> 00:01:12,399 Speaker 2: today's program with tech giant Apple its latest product event 22 00:01:12,840 --> 00:01:15,760 Speaker 2: this Tuesday, May seventh. For more on what we can expect, 23 00:01:16,040 --> 00:01:21,520 Speaker 2: we're joined by Mark German, Bloomberg, Chief correspondent on Global Technology. So, Mark, 24 00:01:21,600 --> 00:01:24,000 Speaker 2: thanks for being here. What do you expect to see 25 00:01:24,200 --> 00:01:25,679 Speaker 2: on Tuesday? From Apple? 26 00:01:26,080 --> 00:01:28,200 Speaker 6: Thank you for having me. So it's been about a 27 00:01:28,280 --> 00:01:31,000 Speaker 6: year and a half since the last time Apple released 28 00:01:31,000 --> 00:01:35,400 Speaker 6: new iPads, right that was October twenty twenty two, So 29 00:01:35,440 --> 00:01:38,080 Speaker 6: they went the full calendar year of twenty twenty three 30 00:01:38,240 --> 00:01:40,800 Speaker 6: without a new iPad. That was the first time since 31 00:01:40,840 --> 00:01:43,559 Speaker 6: the iPad was unveiled by Steve Jobs in twenty ten, 32 00:01:43,840 --> 00:01:46,000 Speaker 6: where the company went a full calendar year without a 33 00:01:46,000 --> 00:01:49,240 Speaker 6: new model. On Tuesday, that's going to change. The company 34 00:01:49,280 --> 00:01:52,000 Speaker 6: is going to be updating its two highest and iPads, 35 00:01:52,280 --> 00:01:55,080 Speaker 6: the iPad Pro and the iPad Air. These are going 36 00:01:55,160 --> 00:01:57,840 Speaker 6: to be quite significant updates. The iPad Air, for the 37 00:01:57,840 --> 00:02:00,840 Speaker 6: first time, is going to get a larger screen size option. 38 00:02:01,040 --> 00:02:03,480 Speaker 6: That's a twelve point nine inch model, much bigger than 39 00:02:03,480 --> 00:02:06,320 Speaker 6: the current eleven inch model. And for the first time, 40 00:02:06,440 --> 00:02:09,480 Speaker 6: the iPad Pro is going to get an OLED screen. 41 00:02:09,639 --> 00:02:13,600 Speaker 6: That's a crisper, more efficient screen. Technology looks much better 42 00:02:13,639 --> 00:02:15,440 Speaker 6: that they've been using on the iPhone and the Apple 43 00:02:15,480 --> 00:02:18,239 Speaker 6: Watch for years. So that's finally coming to the company's iPads. 44 00:02:18,400 --> 00:02:19,040 Speaker 5: Well, that's big. 45 00:02:19,520 --> 00:02:22,400 Speaker 2: What kind of role will artificial intelligence hardware play in this? 46 00:02:22,919 --> 00:02:25,680 Speaker 6: So the new iPad pro at least, is expected to 47 00:02:25,680 --> 00:02:28,560 Speaker 6: have an updated processor that will set the stage for 48 00:02:28,760 --> 00:02:32,120 Speaker 6: AI enhancements that the company will roll out at the 49 00:02:32,280 --> 00:02:34,720 Speaker 6: end of this year. So the iPad won't come out 50 00:02:34,720 --> 00:02:37,320 Speaker 6: the gate with these new AI features, but it'll have 51 00:02:37,720 --> 00:02:41,520 Speaker 6: hardware insights to be able to support a new slate 52 00:02:41,560 --> 00:02:45,120 Speaker 6: of artificial intelligence enhancements when those already towards the end 53 00:02:45,120 --> 00:02:47,120 Speaker 6: of the year with their operating system update. 54 00:02:47,240 --> 00:02:50,120 Speaker 2: Okay, so with the iPads, we're seeing a big change. 55 00:02:50,280 --> 00:02:53,400 Speaker 2: We know that iPad small compared to the sales of 56 00:02:53,440 --> 00:02:56,680 Speaker 2: the iPhone, but still a significant change for Apple. And 57 00:02:57,120 --> 00:02:59,560 Speaker 2: let's talk about what it means to Apple for the 58 00:02:59,560 --> 00:03:03,600 Speaker 2: iPad and is it a launching point for future iPhones? 59 00:03:03,639 --> 00:03:04,840 Speaker 2: What works in the iPad? 60 00:03:05,200 --> 00:03:08,840 Speaker 6: Well, five six years ago, the iPad was really peaking, 61 00:03:09,000 --> 00:03:11,640 Speaker 6: and then it increased in sales again during the COVID 62 00:03:11,680 --> 00:03:14,320 Speaker 6: pandemic when people were just sitting at home buying a 63 00:03:14,320 --> 00:03:17,240 Speaker 6: bunch of stuff, thinking they need these things. But now 64 00:03:17,360 --> 00:03:20,040 Speaker 6: what you're seeing are bigger sales for the Mac, and 65 00:03:20,160 --> 00:03:23,200 Speaker 6: you're seeing more people buying iPhones instead of iPads because 66 00:03:23,200 --> 00:03:25,760 Speaker 6: the iPhone screen sizes have become so big. And by 67 00:03:25,800 --> 00:03:27,840 Speaker 6: the way, they're going to make the iPhone screen size 68 00:03:27,880 --> 00:03:31,359 Speaker 6: even bigger in September with the iPhone sixteen Pro line. 69 00:03:31,680 --> 00:03:34,680 Speaker 6: But the iPad certainly does have place for some people. 70 00:03:34,720 --> 00:03:38,080 Speaker 6: The problem is is that Apple's veered from the original vision. 71 00:03:38,200 --> 00:03:40,880 Speaker 6: The original vision of the iPad under Steve Jobs was 72 00:03:41,400 --> 00:03:43,720 Speaker 6: all the features and goodness of the iPhone, with a 73 00:03:43,760 --> 00:03:47,400 Speaker 6: larger screen, better for viewing photos, better for watching movies. 74 00:03:48,120 --> 00:03:50,280 Speaker 6: And then you know, about a half decade ago, they 75 00:03:50,400 --> 00:03:52,800 Speaker 6: did this odd thing where they tried to make it 76 00:03:52,880 --> 00:03:56,840 Speaker 6: a quasi laptop replacement. They added support for track pads, 77 00:03:57,120 --> 00:04:00,080 Speaker 6: they added support for more pro applications. They were at 78 00:04:00,120 --> 00:04:03,320 Speaker 6: least their own keyboard, They have that Apple pencil stylusts 79 00:04:03,720 --> 00:04:06,640 Speaker 6: and it's sort of this in between device, right It's 80 00:04:06,840 --> 00:04:10,080 Speaker 6: past the point of being the simplistic future of the computer, 81 00:04:10,360 --> 00:04:15,240 Speaker 6: and it's nowhere near a true laptop replacement. And that's problematic. 82 00:04:15,320 --> 00:04:17,599 Speaker 6: Being somewhere in between. That's probably the place you don't 83 00:04:17,600 --> 00:04:19,800 Speaker 6: want to be. And so what they really need to 84 00:04:19,800 --> 00:04:22,360 Speaker 6: do with these new iPads is pick a direction. We're 85 00:04:22,400 --> 00:04:24,840 Speaker 6: long gone from the idea of these things just being 86 00:04:24,839 --> 00:04:27,279 Speaker 6: a bigger iPhone. We no longer want them to be 87 00:04:27,360 --> 00:04:29,720 Speaker 6: these in between our devices. We want them to be 88 00:04:29,760 --> 00:04:34,640 Speaker 6: true laptop replacements. And with the improved hardware, the better screens, 89 00:04:35,040 --> 00:04:39,280 Speaker 6: the larger displays in the iPad, air, faster processors, a 90 00:04:39,320 --> 00:04:42,279 Speaker 6: new version of the keyboard and trackpad case, I'm expecting 91 00:04:42,520 --> 00:04:44,360 Speaker 6: it makes a lot of sense that these things are 92 00:04:44,360 --> 00:04:47,400 Speaker 6: going to be better for people who want to replace 93 00:04:47,440 --> 00:04:48,200 Speaker 6: their laptops. 94 00:04:48,560 --> 00:04:51,160 Speaker 2: Is there also going to be a new iOS operating 95 00:04:51,200 --> 00:04:53,560 Speaker 2: system that it's included in these new iPads. 96 00:04:53,839 --> 00:04:56,600 Speaker 6: Well, the version of iOS that's coming with these new 97 00:04:56,600 --> 00:04:59,599 Speaker 6: iPads going to be a version of iPad OS seventeen, 98 00:05:00,120 --> 00:05:02,600 Speaker 6: which came out last year. That's the current operating system. 99 00:05:03,000 --> 00:05:05,919 Speaker 6: The next operating system for the iPad that's going to 100 00:05:05,960 --> 00:05:10,719 Speaker 6: be iPad OS eighteen that won't be announced until June 101 00:05:11,000 --> 00:05:14,120 Speaker 6: June tenth actually at their developers conference. That will be 102 00:05:14,160 --> 00:05:17,880 Speaker 6: the update that includes all those new artificial intelligence features, 103 00:05:18,120 --> 00:05:21,480 Speaker 6: but that won't be released until sometime around September this year. 104 00:05:21,440 --> 00:05:24,200 Speaker 2: And September also when we should see the iPhone sixteen. 105 00:05:24,240 --> 00:05:28,440 Speaker 6: You said iPhone sixteen launch should be in September as well, 106 00:05:28,440 --> 00:05:31,480 Speaker 6: and those will be the larger displays as well as 107 00:05:31,480 --> 00:05:33,480 Speaker 6: a new button on the higher end models that you 108 00:05:33,520 --> 00:05:37,520 Speaker 6: can control the camera zoom, moving between video and photos 109 00:05:38,000 --> 00:05:41,080 Speaker 6: from the side of the phone itself versus within the software. 110 00:05:41,279 --> 00:05:43,400 Speaker 2: Now, let's talk about the iPhone for a minute, because 111 00:05:43,480 --> 00:05:47,200 Speaker 2: that sounds great. But you've reported the need to maybe 112 00:05:47,200 --> 00:05:51,040 Speaker 2: have a more affordable, mass market phone to compete against 113 00:05:51,080 --> 00:05:54,880 Speaker 2: all these rivals in China and really grow the base 114 00:05:54,960 --> 00:05:57,760 Speaker 2: of the iPhone. How close is that to a reality. 