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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak Europe podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Friday, the

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Speaker 2: fifth of April in London. I'm Stephen Carroll coming up today.

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Speaker 2: From firebrand China skeptic to presidential pragmatist. Argentina's Javier Malay

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Speaker 2: softens his tone on Beijing in an exclusive Bloomberg interview,

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Speaker 2: the FEDS Neil Kashkari floats the idea of zero rate

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Speaker 2: cuts this year as markets look ahead to US jobs.

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Speaker 2: Data plus pumped up the price of oil tops ninety

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Speaker 2: dollars a barrel as escalating Middle East tensions spook the markets.

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Speaker 2: Let's start with a roundup of our top stories. Argentina's

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Speaker 2: President Heavier Malay has told Bloomberg he won't change existing

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Speaker 2: trade and financial ties his country has with China. It's

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Speaker 2: a marked change in tone for the libertarian leader who's

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Speaker 2: previously likened Beijing to an assassin. Editor in chief Mickelthwaite

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Speaker 2: asked him if he still stood by those comments.

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Speaker 3: As for the Chinese government, what we've always said is

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Speaker 3: that we are libertarians and if people want to do

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Speaker 3: business with China. They can carry on business as usual.

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Speaker 3: What I said was that I wouldn't be aligning with communists.

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Speaker 2: President Malayada that he had no intention of touching the

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Speaker 2: eighteen billion dollar currency swap between the two countries. China's

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Speaker 2: the biggest source of foreign reserves for the beleaguered central

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Speaker 2: Bank in Buenos Aires. Chinese trade and investments now drive

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Speaker 2: large suades of Argentina's economy and sectors, from commodities and

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Speaker 2: energy to banking. Minneapolis Fed President Neil Kashkari says interest

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Speaker 2: rate cuts may not be needed this year, especially if

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Speaker 2: the economy remains robust, but he didn't completely rule out

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Speaker 2: right reductions.

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Speaker 4: Wouldn't say they're off the table, but they're also not

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Speaker 4: a likely scenario given what we know right now. If

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Speaker 4: we continue to see strong job growth, if we continue

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Speaker 4: to see strong consumer spending and strong GDP growth, then

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Speaker 4: that raises a question in my mind, well, why wouldn't

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Speaker 4: we cut rates?

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Speaker 2: Yeah, gosh, Canrie doesn't vote on policy this year. His

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Speaker 2: comments come despite a majority of Federal Reserve officials penciling

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Speaker 2: in three rate cuts in twenty twenty four. Cleveland FED

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Speaker 2: President Loretta Master thinks the Central Bank is nearing the

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Speaker 2: confidence level needed to start lowering rates in the coming months. Meanwhile,

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Speaker 2: the Chicago Fed President Austin Goolsby is playing hot play

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Speaker 2: is downplaying higher than expected inflation readings. He maintains that

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Speaker 2: January and February's numbers don't change the broader picture of

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Speaker 2: cooling price growth.

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Speaker 5: I still feel like if you look at the broader economy,

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Speaker 5: it doesn't really look like broad based overheating. Those labor

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Speaker 5: market metrics are coming back into better balance. So I

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Speaker 5: still think if you take a longer arc, inflation's coming

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Speaker 5: down and we're going to get to two percent.

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Speaker 2: Austin Goolsby from the Chicago Fed, speaking ahead of the

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Speaker 2: monthly jobs report due out from the US later. Bloomberg

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Speaker 2: economists are predicting a drop in March hiring amid muted

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Speaker 2: weight growth. The European Central Bank will embark in June

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Speaker 2: on a steady yet gradual path of interest rate cuts

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Speaker 2: that will run at least through the end of next year.

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Speaker 2: That's according to economists surveyed by Bloomberg. Respondents anticipate a

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Speaker 2: quarter point reduction in the first rate cut, which is

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Speaker 2: currently at a record four percent. That's at next week's

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Speaker 2: ECB policy meeting, or rather after next week's ECB policy meeting.