115 00:05:57,960 --> 00:06:00,279 Speaker 6: Well, I personally don't think that's going to have in 116 00:06:00,360 --> 00:06:03,560 Speaker 6: under Apple's current management. You know, they're so strong in 117 00:06:03,600 --> 00:06:08,520 Speaker 6: their principles. There's no belief internally from at least a 118 00:06:08,600 --> 00:06:11,160 Speaker 6: management team that they should release a cheaper phone. This 119 00:06:11,200 --> 00:06:14,520 Speaker 6: is something they've considered over the years. Personally, I think 120 00:06:14,560 --> 00:06:16,880 Speaker 6: this would be a way to gain market share and 121 00:06:17,000 --> 00:06:19,640 Speaker 6: push back against the issues they're having in China. It 122 00:06:19,680 --> 00:06:23,520 Speaker 6: would help them grow in India, potentially build a business 123 00:06:23,600 --> 00:06:27,120 Speaker 6: in Eastern Europe other developing markets such as those in 124 00:06:27,360 --> 00:06:32,040 Speaker 6: Africa and Southeast Asia, Vietnam, Thailand, Malaysia. But I don't 125 00:06:32,040 --> 00:06:34,400 Speaker 6: think they're going to do it at least anytime soon. 126 00:06:34,600 --> 00:06:37,640 Speaker 6: There certainly isn't one in development right now. The idea 127 00:06:37,680 --> 00:06:40,560 Speaker 6: would be, you go to gain market share, make probably 128 00:06:40,560 --> 00:06:42,920 Speaker 6: no profit on the phone itself, make up for that 129 00:06:43,000 --> 00:06:46,800 Speaker 6: on apps and other services subscriptions, and then as the 130 00:06:46,880 --> 00:06:50,440 Speaker 6: middle class expands in those developing markets, you're able to 131 00:06:50,480 --> 00:06:53,280 Speaker 6: pitch those people who are already in the Apple ecosystem 132 00:06:53,400 --> 00:06:57,440 Speaker 6: on more expensive price your iPhones, where Apple could ultimately 133 00:06:57,440 --> 00:06:58,159 Speaker 6: make its profit. 134 00:06:58,480 --> 00:07:02,120 Speaker 2: Oh but this Tuesday, May Apple's latest product launch all 135 00:07:02,160 --> 00:07:05,680 Speaker 2: about new iPads and our thanks to Mark German, Bloomberg 136 00:07:05,760 --> 00:07:09,359 Speaker 2: Chief correspondent on Global Technology. Well, we move now to 137 00:07:09,400 --> 00:07:13,040 Speaker 2: the entertainment and media company Walt Disney, with Disney reporting 138 00:07:13,120 --> 00:07:16,000 Speaker 2: second quarter earnings this coming Tuesday, and for more on 139 00:07:16,080 --> 00:07:20,320 Speaker 2: what to expect, we're joined by Geetha. Raganathin Bloomberg Intelligence 140 00:07:20,320 --> 00:07:23,600 Speaker 2: Analysts on US media. So gather, what are you expecting 141 00:07:23,640 --> 00:07:25,520 Speaker 2: to see in Tuesday's earnings? 142 00:07:25,840 --> 00:07:29,000 Speaker 7: Thank you so much, Tom So. Disney actually is just 143 00:07:29,160 --> 00:07:33,480 Speaker 7: fresh after winning a very very contentious proxy battle. If 144 00:07:33,480 --> 00:07:36,240 Speaker 7: you remember that whole showdown that they had with Nelson Bells. 145 00:07:37,080 --> 00:07:39,760 Speaker 7: They've gotten through that and now they are really ready 146 00:07:39,800 --> 00:07:43,560 Speaker 7: to focus on execution. So there's a whole range of 147 00:07:43,640 --> 00:07:46,760 Speaker 7: initiatives that they've been working really hard on, which is 148 00:07:46,800 --> 00:07:51,480 Speaker 7: cost cutting, increasing financial visibility, and also really working hard 149 00:07:51,480 --> 00:07:54,400 Speaker 7: on kind of reintegrating their content engines. And we look 150 00:07:54,440 --> 00:07:58,000 Speaker 7: at this as catalysts. There's already been a change in sentiment, 151 00:07:58,040 --> 00:07:59,600 Speaker 7: and we're going to continue to see that change in 152 00:07:59,640 --> 00:08:04,200 Speaker 7: sentiment playouts as they report their fiscal second quarter earnings. 153 00:08:04,760 --> 00:08:06,600 Speaker 7: There's a lot of things to kind of look to. 154 00:08:06,680 --> 00:08:08,520 Speaker 7: I think the two major things are, of course going 155 00:08:08,520 --> 00:08:11,520 Speaker 7: to be the parks business, where you know they've kind 156 00:08:11,560 --> 00:08:15,520 Speaker 7: of guided to low teen's growth in operating income, as 157 00:08:15,560 --> 00:08:18,720 Speaker 7: well as the streaming business, where we are almost tom 158 00:08:19,160 --> 00:08:22,040 Speaker 7: on the brink of profitability, and that should really get 159 00:08:22,040 --> 00:08:23,120 Speaker 7: investors excited. 160 00:08:23,280 --> 00:08:25,920 Speaker 2: Well, that's a big change. How has the return of 161 00:08:25,960 --> 00:08:29,760 Speaker 2: Bob Iger really helped Disney in this direction, whether streamlining 162 00:08:29,800 --> 00:08:32,880 Speaker 2: operations more cost effective or just taking charge. 163 00:08:33,160 --> 00:08:35,600 Speaker 7: Yeah, I mean he's been instrumental Tom and kind of 164 00:08:36,240 --> 00:08:39,320 Speaker 7: really writing the ship, if you will here. So obviously 165 00:08:39,320 --> 00:08:43,079 Speaker 7: when he came back, things were pretty messy, especially with 166 00:08:43,200 --> 00:08:47,080 Speaker 7: regards to kind of the whole content pipeline and just 167 00:08:47,360 --> 00:08:50,560 Speaker 7: you know, the whole series of missteps with their content, 168 00:08:50,559 --> 00:08:52,079 Speaker 7: whether it was on the film side or even on 169 00:08:52,120 --> 00:08:54,840 Speaker 7: the TV series side. Obviously, those things take a little 170 00:08:54,840 --> 00:08:56,679 Speaker 7: bit of time, but I think what he has really 171 00:08:56,679 --> 00:09:00,600 Speaker 7: managed to do quickly is to articulate a strategy strategy 172 00:09:00,640 --> 00:09:03,600 Speaker 7: with you know, the streaming business, front and center cost 173 00:09:03,600 --> 00:09:06,080 Speaker 7: cutting initiatives. You know, they first started out with about 174 00:09:06,080 --> 00:09:08,079 Speaker 7: five and a half billion in cost savings per year. 175 00:09:08,160 --> 00:09:09,679 Speaker 7: They've kind of ben up that to seven and a 176 00:09:09,679 --> 00:09:13,240 Speaker 7: half billion, and then just overall kind of making sure 177 00:09:13,280 --> 00:09:15,400 Speaker 7: that the business is on a really strong footing. So 178 00:09:15,440 --> 00:09:17,719 Speaker 7: if you kind of look at Disney, yes, we tend 179 00:09:17,800 --> 00:09:19,920 Speaker 7: to focus a lot on on you know, the TV 180 00:09:20,040 --> 00:09:23,720 Speaker 7: networks ESPN, and you know, maybe some movies and then 181 00:09:23,720 --> 00:09:26,840 Speaker 7: the studio, but if you actually look at the business profiles, 182 00:09:26,960 --> 00:09:31,160 Speaker 7: seventy percent sixty five to seventy percent off Disney's profit 183 00:09:31,320 --> 00:09:34,760 Speaker 7: comes from its theme park business. And so what you 184 00:09:34,840 --> 00:09:37,239 Speaker 7: know Bob has done, obviously is they've kind of articulated 185 00:09:37,240 --> 00:09:41,240 Speaker 7: a plan now to really reinvest in that business. It's 186 00:09:41,320 --> 00:09:43,160 Speaker 7: it's sixty billion dollars that they're going to spend over 187 00:09:43,160 --> 00:09:45,600 Speaker 7: the next ten years, and then with regards to the 188 00:09:45,640 --> 00:09:48,480 Speaker 7: rest of the segments, kind of again make sure that 189 00:09:48,520 --> 00:09:51,200 Speaker 7: you know content, Content, of course, is kind of the 190 00:09:51,240 --> 00:09:53,800 Speaker 7: lifeblood here at Disney, so just kind of make sure 191 00:09:53,840 --> 00:09:55,920 Speaker 7: that they have a strong content pipeline which will then 192 00:09:55,960 --> 00:09:57,160 Speaker 7: feed into everything else. 193 00:09:57,760 --> 00:10:00,640 Speaker 2: Well, that's seventy percent of revenue at the and those 194 00:10:00,679 --> 00:10:03,840 Speaker 2: theme parks never seem to be without tons of people, 195 00:10:03,880 --> 00:10:05,480 Speaker 2: So that's good news. But let's go back to what 196 00:10:05,480 --> 00:10:09,280 Speaker 2: you said about the streaming services and being close to 197 00:10:09,360 --> 00:10:12,440 Speaker 2: being profitable. I know that Disney just made a deal 198 00:10:12,480 --> 00:10:16,040 Speaker 2: with Kroger, the nation's biggest supermarket chain for Disney plus 199 00:10:16,280 --> 00:10:17,360 Speaker 2: what can you tell us about that? 200 00:10:17,640 --> 00:10:20,360 Speaker 7: Yeah, so, I mean they are doing all these deals, 201 00:10:20,360 --> 00:10:23,280 Speaker 7: and again the main objective here, Tom, is to make 202 00:10:23,320 --> 00:10:26,760 Speaker 7: sure that you know, subscriber momentum is maintained. But as 203 00:10:26,800 --> 00:10:29,960 Speaker 7: you know, streaming is no longer just about subscribers. It 204 00:10:30,040 --> 00:10:34,320 Speaker 7: is also about being profitable. We know Netflix has kind 205 00:10:34,320 --> 00:10:38,640 Speaker 7: of really established the narrative here, turning out about you know, 206 00:10:38,720 --> 00:10:41,959 Speaker 7: eight nine ten billion dollars in profit. Disney is going 207 00:10:42,000 --> 00:10:44,720 Speaker 7: to be next. So they have lost tons of money, 208 00:10:44,720 --> 00:10:46,839 Speaker 7: almost close about eight billion dollars or so on their 209 00:10:46,840 --> 00:10:50,920 Speaker 7: streaming business since launch. But the good news, and this 210 00:10:51,040 --> 00:10:53,600 Speaker 7: is something that investors are excited about, is that this 211 00:10:53,720 --> 00:10:56,520 Speaker 7: is really just on the cusp of turning profitable. It 212 00:10:56,520 --> 00:10:59,040 Speaker 7: could very well have been in the quarter that they're 213 00:10:59,080 --> 00:11:00,960 Speaker 7: about to report, or if not, it'll be in the 214 00:11:01,000 --> 00:11:04,000 Speaker 7: next quarter. And the idea here is that it is 215 00:11:04,040 --> 00:11:06,920 Speaker 7: going to keep getting more and more profitable. And we 216 00:11:07,000 --> 00:11:09,480 Speaker 7: have a lot of catalysts on the horizon. So, yes, 217 00:11:09,520 --> 00:11:11,880 Speaker 7: you have subscriber growth, but I think more important than 218 00:11:11,920 --> 00:11:15,240 Speaker 7: that is, you know, price increases, which they are definitely 219 00:11:15,280 --> 00:11:18,479 Speaker 7: going to implement going forward, and that will be bolstered 220 00:11:18,520 --> 00:11:22,120 Speaker 7: by a really good content pipeline. They are also cracking 221 00:11:22,200 --> 00:11:26,040 Speaker 7: down on passwords sharing alain Netflix, and then of course 222 00:11:26,040 --> 00:11:28,680 Speaker 7: they have the ad tier, and then with the integration 223 00:11:28,760 --> 00:11:32,200 Speaker 7: of Hulu, you know, you have multiple positive elements that 224 00:11:32,240 --> 00:11:35,679 Speaker 7: are really kind of going to get this virtuous cycle going. 225 00:11:36,320 --> 00:11:38,400 Speaker 2: Do you think there's going to be any update on 226 00:11:38,480 --> 00:11:41,840 Speaker 2: the sports streaming partnership with Fox and Warner Brothers that 227 00:11:41,920 --> 00:11:43,200 Speaker 2: was talked about a few months ago. 228 00:11:43,600 --> 00:11:46,360 Speaker 7: Yeah, that is actually supposed to come out sometime in 229 00:11:46,400 --> 00:11:49,200 Speaker 7: the fall. There have been you know, a couple of 230 00:11:49,200 --> 00:11:53,560 Speaker 7: regulatory issues surrounding that, you know, yeah, probably. I mean 231 00:11:53,640 --> 00:11:56,120 Speaker 7: I think they are definitely going to be asked how 232 00:11:56,160 --> 00:11:58,680 Speaker 7: far along they are in terms of the infrastructure and 233 00:11:58,720 --> 00:12:00,800 Speaker 7: the setup, and you know, if they're ready to kind 234 00:12:00,840 --> 00:12:04,280 Speaker 7: of show a test version of that, which I'm sure 235 00:12:04,280 --> 00:12:07,040 Speaker 7: they are, given that upfronts is coming up pretty soon. 236 00:12:07,280 --> 00:12:07,439 Speaker 4: Now. 237 00:12:07,480 --> 00:12:09,040 Speaker 2: One last thing I want to ask you about is 238 00:12:09,040 --> 00:12:12,719 Speaker 2: the studio division still suffering like all of Hollywood from 239 00:12:12,720 --> 00:12:16,280 Speaker 2: those twin strikes last year. What can we look forward to? 240 00:12:16,920 --> 00:12:19,839 Speaker 7: I mean, they really had a pretty bad year last year, 241 00:12:19,960 --> 00:12:21,960 Speaker 7: but the good news is they're really kind of back 242 00:12:22,000 --> 00:12:24,880 Speaker 7: on track in terms of executing on creative. They're improving 243 00:12:24,920 --> 00:12:27,720 Speaker 7: their studio output. So as you look forward to twenty 244 00:12:27,760 --> 00:12:29,920 Speaker 7: twenty four, you know, we do have kind of this 245 00:12:30,000 --> 00:12:33,760 Speaker 7: refreshed content slate. We're looking at Inside Out two and Deadpool, 246 00:12:33,960 --> 00:12:36,320 Speaker 7: both of which promised to be really big summer movies. 247 00:12:36,640 --> 00:12:39,120 Speaker 7: But where we're really excited about is twenty twenty five. 248 00:12:39,360 --> 00:12:42,200 Speaker 7: You have a whole array of you know, what we 249 00:12:42,280 --> 00:12:45,640 Speaker 7: think would all be blockbuster movies, whether it's Captain America's Norwide. 250 00:12:45,760 --> 00:12:47,480 Speaker 7: So Disney is really getting its mojo back. 251 00:12:47,640 --> 00:12:49,679 Speaker 2: Yeah, a lot of twos a lot of threes after 252 00:12:49,679 --> 00:12:52,760 Speaker 2: those movie titles. But give the people what they want. 253 00:12:52,960 --> 00:12:53,120 Speaker 5: Well. 254 00:12:53,160 --> 00:12:56,320 Speaker 2: Disney second quarter earnings out after the close this Tuesday, 255 00:12:56,360 --> 00:12:59,200 Speaker 2: May seventh, and our thanks to get the raganaffin Bloomberg 256 00:12:59,240 --> 00:13:03,000 Speaker 2: Intelligence Animals on US Media. Coming up on Bloomberg day 257 00:13:03,000 --> 00:13:05,600 Speaker 2: Break weekend to look at the Bank of England's upcoming 258 00:13:05,640 --> 00:13:19,760 Speaker 2: policy meeting. I'm Tom Busby and this is Bloomberg. This 259 00:13:19,920 --> 00:13:22,240 Speaker 2: is Bloomberg day Break weekend, our global look at the 260 00:13:22,240 --> 00:13:25,120 Speaker 2: top stories for investors in the coming week. I'm Tom 261 00:13:25,160 --> 00:13:28,240 Speaker 2: Busby in New York. Up later in our program, Chinese 262 00:13:28,240 --> 00:13:31,920 Speaker 2: President Shijin Ping visits Europe. Will it help repair relations 263 00:13:32,160 --> 00:13:35,880 Speaker 2: between China and the continent. But first in the UK, 264 00:13:36,160 --> 00:13:39,920 Speaker 2: recent hotter than expected inflation figures coupled with a strong 265 00:13:40,040 --> 00:13:42,480 Speaker 2: labor market may have put the breaks on hopes that 266 00:13:42,520 --> 00:13:45,280 Speaker 2: the Bank of England is poised to begin cutting interest 267 00:13:45,360 --> 00:13:48,679 Speaker 2: rates in the coming days. Threadneedle Streets decision makers will 268 00:13:48,760 --> 00:13:52,400 Speaker 2: vote once again. So will they stick with elevated borrowing 269 00:13:52,440 --> 00:13:55,120 Speaker 2: costs or take the plunge for more. Let's go to 270 00:13:55,160 --> 00:13:58,439 Speaker 2: London and bring in Bloomberg day Break Europe anchor Stephen. 271 00:13:58,160 --> 00:14:01,400 Speaker 3: Carroll, Tom stop me if you've heard this one before, 272 00:14:01,480 --> 00:14:04,080 Speaker 3: but since the start of the year, traders have scaled 273 00:14:04,200 --> 00:14:08,280 Speaker 3: back their expectation for interest rate cuts. Okay, that's been 274 00:14:08,280 --> 00:14:10,920 Speaker 3: the situation facing many central banks around the world. In 275 00:14:10,960 --> 00:14:14,120 Speaker 3: the UK, it's a mildly hawkish run of data that's 276 00:14:14,200 --> 00:14:17,040 Speaker 3: giving some pause for thought on top of what's been 277 00:14:17,040 --> 00:14:20,720 Speaker 3: happening with central bankers elsewhere. CPI inflation came in at 278 00:14:20,760 --> 00:14:23,560 Speaker 3: three point two percent in March in the UK, down 279 00:14:23,600 --> 00:14:27,000 Speaker 3: from three point four percent in February. That was slightly 280 00:14:27,040 --> 00:14:30,600 Speaker 3: ahead of the Bank of England's forecast, though, but BOE 281 00:14:30,680 --> 00:14:34,280 Speaker 3: Governor Andrew Bailey didn't seem phased and assured markets that 282 00:14:34,320 --> 00:14:37,240 Speaker 3: things were still on track. We've been getting the market 283 00:14:37,320 --> 00:14:39,720 Speaker 3: view of the rate path ahead for the UK with 284 00:14:39,840 --> 00:14:43,280 Speaker 3: Hugh Ginberg, global market strategist at JP Morgan Chase Bank. 285 00:14:43,720 --> 00:14:45,800 Speaker 8: I think, really what the market is grappling with here 286 00:14:46,240 --> 00:14:49,200 Speaker 8: is does the UK look more like the Eurozone or 287 00:14:49,240 --> 00:14:51,440 Speaker 8: more like the US? Because I go back twelve months 288 00:14:51,480 --> 00:14:54,240 Speaker 8: ago and the answer to that was categorically that the 289 00:14:54,360 --> 00:14:56,960 Speaker 8: UK looked a lot more like the US economy, where 290 00:14:56,960 --> 00:14:59,320 Speaker 8: you had the tightness of the labor market, you had 291 00:14:59,440 --> 00:15:03,560 Speaker 8: much strong inflation pressure, whereas today I think, arguably it's 292 00:15:03,600 --> 00:15:06,800 Speaker 8: a lot more Eurozone like where yes, inflation is still higher, 293 00:15:07,160 --> 00:15:10,040 Speaker 8: but inflation is coming down. It's going to come down 294 00:15:10,080 --> 00:15:12,680 Speaker 8: significantly further over the next couple of months as that 295 00:15:13,080 --> 00:15:16,520 Speaker 8: energy household price cap reset kicks in, and so I 296 00:15:16,560 --> 00:15:18,560 Speaker 8: do think the bank will be able to follow the 297 00:15:18,600 --> 00:15:21,160 Speaker 8: path more like the ECB than the Fed. I personally 298 00:15:21,240 --> 00:15:24,320 Speaker 8: think they start the rate cutting process in August. But 299 00:15:24,400 --> 00:15:28,480 Speaker 8: again we're talking about relatively modest adjustments to interest rates, 300 00:15:28,480 --> 00:15:31,200 Speaker 8: and so for bond investors, the main message here is 301 00:15:31,200 --> 00:15:34,200 Speaker 8: that you're playing for really clipping the coupon in government 302 00:15:34,240 --> 00:15:39,160 Speaker 8: bond deals today, with the potential for capital appreciation if 303 00:15:39,200 --> 00:15:42,480 Speaker 8: the economy slows much more quickly. But I don't see 304 00:15:42,520 --> 00:15:45,360 Speaker 8: a kind of straight line lower for bond yields until 305 00:15:45,400 --> 00:15:47,480 Speaker 8: we get much weaker economic data than what we have 306 00:15:47,600 --> 00:15:48,080 Speaker 8: at the moment. 307 00:15:48,520 --> 00:15:50,720 Speaker 3: Do you think that Andrew Bailey is in a position 308 00:15:50,760 --> 00:15:53,720 Speaker 3: to be able to give clear signals given the sort 309 00:15:53,720 --> 00:15:55,200 Speaker 3: of uncertainty that exists elsewhere. 310 00:15:55,680 --> 00:15:58,280 Speaker 8: No, But then let me, if I may flip your 311 00:15:58,360 --> 00:15:59,840 Speaker 8: question the other way around and say, well, should he 312 00:15:59,840 --> 00:16:03,000 Speaker 8: be giving clear signals? No, he shouldn't because all central 313 00:16:03,000 --> 00:16:06,600 Speaker 8: bankers are struggling to read the inflation data, just as 314 00:16:06,680 --> 00:16:08,960 Speaker 8: markets are trying to predict over the next one to 315 00:16:08,960 --> 00:16:11,560 Speaker 8: two months. Are we going to get point threes or 316 00:16:11,600 --> 00:16:14,040 Speaker 8: point four's? It is nigh on impossible in this current 317 00:16:14,080 --> 00:16:16,840 Speaker 8: economic environment, and so I think the right approach for 318 00:16:16,920 --> 00:16:20,320 Speaker 8: central bankers today is to take stock of the incoming 319 00:16:20,400 --> 00:16:23,120 Speaker 8: data that they've seen, but try to keep that medium 320 00:16:23,200 --> 00:16:26,280 Speaker 8: term view because they're trying to set policy here over 321 00:16:26,320 --> 00:16:29,080 Speaker 8: the next twelve, twenty four to thirty six months. They 322 00:16:29,120 --> 00:16:31,800 Speaker 8: shouldn't be swung around by just what the last one 323 00:16:31,880 --> 00:16:33,840 Speaker 8: or two weeks of data has been telling them. The 324 00:16:33,880 --> 00:16:36,280 Speaker 8: blanky reviewer missed opportunity, yes or no. 325 00:16:37,000 --> 00:16:39,680 Speaker 3: Ah, good politician Lizzy. 326 00:16:40,080 --> 00:16:40,960 Speaker 8: Could they have gone further? 327 00:16:41,040 --> 00:16:41,280 Speaker 3: Yes? 328 00:16:41,720 --> 00:16:43,720 Speaker 8: I think that it could. I mean there is some 329 00:16:44,160 --> 00:16:47,480 Speaker 8: useful points there in terms of trying to communicate more clearly. 330 00:16:47,520 --> 00:16:50,320 Speaker 8: I think everyone would welcome more guidance from the Bank 331 00:16:50,360 --> 00:16:53,640 Speaker 8: of England in terms of how they're seeing the economy. 332 00:16:54,080 --> 00:16:56,440 Speaker 8: But do you want a dot plot in the UK, 333 00:16:56,520 --> 00:16:57,680 Speaker 8: for example, I would argue no. 334 00:16:58,120 --> 00:17:00,840 Speaker 3: So that was Hugh Gimberg Global Markets Strated US at 335 00:17:00,920 --> 00:17:04,639 Speaker 3: JP Morgan Chase. It's worthwhile, too thinking about how the 336 00:17:04,680 --> 00:17:08,240 Speaker 3: Bank of England behaves versus its peers. Members of the 337 00:17:08,240 --> 00:17:11,000 Speaker 3: Monetary Policy Committee have an advantage in that this meeting 338 00:17:11,080 --> 00:17:14,359 Speaker 3: is coming just a week after the FEDS, when Jerome 339 00:17:14,440 --> 00:17:17,720 Speaker 3: Powell signaled that they were further away from cutting rates 340 00:17:17,760 --> 00:17:20,879 Speaker 3: than before. The European Central Bank has signaled strongly that 341 00:17:20,920 --> 00:17:23,479 Speaker 3: it's planning to cut rates at its June meeting as 342 00:17:23,520 --> 00:17:26,240 Speaker 3: it grows more confident that inflation is continuing to slow. 343 00:17:26,640 --> 00:17:30,000 Speaker 3: So how will the BOE fit into what's happening elsewhere. 344 00:17:30,119 --> 00:17:32,240 Speaker 3: I've been discussing the outlook for the upcoming meeting with 345 00:17:32,240 --> 00:17:35,960 Speaker 3: Bloomberg's chief UK economist Dan Hansen. I started by asking 346 00:17:36,040 --> 00:17:39,280 Speaker 3: him what's changed for the BOE since its last meeting 347 00:17:39,320 --> 00:17:40,800 Speaker 3: on the twenty first of March. 348 00:17:41,160 --> 00:17:42,840 Speaker 9: I don't think a huge amount has changed, to be 349 00:17:42,880 --> 00:17:45,399 Speaker 9: honest with you. We've had a few upside data surprises, 350 00:17:45,640 --> 00:17:47,480 Speaker 9: but they were very, very small, and if you look 351 00:17:47,520 --> 00:17:50,040 Speaker 9: at see the most important thing, what happened to inflation 352 00:17:50,080 --> 00:17:52,000 Speaker 9: over the first quarter. It came in at three point 353 00:17:52,040 --> 00:17:54,280 Speaker 9: five percent. The Bank of England's forecast in February, the 354 00:17:54,320 --> 00:17:56,440 Speaker 9: last time it put a forecast together, was three point 355 00:17:56,480 --> 00:17:59,840 Speaker 9: six percent, so a little bit below, but for me, actually, 356 00:17:59,840 --> 00:18:02,680 Speaker 9: what's been most interesting is what policy makers have been saying, 357 00:18:02,680 --> 00:18:05,240 Speaker 9: which is what you alluded to there, And we've had 358 00:18:05,640 --> 00:18:10,080 Speaker 9: remarks from certainly Bailey, Andrew Bailey and Dave Ramsden that 359 00:18:10,200 --> 00:18:12,600 Speaker 9: are very much sort of moving in I would say, 360 00:18:12,640 --> 00:18:15,000 Speaker 9: the dubvish direction. There's a little bit of uncertainty. I 361 00:18:15,000 --> 00:18:17,240 Speaker 9: think about what Hugh pill did or didn't say in 362 00:18:17,280 --> 00:18:19,840 Speaker 9: his speech, but I think the thing for us that 363 00:18:19,880 --> 00:18:21,760 Speaker 9: we took away at least is that there he said 364 00:18:21,760 --> 00:18:24,679 Speaker 9: that there's been little news in the data, which is 365 00:18:24,800 --> 00:18:27,760 Speaker 9: obviously clearly very important. So I think to answer your 366 00:18:27,800 --> 00:18:30,480 Speaker 9: question directly, whatever you believe sort of following the March meeting, 367 00:18:31,000 --> 00:18:34,199 Speaker 9: the Bank would do at least looking domestically, and we'll 368 00:18:34,200 --> 00:18:36,840 Speaker 9: probably get onto the Fed in a second. There is 369 00:18:36,880 --> 00:18:39,560 Speaker 9: a much reason to change. You're thinking about the when 370 00:18:39,600 --> 00:18:40,520 Speaker 9: the first cut will come? 371 00:18:41,000 --> 00:18:43,199 Speaker 3: Okay, well, let's deal with the fetish and we'll come 372 00:18:43,240 --> 00:18:45,760 Speaker 3: back to the split on the committee in a moment. 373 00:18:46,240 --> 00:18:49,439 Speaker 3: How much does the signals that we got from Jerome 374 00:18:49,520 --> 00:18:52,760 Speaker 3: Powell that Ratcot's look further away than they did before. 375 00:18:52,800 --> 00:18:54,840 Speaker 3: How much does that affect the BOE. 376 00:18:54,880 --> 00:18:58,199 Speaker 9: So markets think it affects the BOE quite significantly. If 377 00:18:58,200 --> 00:19:00,159 Speaker 9: you look at the way BOE pricing has moved, if 378 00:19:00,200 --> 00:19:02,560 Speaker 9: you look at the way FED pricing has moved, they've 379 00:19:02,640 --> 00:19:05,840 Speaker 9: essentially moved in locksteps. So what's interesting is I think 380 00:19:05,880 --> 00:19:10,160 Speaker 9: the comments that Bailey made about that that the UK's 381 00:19:10,200 --> 00:19:13,399 Speaker 9: inflation problem is more like a European inflation problem, so 382 00:19:13,440 --> 00:19:16,879 Speaker 9: the problem facing ECB than it is like the US's 383 00:19:17,160 --> 00:19:20,320 Speaker 9: demand led inflation problem, and I sort of am inclined 384 00:19:20,359 --> 00:19:22,440 Speaker 9: to agree with that. Particularly this year, I think there's 385 00:19:22,480 --> 00:19:25,840 Speaker 9: going to be this quite big divergence between the UK 386 00:19:26,040 --> 00:19:29,199 Speaker 9: and US inflation story, mainly driven by energy, but that 387 00:19:29,320 --> 00:19:31,880 Speaker 9: sort of spills through into the rest of the CPI basket. 388 00:19:32,040 --> 00:19:35,439 Speaker 9: So I don't think the FED going later is an 389 00:19:35,440 --> 00:19:37,479 Speaker 9: impediment to the BOE. I think it can go before 390 00:19:37,560 --> 00:19:39,840 Speaker 9: the FED. And actually, one thing that the BOE has 391 00:19:39,840 --> 00:19:42,199 Speaker 9: got to be really quite careful about is that it 392 00:19:42,240 --> 00:19:46,359 Speaker 9: doesn't allow what's happened recently. So they're tightening of financial 393 00:19:46,359 --> 00:19:49,320 Speaker 9: conditions to spill into the UK economy and we've seen 394 00:19:49,320 --> 00:19:51,480 Speaker 9: that affect some metrics in the economy already. If we 395 00:19:51,520 --> 00:19:54,880 Speaker 9: think about house prices and the like, and mortgage rates. 396 00:19:55,640 --> 00:19:57,080 Speaker 9: You know, the bo needs to be wary of that. 397 00:19:57,080 --> 00:19:59,680 Speaker 9: Everyone talks about the exchange rate impact of going earlier 398 00:19:59,680 --> 00:20:01,840 Speaker 9: than the f but actually what you also need to 399 00:20:01,840 --> 00:20:05,359 Speaker 9: be worried about is allowing tie to financial conditions to 400 00:20:05,359 --> 00:20:08,439 Speaker 9: affect your domestic economy when your domestic economy is already 401 00:20:08,520 --> 00:20:08,920 Speaker 9: very weak. 402 00:20:10,080 --> 00:20:14,119 Speaker 3: What is your expectation there in terms of the inflation trajectory, 403 00:20:14,240 --> 00:20:16,480 Speaker 3: I mean, when when does the two percent target look 404 00:20:16,640 --> 00:20:17,359 Speaker 3: likely to be his? 405 00:20:17,840 --> 00:20:19,879 Speaker 9: I think in the next few months. I mean it 406 00:20:19,960 --> 00:20:22,920 Speaker 9: might not quite get there in April. I think May 407 00:20:23,160 --> 00:20:25,960 Speaker 9: or June are pretty good bets for when we'll get 408 00:20:25,960 --> 00:20:28,720 Speaker 9: to two or even below two in fact. So I 409 00:20:28,720 --> 00:20:31,320 Speaker 9: mean what one really important consideration I think when you 410 00:20:31,359 --> 00:20:33,520 Speaker 9: think about that, is that the bank will have the 411 00:20:33,600 --> 00:20:36,760 Speaker 9: May CPI print before the June meeting, and I think 412 00:20:36,800 --> 00:20:38,760 Speaker 9: that will It'll be very hard if you have a 413 00:20:39,040 --> 00:20:40,720 Speaker 9: too or even particularly if you have a sub two 414 00:20:40,720 --> 00:20:44,560 Speaker 9: percent CPI inflation print in your hand not to do something. 415 00:20:44,880 --> 00:20:46,960 Speaker 9: So I think that for us is sort of the 416 00:20:47,000 --> 00:20:49,439 Speaker 9: next few months of data after this, after we get 417 00:20:49,480 --> 00:20:51,520 Speaker 9: past this meeting. The data between the May and the 418 00:20:51,600 --> 00:20:53,520 Speaker 9: GEME meeting are basically key, and I think that will 419 00:20:53,520 --> 00:20:55,040 Speaker 9: set the tone for the rest of the year. In 420 00:20:55,160 --> 00:20:57,240 Speaker 9: terms of what the bank thinks it can or can't deliver. 421 00:20:57,520 --> 00:21:00,200 Speaker 3: We talk a lot about the FAD's influence over those 422 00:21:00,200 --> 00:21:03,920 Speaker 3: central banks. What about the European Central Bank? If the 423 00:21:04,080 --> 00:21:06,360 Speaker 3: Bank of England has a similar inflation problem in large 424 00:21:06,400 --> 00:21:08,639 Speaker 3: Bailey's eyes to the ECB, does that mean actually the 425 00:21:08,680 --> 00:21:11,720 Speaker 3: ECB decision, which is widely telegraphed for June, is likely 426 00:21:11,760 --> 00:21:13,240 Speaker 3: to influence the BOW decision. 427 00:21:13,320 --> 00:21:15,720 Speaker 9: Well, I think it will help that the ECB just 428 00:21:15,840 --> 00:21:19,080 Speaker 9: chronologically goes first, so in June, their meeting is before 429 00:21:19,119 --> 00:21:20,560 Speaker 9: the banks, so I think there will be a bit 430 00:21:20,600 --> 00:21:22,920 Speaker 9: of cover there. As you say, Bailey has made that 431 00:21:23,160 --> 00:21:27,359 Speaker 9: comparison to Europe more than to the US, and you 432 00:21:27,480 --> 00:21:30,399 Speaker 9: take that alongside the fact that you will potentially have 433 00:21:30,440 --> 00:21:33,720 Speaker 9: a very favorable CPI print in hand. I think the 434 00:21:33,760 --> 00:21:37,280 Speaker 9: sort of cards are aligning for you know, we think 435 00:21:37,320 --> 00:21:39,960 Speaker 9: it's June. A lot of other economists think it's August, 436 00:21:40,080 --> 00:21:42,600 Speaker 9: but sometime in the summer for them to move. So 437 00:21:42,880 --> 00:21:44,480 Speaker 9: I think, yeah, the ECB is sort of I think 438 00:21:44,480 --> 00:21:47,080 Speaker 9: it's an important thing for the bank to have a 439 00:21:47,080 --> 00:21:50,160 Speaker 9: bit of cover there. The ECB's gone, there's no sort 440 00:21:50,160 --> 00:21:51,760 Speaker 9: of reason for the banks to sort of sit on 441 00:21:51,800 --> 00:21:52,320 Speaker 9: its hands. 442 00:21:53,119 --> 00:21:55,040 Speaker 3: What about the rest of the year. Then after the 443 00:21:55,440 --> 00:21:57,399 Speaker 3: kind of first cut that we're looking at in that 444 00:21:57,440 --> 00:21:59,960 Speaker 3: summer period, is it going to be kind of start 445 00:22:00,080 --> 00:22:02,360 Speaker 3: start depending on the data, do you think, or on 446 00:22:02,359 --> 00:22:04,080 Speaker 3: Once we get a first cutter we look like what 447 00:22:04,160 --> 00:22:05,600 Speaker 3: we are on a steady trajectory. 448 00:22:05,840 --> 00:22:07,720 Speaker 9: So I mean it goes back to my answer to 449 00:22:07,720 --> 00:22:10,600 Speaker 9: the first question is that whatever you believed following even 450 00:22:10,640 --> 00:22:14,159 Speaker 9: the February meeting, but certainly the March meeting, it feels 451 00:22:14,160 --> 00:22:16,720 Speaker 9: like you should probably still believe something pretty close to 452 00:22:16,760 --> 00:22:19,600 Speaker 9: that now. So we still have meeting by meeting at 453 00:22:19,680 --> 00:22:22,160 Speaker 9: least for a time, and that's a lot more aggressive 454 00:22:22,160 --> 00:22:25,080 Speaker 9: than market pricing. I think for market pricing to be 455 00:22:25,119 --> 00:22:27,600 Speaker 9: born out, you would have to have quite some bumps 456 00:22:27,600 --> 00:22:29,760 Speaker 9: in the road. But if you're sitting at two sub 457 00:22:29,800 --> 00:22:33,919 Speaker 9: two percent headline CPI inflation and services inflation continues to fall, 458 00:22:34,359 --> 00:22:36,800 Speaker 9: albeit slowly, and you have to sort of expect it 459 00:22:36,800 --> 00:22:38,280 Speaker 9: to fall slowly. It's not going to drop like a 460 00:22:38,280 --> 00:22:41,359 Speaker 9: stone like the headline rate has. I don't see any 461 00:22:41,400 --> 00:22:43,640 Speaker 9: reason why they can't move, as I say, at least initially, 462 00:22:43,680 --> 00:22:45,600 Speaker 9: meeting by meeting. I think they'll come a point and 463 00:22:45,600 --> 00:22:47,760 Speaker 9: I think it's around about the four percent mark where 464 00:22:47,760 --> 00:22:50,639 Speaker 9: they get a little bit concerned about where what we 465 00:22:50,680 --> 00:22:52,800 Speaker 9: call the neutral rate is to the rate that neither 466 00:22:52,840 --> 00:22:55,080 Speaker 9: speeds up or slows down the economy. But I think 467 00:22:55,119 --> 00:22:57,280 Speaker 9: there is room between sort of where we are now 468 00:22:57,280 --> 00:23:00,560 Speaker 9: and around four percent to potentially take out what they're 469 00:23:00,560 --> 00:23:04,280 Speaker 9: calling restriction in the policy stance and sort of it 470 00:23:04,320 --> 00:23:05,960 Speaker 9: basically eased the squeeze on the economy. 471 00:23:06,560 --> 00:23:08,880 Speaker 3: What are the risks to the inflation outlook that you'll 472 00:23:08,880 --> 00:23:11,439 Speaker 3: be watching. I mean, you mentioned energy. We had that 473 00:23:11,480 --> 00:23:13,720 Speaker 3: spike and oil prices which are sort of receded now, 474 00:23:13,760 --> 00:23:15,440 Speaker 3: so that seems to be a little bit out of 475 00:23:15,440 --> 00:23:17,040 Speaker 3: the picture. But is it still energy the thing you'd 476 00:23:17,040 --> 00:23:17,600 Speaker 3: worry about. 477 00:23:17,840 --> 00:23:20,160 Speaker 9: Yeah, I mean I think I think it's energy. And 478 00:23:20,600 --> 00:23:23,760 Speaker 9: to without wanting to sort of tout the speech too much, 479 00:23:25,280 --> 00:23:28,600 Speaker 9: how Dave Ramsden sort of characterized the whole thing is 480 00:23:28,640 --> 00:23:31,040 Speaker 9: that I just feel there's not enough weight being placed 481 00:23:31,080 --> 00:23:34,120 Speaker 9: on the downside risk here. You know the way inflation 482 00:23:34,280 --> 00:23:36,160 Speaker 9: surged in the UK, if you sort of go through 483 00:23:36,160 --> 00:23:41,320 Speaker 9: the sort of mechanism headline inflation surged, people saw that 484 00:23:41,480 --> 00:23:43,680 Speaker 9: they pushed up, they bid up their wages because the 485 00:23:43,760 --> 00:23:46,960 Speaker 9: laid market was tight, and that is eventually fed through 486 00:23:46,960 --> 00:23:50,199 Speaker 9: to services inflation, and high energy prices are pushed up 487 00:23:50,200 --> 00:23:53,640 Speaker 9: services inflation as well. Now energy price inflation is where 488 00:23:53,840 --> 00:23:56,359 Speaker 9: in fact we're in disinflation. The headline rate is falling. 489 00:23:56,800 --> 00:23:59,120 Speaker 9: You have to put some weight on the idea that 490 00:23:59,119 --> 00:24:02,399 Speaker 9: that mechanism goes into reverse and quite quickly. And I 491 00:24:02,400 --> 00:24:05,160 Speaker 9: think Bailey and Ramsen, at least certainly in their comments 492 00:24:05,160 --> 00:24:06,800 Speaker 9: are sort of alluding to this, that you have to 493 00:24:06,800 --> 00:24:08,439 Speaker 9: look forward a little bit more and not just be 494 00:24:08,520 --> 00:24:11,720 Speaker 9: completely data dependent. And I think that actually goes to 495 00:24:11,720 --> 00:24:14,800 Speaker 9: the CRUXFID a little bit, where the bank's reaction function 496 00:24:14,960 --> 00:24:17,639 Speaker 9: has shifted a bit, not just being completely on every 497 00:24:17,680 --> 00:24:21,440 Speaker 9: CPI print and hanging on that, but looking forward to say, look, 498 00:24:21,520 --> 00:24:24,200 Speaker 9: this thing can unwind quite quickly, So we probably need 499 00:24:24,240 --> 00:24:26,200 Speaker 9: to take a little bit of insurance out to ensure 500 00:24:26,240 --> 00:24:28,560 Speaker 9: that we're not caught on the downside on the way down, 501 00:24:28,800 --> 00:24:30,720 Speaker 9: because we don't want to make the mistake of being 502 00:24:30,720 --> 00:24:33,560 Speaker 9: too slow coming out of this, having arguably been too 503 00:24:33,560 --> 00:24:36,399 Speaker 9: slow getting to it in the first place. So that 504 00:24:36,760 --> 00:24:38,320 Speaker 9: for me is the risk at the moment, and that's 505 00:24:38,320 --> 00:24:40,679 Speaker 9: why it's probably sort of when we see what they 506 00:24:40,680 --> 00:24:43,160 Speaker 9: say on their main meeting. They'll probably say the risk 507 00:24:43,160 --> 00:24:45,359 Speaker 9: of broady balance to the outlook, which is sort of 508 00:24:45,359 --> 00:24:49,359 Speaker 9: a big shift again because they've been constantly emphasizing the upside. 509 00:24:49,280 --> 00:24:53,159 Speaker 3: And just coming back to that vote split's idea. Whilst 510 00:24:53,400 --> 00:24:56,000 Speaker 3: what will get you excited in terms of the vote risk. 511 00:24:57,960 --> 00:24:58,600 Speaker 9: Any votes for it? 512 00:25:00,240 --> 00:25:00,320 Speaker 4: No. 513 00:25:00,440 --> 00:25:04,320 Speaker 9: I mean we've put our preview out and in that 514 00:25:04,359 --> 00:25:07,760 Speaker 9: we say that we think Ramsdom will join THINGRA inviting 515 00:25:07,800 --> 00:25:11,359 Speaker 9: for a cut. I think that or any more going 516 00:25:11,359 --> 00:25:13,840 Speaker 9: for a cut would get people excited. I think if 517 00:25:13,880 --> 00:25:16,800 Speaker 9: you had an eight to one again, which is what 518 00:25:16,800 --> 00:25:19,399 Speaker 9: we had in March, and similar guidance, it wouldn't feel 519 00:25:19,400 --> 00:25:22,640 Speaker 9: like we'd moved closer. It might feel at that point 520 00:25:22,680 --> 00:25:24,480 Speaker 9: it had been pushed away a bit. So I think 521 00:25:24,520 --> 00:25:26,800 Speaker 9: there needs if it's going to happen in the summer, 522 00:25:26,840 --> 00:25:28,560 Speaker 9: it needs to feel like it's coming closer. In a 523 00:25:29,160 --> 00:25:31,480 Speaker 9: more dubbish vote split or even a tweets the guidance 524 00:25:31,480 --> 00:25:32,800 Speaker 9: would be the things to look for on that. 525 00:25:33,240 --> 00:25:37,359 Speaker 3: Thanks to Bloomberg's Chief UK economist, Dan Hansen, I'm Stephen 526 00:25:37,400 --> 00:25:40,040 Speaker 3: Carolyn London. You can catch us every weekday morning here 527 00:25:40,080 --> 00:25:41,160 Speaker 3: for Bloomberg Daybreak. 528 00:25:41,160 --> 00:25:41,560 Speaker 10: Europe. 529 00:25:41,640 --> 00:25:44,720 Speaker 3: Beginning at six am in London and one am on 530 00:25:44,760 --> 00:25:45,400 Speaker 3: Wall Streets. 531 00:25:45,440 --> 00:25:48,440 Speaker 2: Tom beg you Steven and coming up on Bloomberg day 532 00:25:48,440 --> 00:25:51,119 Speaker 2: Break weekend, Chinese President shi Jin Pining said for a 533 00:25:51,160 --> 00:25:54,760 Speaker 2: trip to Europe, what could this mean for relations between 534 00:25:54,800 --> 00:25:58,320 Speaker 2: Europe and China? I'm Tom Busby and this is Bloomberg. 535 00:26:08,520 --> 00:26:10,960 Speaker 2: I'm Tom Busby, New York. But your global look ahead 536 00:26:11,000 --> 00:26:13,120 Speaker 2: at the top stories for investors in the coming week. 537 00:26:13,480 --> 00:26:16,800 Speaker 2: Relations between China and Europe have been Chile as of late, 538 00:26:16,840 --> 00:26:20,159 Speaker 2: but with Chinese President shi Jinping set to visit Europe 539 00:26:20,160 --> 00:26:22,760 Speaker 2: in the coming days, can we expect to see a 540 00:26:22,800 --> 00:26:26,520 Speaker 2: thaw in that relationship. Let's get to Daybreak Asia hosts 541 00:26:26,520 --> 00:26:28,920 Speaker 2: Brian Curtis and Doug Prisner. 542 00:26:28,880 --> 00:26:32,520 Speaker 4: To Chinese President Shijinping heads to Europe in the coming week, 543 00:26:32,960 --> 00:26:36,080 Speaker 4: is expected to deliver the message that China has more 544 00:26:36,080 --> 00:26:38,720 Speaker 4: to offer Europe than the US cares to admit. 545 00:26:38,920 --> 00:26:42,240 Speaker 1: She will be traveling to France, Serbia, and Hungary on 546 00:26:42,280 --> 00:26:45,280 Speaker 1: a five day trip. Those nations are seeking investment from 547 00:26:45,400 --> 00:26:49,600 Speaker 1: China even as tensions mount. Relations have cooled over a 548 00:26:49,720 --> 00:26:55,200 Speaker 1: range of issues, including trade, allegations around spying and Beijing's 549 00:26:55,200 --> 00:26:56,439 Speaker 1: support for Russia. 550 00:26:56,560 --> 00:26:59,640 Speaker 4: Even with Ty's slipping of late, it appears that both 551 00:26:59,720 --> 00:27:03,400 Speaker 4: sides will probably try to woo the other. Sources tell 552 00:27:03,480 --> 00:27:06,480 Speaker 4: us that French President front Sois Macron will take she 553 00:27:06,720 --> 00:27:08,840 Speaker 4: to a corner of the Pyrenees where he used to 554 00:27:08,880 --> 00:27:10,119 Speaker 4: visit his grandmother as a. 555 00:27:10,200 --> 00:27:13,879 Speaker 1: Child, and she will likely again make this point affordable 556 00:27:13,920 --> 00:27:17,720 Speaker 1: clean energy from China will help Europe fight both inflation 557 00:27:17,880 --> 00:27:22,000 Speaker 1: and climate change. Here's Dan ten Kate, Bloomberg Asia eco 558 00:27:22,080 --> 00:27:23,560 Speaker 1: Gov executive. 559 00:27:23,080 --> 00:27:26,399 Speaker 11: Editor from China's perspective. They're like, look, the world needs 560 00:27:26,400 --> 00:27:28,920 Speaker 11: a bunch of evs, so there's no problem with us 561 00:27:29,000 --> 00:27:32,000 Speaker 11: investing in these, and we can provide cheap cars for 562 00:27:32,040 --> 00:27:34,520 Speaker 11: your people. So you know, the visit to Hungary is 563 00:27:34,560 --> 00:27:37,320 Speaker 11: important in that because you have Chinese companies looking to 564 00:27:37,359 --> 00:27:41,120 Speaker 11: set up factories there, and you know governments that are 565 00:27:41,160 --> 00:27:44,560 Speaker 11: happy to kind of have this investment from China to 566 00:27:45,480 --> 00:27:49,080 Speaker 11: gain jobs locally and to have cheaper electric vehicles in 567 00:27:49,119 --> 00:27:49,679 Speaker 11: their market. 568 00:27:49,960 --> 00:27:53,240 Speaker 4: Bloomberg's Dan ten Kate joining us now in our studio 569 00:27:53,320 --> 00:27:56,680 Speaker 4: is far further discussion on this is Jenny Marsh, a 570 00:27:56,760 --> 00:27:59,560 Speaker 4: team leader for Greater China eco Gov, and Rebecca Choan 571 00:27:59,600 --> 00:28:03,960 Speaker 4: Wilkins Bloomberg Asia Government and Politics correspondents. So, as we 572 00:28:04,040 --> 00:28:06,760 Speaker 4: heard there from Dan, it's going to be a little given. 573 00:28:06,920 --> 00:28:09,680 Speaker 4: Take Jenny, let me go to you first. As Doug said, 574 00:28:09,760 --> 00:28:13,560 Speaker 4: relations have gotten a little testier of late here than before. 575 00:28:13,680 --> 00:28:16,840 Speaker 4: We have these EU probes on Chinese made evs and 576 00:28:16,960 --> 00:28:20,879 Speaker 4: also medical devices procurement. So it might be tempting to 577 00:28:20,880 --> 00:28:23,520 Speaker 4: say that this will be a tougher trip for she 578 00:28:24,160 --> 00:28:27,840 Speaker 4: than usual, But after all, this is the president and 579 00:28:28,000 --> 00:28:30,199 Speaker 4: he's not going to face a lot of press, and 580 00:28:30,240 --> 00:28:32,240 Speaker 4: the meetings will be at a very high level. 581 00:28:32,480 --> 00:28:35,040 Speaker 10: What are we expecting exactly? And you can add to 582 00:28:35,040 --> 00:28:37,480 Speaker 10: that list that he's picked three countries in Europe which 583 00:28:37,520 --> 00:28:40,000 Speaker 10: are already considered to be some of the more friendly ones. 584 00:28:40,440 --> 00:28:42,720 Speaker 10: So you know, going to Serbia and Hungary, these are 585 00:28:42,720 --> 00:28:45,680 Speaker 10: not two countries that should be critics of China's policy. 586 00:28:46,040 --> 00:28:48,520 Speaker 10: Quite the opposite. They're sort of big fans of Beijing's 587 00:28:48,520 --> 00:28:51,640 Speaker 10: investment into their countries, and he can use those countries 588 00:28:51,640 --> 00:28:54,320 Speaker 10: as sort of showcase this is what engagement with China 589 00:28:54,360 --> 00:28:56,960 Speaker 10: can offer to you. France is going to be sort 590 00:28:57,000 --> 00:28:59,720 Speaker 10: of the most important stop, and in France is also 591 00:28:59,800 --> 00:29:02,800 Speaker 10: going to have this trilat with as lovel One Delaion 592 00:29:02,880 --> 00:29:05,480 Speaker 10: from the European Commission, and so I think, you know, 593 00:29:05,840 --> 00:29:08,200 Speaker 10: that meeting, I think is Macron's way of saying that, yes, 594 00:29:08,400 --> 00:29:10,800 Speaker 10: Si Jianping is coming, and we're throwing this big banquet 595 00:29:10,800 --> 00:29:13,280 Speaker 10: for him and taking him sort of this very personal 596 00:29:13,360 --> 00:29:16,560 Speaker 10: childhood retreat. But at the same time they're not going 597 00:29:16,600 --> 00:29:18,440 Speaker 10: to shy away from some of the tougher questions. And 598 00:29:18,840 --> 00:29:20,680 Speaker 10: you know, she sort of is the architect of this 599 00:29:20,760 --> 00:29:24,960 Speaker 10: de risking narrative language which the US then adopted. So 600 00:29:25,880 --> 00:29:28,080 Speaker 10: I think in that trilat in France on the first 601 00:29:28,160 --> 00:29:31,440 Speaker 10: day with Macron and Vondalayan, you're going to expect the 602 00:29:31,480 --> 00:29:35,200 Speaker 10: toughest probably conversations he'll have during that trip on China's 603 00:29:35,240 --> 00:29:39,920 Speaker 10: industrial policy, on She Jianping's continued support for President Vladimir 604 00:29:39,960 --> 00:29:43,000 Speaker 10: Putin despite you know, the war in Ukraine grinding on, 605 00:29:43,160 --> 00:29:46,920 Speaker 10: and sort of you know, this propping up Russia's war machine, 606 00:29:46,960 --> 00:29:50,200 Speaker 10: something which has been really pivotal in changing the shape 607 00:29:50,200 --> 00:29:53,440 Speaker 10: of the China europe relationship in a way, I think 608 00:29:53,440 --> 00:29:56,120 Speaker 10: that people in officials and Beijing didn't really grasp at 609 00:29:56,120 --> 00:29:58,560 Speaker 10: the beginning how consequential that was going to be. So 610 00:29:59,160 --> 00:30:01,360 Speaker 10: you know, I think, yes, he's going at a time 611 00:30:01,400 --> 00:30:05,400 Speaker 10: when probably relations between Europe and China have never been 612 00:30:05,560 --> 00:30:08,640 Speaker 10: or in decades haven't been quite so testy, and distrust 613 00:30:08,720 --> 00:30:11,520 Speaker 10: is growing. But he's carefully curated this itinerary, I think, 614 00:30:11,920 --> 00:30:14,360 Speaker 10: obviously to serve his interest best and sort of promote 615 00:30:14,360 --> 00:30:16,280 Speaker 10: the narrative that he wants to tell on this trip. 616 00:30:16,320 --> 00:30:19,200 Speaker 1: What about what she may be attempting to do in 617 00:30:19,320 --> 00:30:23,360 Speaker 1: terms of US EU relations and whether or not there's 618 00:30:23,400 --> 00:30:26,080 Speaker 1: an opportunity for him to maybe insert a bit of 619 00:30:26,080 --> 00:30:30,400 Speaker 1: a wed chere, Rebecca and try to exploit some division. 620 00:30:30,440 --> 00:30:32,920 Speaker 1: I mean, we know there's a tremendous amount of unity, 621 00:30:33,160 --> 00:30:36,480 Speaker 1: but there are disagreements, and would she use this trip 622 00:30:36,520 --> 00:30:38,080 Speaker 1: to try to capitalize on some of that? 623 00:30:38,320 --> 00:30:40,479 Speaker 12: Yeah, I think that's right. And just to take a 624 00:30:40,520 --> 00:30:43,640 Speaker 12: step back briefly, the broader context here is that Europe 625 00:30:43,640 --> 00:30:46,400 Speaker 12: and the European Union in particular, has for a long 626 00:30:46,480 --> 00:30:50,120 Speaker 12: time viewed itself as this sort of middle path. It 627 00:30:50,160 --> 00:30:54,480 Speaker 12: has wanted to resist automatically siding with the US, not 628 00:30:54,760 --> 00:30:57,840 Speaker 12: just because of its policy on China, but also because 629 00:30:58,120 --> 00:31:01,520 Speaker 12: how the European Union historically has viewed the US itself. 630 00:31:01,840 --> 00:31:05,320 Speaker 12: It has not wanted to just automatically throw its weight in, 631 00:31:06,200 --> 00:31:10,480 Speaker 12: but the Biden administration has worked hard to get its 632 00:31:10,480 --> 00:31:13,640 Speaker 12: allies and partners on side to try and build consensus 633 00:31:13,720 --> 00:31:17,320 Speaker 12: when it comes to taking a firmer stance on China, 634 00:31:17,360 --> 00:31:21,040 Speaker 12: including for example, picking up that de risking language, moving 635 00:31:21,120 --> 00:31:23,400 Speaker 12: a little bit of showing at least a little bit 636 00:31:23,440 --> 00:31:26,480 Speaker 12: of give and take with the European Union stance there. 637 00:31:27,320 --> 00:31:31,000 Speaker 12: But we have seen this steady drumbeat of probes and 638 00:31:31,080 --> 00:31:36,120 Speaker 12: investigations into Chinese industries via the EU, and that has 639 00:31:36,200 --> 00:31:39,960 Speaker 12: essentially taken EU policy much closer to the US. 640 00:31:40,600 --> 00:31:43,800 Speaker 4: Well. The inroad on cars too by China seems to 641 00:31:43,880 --> 00:31:46,479 Speaker 4: have made a big difference. You know, you've got this 642 00:31:46,640 --> 00:31:50,880 Speaker 4: probe that's underway and byd has a plant coming in Hungary. 643 00:31:51,240 --> 00:31:53,800 Speaker 4: We understand that it will take about three years to 644 00:31:53,800 --> 00:31:57,960 Speaker 4: be completed, and a lot can happen between now and then. 645 00:31:58,000 --> 00:32:00,800 Speaker 4: I mean, you'll get the result of the probe in 646 00:32:01,480 --> 00:32:04,360 Speaker 4: the EU, and you know that could be quite damaging. 647 00:32:04,880 --> 00:32:07,840 Speaker 4: And this kind of three years out for a plan, 648 00:32:07,920 --> 00:32:10,840 Speaker 4: it shows how difficult planning can be. Lot can change 649 00:32:10,880 --> 00:32:11,680 Speaker 4: in three years. 650 00:32:11,480 --> 00:32:14,120 Speaker 12: Rebecca, a lot can change. But we do, for example, 651 00:32:14,160 --> 00:32:18,560 Speaker 12: also have another Chinese automaker Cherry taking over an old 652 00:32:18,680 --> 00:32:22,360 Speaker 12: Nisan factory in Spain. We think potentially there could be 653 00:32:22,360 --> 00:32:26,560 Speaker 12: announcements of more such car factory plans in Europe during 654 00:32:26,600 --> 00:32:30,720 Speaker 12: this trip. So wild China is still waiting to see 655 00:32:30,760 --> 00:32:33,200 Speaker 12: the results of that probe, a probe which was actually 656 00:32:33,240 --> 00:32:37,680 Speaker 12: backed by France. It's worth mentioning, you know, China is 657 00:32:37,720 --> 00:32:40,680 Speaker 12: still working very hard to try and at least prove 658 00:32:41,240 --> 00:32:44,640 Speaker 12: that there are benefits, as Jenny points out, if you 659 00:32:44,720 --> 00:32:47,200 Speaker 12: do engage and the fact of sort of going and 660 00:32:47,240 --> 00:32:52,520 Speaker 12: opening factories in European countries, creating jobs, driving some economic growth, 661 00:32:52,720 --> 00:32:55,200 Speaker 12: may try and sort of it may ease some of 662 00:32:55,240 --> 00:32:59,640 Speaker 12: those tensions and some of those anxieties, but it certainly 663 00:32:59,720 --> 00:33:04,080 Speaker 12: is hanging over I think many Beijing companies' heads at 664 00:33:04,160 --> 00:33:07,280 Speaker 12: this moment. It's worth saying too, though, that Beijing has 665 00:33:07,400 --> 00:33:12,280 Speaker 12: very actively engaged in the debate over capacity with the Europeans. So, 666 00:33:12,320 --> 00:33:16,600 Speaker 12: for example, these long comments from Litiang and President cy 667 00:33:16,640 --> 00:33:20,440 Speaker 12: Jimping when German Chancellor Schultz was in the country quite 668 00:33:20,440 --> 00:33:24,200 Speaker 12: different from the more sort of standard and sort of 669 00:33:24,240 --> 00:33:28,120 Speaker 12: briefer comments that we had when US officials have visited 670 00:33:28,120 --> 00:33:29,680 Speaker 12: Beijing and discussed the same topic. 671 00:33:29,840 --> 00:33:33,480 Speaker 1: Well, it's interesting you make that point because recently German 672 00:33:33,560 --> 00:33:37,959 Speaker 1: Chancellor Olof Schoalz was in China and addressing the issue 673 00:33:38,040 --> 00:33:42,240 Speaker 1: of things like unfair competition, dumping, over capacity. Jenny, are 674 00:33:42,280 --> 00:33:46,440 Speaker 1: these perspectives that are uniquely German because of the German 675 00:33:46,520 --> 00:33:49,680 Speaker 1: manufacturing economy, or do they expand more broadly across the 676 00:33:49,720 --> 00:33:50,560 Speaker 1: European Union. 677 00:33:50,960 --> 00:33:53,960 Speaker 10: They expand more broadly across parts of the European Union 678 00:33:54,000 --> 00:33:56,600 Speaker 10: and beyond as well. You know, Schultz's visit to Beijing 679 00:33:56,680 --> 00:34:00,000 Speaker 10: came just a few weeks after Yellen had been in Beijing, 680 00:34:00,080 --> 00:34:04,040 Speaker 10: also carrying the same message, and the US Treasury Secretary 681 00:34:04,120 --> 00:34:07,680 Speaker 10: warned Chinese leaders at the time that the concerns that 682 00:34:07,720 --> 00:34:11,160 Speaker 10: the US has on Chinese overcapacity are shared by lots 683 00:34:11,200 --> 00:34:13,560 Speaker 10: of countries around the world. And so Schultz coming and 684 00:34:13,600 --> 00:34:16,880 Speaker 10: sort of he really echoed her message, you know, almost 685 00:34:16,920 --> 00:34:19,239 Speaker 10: to the word. Just a few weeks later, really sort 686 00:34:19,239 --> 00:34:21,600 Speaker 10: of hammered that home. And that's sort of part of 687 00:34:21,600 --> 00:34:24,280 Speaker 10: a broader sign too, you know that the European Union 688 00:34:24,400 --> 00:34:27,560 Speaker 10: and the US they're China policies kind of now sort 689 00:34:27,600 --> 00:34:31,560 Speaker 10: of coalescing into one joined up policy. Obviously, the big 690 00:34:31,560 --> 00:34:34,080 Speaker 10: thing on the horizon is the US election, you know, 691 00:34:34,120 --> 00:34:36,640 Speaker 10: and if we do see President Donald Trump coming back 692 00:34:36,680 --> 00:34:38,960 Speaker 10: into the White House later this year, he could take 693 00:34:39,040 --> 00:34:41,640 Speaker 10: China policy in a whole different direction. He become much 694 00:34:41,680 --> 00:34:45,759 Speaker 10: more hawkish, you know, much more sort of unpredictable. And 695 00:34:45,800 --> 00:34:47,239 Speaker 10: then I think the Europeans are going to have to 696 00:34:47,239 --> 00:34:49,759 Speaker 10: sort of think if they still want to walk in 697 00:34:49,880 --> 00:34:53,280 Speaker 10: lockstep with the US on their China policy. But for now, 698 00:34:53,680 --> 00:34:55,600 Speaker 10: you know, the two sides are very much in sync 699 00:34:55,680 --> 00:34:58,319 Speaker 10: into how they're presenting their concerns to the Chinese. And 700 00:34:58,360 --> 00:35:00,359 Speaker 10: that must be worrying, I think for China. You know, 701 00:35:00,800 --> 00:35:04,400 Speaker 10: two of these huge economic blocks both presenting the same concerns. 702 00:35:05,360 --> 00:35:07,560 Speaker 4: Yeah, let's go back to Dan ten Kate. We talked 703 00:35:07,640 --> 00:35:10,480 Speaker 4: with him briefly about how she might be appealing to 704 00:35:10,520 --> 00:35:14,920 Speaker 4: the EU to pursue a more pragmatic policy toward Beijing. 705 00:35:15,360 --> 00:35:18,000 Speaker 11: She views Macron as someone he can do business with, 706 00:35:18,880 --> 00:35:24,279 Speaker 11: someone that is not inherently reflexively anti China, that can 707 00:35:24,320 --> 00:35:26,920 Speaker 11: stand up to the US and kind of forge a 708 00:35:26,960 --> 00:35:30,839 Speaker 11: middle path. And it's kind of key to China's long 709 00:35:30,880 --> 00:35:33,840 Speaker 11: standing strategic aim, you know, to kind of drive a 710 00:35:33,880 --> 00:35:37,359 Speaker 11: wedge essentially, and not be in lockstep with the US, 711 00:35:37,400 --> 00:35:40,840 Speaker 11: particularly when it comes to export controls on key chips 712 00:35:40,880 --> 00:35:43,560 Speaker 11: and other advanced technology that China would need to grow 713 00:35:43,600 --> 00:35:44,240 Speaker 11: its economy. 714 00:35:44,320 --> 00:35:46,879 Speaker 4: So, Jenny, what are some of the bargaining points that she. 715 00:35:47,040 --> 00:35:49,080 Speaker 10: Will bring to the four It's going to be all 716 00:35:49,120 --> 00:35:52,200 Speaker 10: about what China can offer France, you know particularly. I 717 00:35:52,239 --> 00:35:54,400 Speaker 10: think this is where the Chinese like to sort of 718 00:35:54,880 --> 00:35:57,359 Speaker 10: the like sort of work to the advantage they have, 719 00:35:57,440 --> 00:36:00,000 Speaker 10: which is, you know, they can offer different countries different 720 00:36:00,160 --> 00:36:03,239 Speaker 10: carrots within the European Unions. I think for France, you know, 721 00:36:03,280 --> 00:36:06,040 Speaker 10: it's going to be sort of what their companies can 722 00:36:06,040 --> 00:36:09,880 Speaker 10: bring in terms of job creation and investment. We know 723 00:36:09,960 --> 00:36:13,760 Speaker 10: from sources that mccran is specifically going to be asking 724 00:36:13,800 --> 00:36:18,000 Speaker 10: she for investment in the EV battery sector. So you know, 725 00:36:18,120 --> 00:36:20,160 Speaker 10: if she can say he's going to steer some of 726 00:36:20,200 --> 00:36:24,680 Speaker 10: their sort of world leading companies in that sector towards 727 00:36:24,800 --> 00:36:28,040 Speaker 10: investing in France, you know, that's very appealing from macran. 728 00:36:28,040 --> 00:36:30,640 Speaker 10: And I think if what they can then do is 729 00:36:30,680 --> 00:36:32,759 Speaker 10: sort of work out these deals where it's much more 730 00:36:32,760 --> 00:36:35,400 Speaker 10: of it of a JV and so rather than you know, 731 00:36:35,520 --> 00:36:38,600 Speaker 10: importing Chinese cars into France. If some of these Chinese 732 00:36:38,640 --> 00:36:42,000 Speaker 10: cars or goods can be made in France by French workers, 733 00:36:42,400 --> 00:36:45,080 Speaker 10: then that helps to ease these tensions. But of course, 734 00:36:45,120 --> 00:36:47,120 Speaker 10: you know there's kind of an irony here too, and 735 00:36:47,200 --> 00:36:49,719 Speaker 10: that there's been some research showing as well that you know, 736 00:36:49,840 --> 00:36:53,440 Speaker 10: these European companies now which are actually behind the Chinese 737 00:36:53,440 --> 00:36:55,799 Speaker 10: in terms of this type of new tech, they're now 738 00:36:55,880 --> 00:36:59,279 Speaker 10: looking for tech transfer. So when these Chinese companies do 739 00:36:59,480 --> 00:37:03,400 Speaker 10: set up in European nations, there's also this idea, a 740 00:37:03,480 --> 00:37:06,200 Speaker 10: risk on the Chinese side of sort of technology leak, 741 00:37:06,320 --> 00:37:08,759 Speaker 10: where the Europeans are now wanting to learn from the 742 00:37:08,880 --> 00:37:11,600 Speaker 10: Chinese companies which are ahead. And that's just something which 743 00:37:11,640 --> 00:37:14,040 Speaker 10: is quite fascinating to think about for a second, because 744 00:37:14,320 --> 00:37:16,879 Speaker 10: you know, just a few decades ago, the complete opposite 745 00:37:16,920 --> 00:37:20,359 Speaker 10: was true, where it was you know, European companies in 746 00:37:20,440 --> 00:37:23,160 Speaker 10: China and the Chinese trying to sort of learn from 747 00:37:23,160 --> 00:37:26,520 Speaker 10: that tech and you know, seally even perhaps to get ahead. 748 00:37:26,640 --> 00:37:29,040 Speaker 10: Now everything sort of swung on. The imbalance is so 749 00:37:29,160 --> 00:37:31,880 Speaker 10: great in some ways that you have these European firms 750 00:37:32,280 --> 00:37:34,879 Speaker 10: that potentially want to learn from the Chinese, and that's 751 00:37:34,880 --> 00:37:36,680 Speaker 10: something I think that you know, she has to sort 752 00:37:36,680 --> 00:37:37,800 Speaker 10: of work out how to balance. 753 00:37:38,080 --> 00:37:40,160 Speaker 1: Thanks to the two of you for helping us set 754 00:37:40,239 --> 00:37:42,640 Speaker 1: up the meeting this week between the heads of state 755 00:37:42,800 --> 00:37:47,960 Speaker 1: in Hungary, Serbia, and France with Chinese President Chi Jinping, 756 00:37:48,160 --> 00:37:52,040 Speaker 1: Jenny Marsh Bloomberg Team Leader for Greater China Eco Gov 757 00:37:52,360 --> 00:37:57,359 Speaker 1: and Rebecca Chung Wilkins Bloomberg Asia Government and Politics Correspondent. 758 00:37:57,560 --> 00:38:00,000 Speaker 4: I'm Brian Curtis, along with Doug Krisner. You can catch 759 00:38:00,239 --> 00:38:03,720 Speaker 4: us every weekday here for Bloomberg day Break Asia, beginning 760 00:38:03,760 --> 00:38:06,520 Speaker 4: at eight am in Hong Kong and eight pm on 761 00:38:06,600 --> 00:38:07,840 Speaker 4: Wall Street. Tom. 762 00:38:08,280 --> 00:38:10,680 Speaker 2: Thank you, Brian, Thank you Doug. And that does it 763 00:38:10,760 --> 00:38:13,360 Speaker 2: for this edition of Bloomberg day Break Weekend. Join us 764 00:38:13,400 --> 00:38:15,640 Speaker 2: again Monday morning at five am Wall Street time for 765 00:38:15,680 --> 00:38:18,319 Speaker 2: the latest done markets overseas and the news you need 766 00:38:18,360 --> 00:38:21,279 Speaker 2: to start your day. I'm Tom Buzzby. Stay with us. 767 00:38:21,520 --> 00:38:24,759 Speaker 2: Top stories and global business headlines are coming up right now.