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Speaker 2: Economists believe similar moves will follow once a quarter, taking

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Speaker 2: the rate to two under quarter percent by late twenty

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Speaker 2: twenty five. Israel has announced its opening new routes for

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Speaker 2: humanitarian deliveries into Gaza. It's after the US President Joe

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Speaker 2: Biden told Israel's Prime Minister BENJAMINETTANYAHUO to allow more supplies

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Speaker 2: in and attacks on civilians and aid workers are unacceptable.

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Speaker 2: US Secretary of State Anthony Blincoln says America's future support

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Speaker 2: for Israel depends on their actions.

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Speaker 4: If we don't see the changes that we need to see,

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Speaker 4: they'll be changes in our own pulse.

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Speaker 2: It's not just Blincoln and the White House having concerns.

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Speaker 2: Bloomberg's learned that the British Prime Minister Rishi Sunak and

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Speaker 2: his Foreign Secretary David Cameron are weighing cutting off arm

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Speaker 2: sales to Israel after three British aid workers were killed

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Speaker 2: in Gaza. The pair are waiting on legal advice to

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Speaker 2: help win over pro Israeli cabinet members who oppose the change.

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Speaker 2: The price of oil has continued its rise past ninety

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Speaker 2: dollars a barrel as escalating tensions in the Middle.

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Speaker 1: East drives prices higher.

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Speaker 2: CRUD is up by eighteen percent this year amid geopolitical

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Speaker 2: risks as well as OPEC plus's supply restrictions and healthy demand.

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Speaker 2: The latest jump hire comes as Israel has increased preparations

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Speaker 2: for potential retaliation by Tehran after Monday's strike on an

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Speaker 2: inradiant diplomatic compound in Syria. And the British billionaire Joe

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Speaker 2: Lewis has been found five million dollars in sentenced to

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Speaker 2: three years probation, but avoided prison time for insider trading

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Speaker 2: in the US. The former Tottenham owner shared illegal stock

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Speaker 2: tips about his companies with friends, personal assistants and romantic partners.

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Speaker 2: Prosecutors had been pressing for a jail term, but the

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Speaker 2: eighty seven year old's lawyers urged the judge to be lenient.

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Speaker 1: Due to his age and philanthropic work.

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Speaker 2: In a moment, we'll bring you more of our exclusive

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Speaker 2: interview with the President of Argentina plus look ahead to

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Speaker 2: today's US jobs report. But as it's Friday, I've been

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Speaker 2: reading the Top Shelf Drinks newsletter from our colleagues at

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Speaker 2: Bloomberg Pursuits and a story of that caught my eye

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Speaker 2: is about the Bordeaux wine producer Muton Rothschild and how

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Speaker 2: their latest Muton Caday line of wines are being aimed

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Speaker 2: at younger drinkers, many of whom are turning away from alcohol.

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Speaker 2: In fact, the CEO describes them as the wines of tomorrow's.

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Speaker 2: They've been developed thanks to some of the gen Z

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Speaker 2: Rothschild wine makers who had input into their development. Their

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Speaker 2: names are also on the labels of the Red, White

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Speaker 2: and Rose wines. Principle characteristics, they're organic, they're vegan. The

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Speaker 2: overall style lighter, fresher and juicier than those who may

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Speaker 2: be used to the regular Bordeaux wines from Muton Cade are.

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Speaker 1: Colleague Ellen McCoy has tried the wines.

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Speaker 2: You can read her verdict in the Top Shelf newsletter,

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Speaker 2: which you can find by going to Bloomberg dot com

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Speaker 2: slash Newsletters. Well, that's bringing more now of that exclusive

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Speaker 2: interview with Javier Malay, the President of Argentina. He's been

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Speaker 2: speaking to our editor in chief John mckethwaite about a

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Speaker 2: wide range of issues, and in particular his country's relationship

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Speaker 2: with China. Malay has promised to curb ties with Beijing

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Speaker 2: if elected, but Argentina has deep financial links to China,

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Speaker 2: which include being the biggest source of foreign reserves for

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Speaker 2: the Central Bank.

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Speaker 1: John mcop with it.

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Speaker 2: John mccothwaite asked the Argentinian president if he stood by

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Speaker 2: his comments last year in which he called the Chinese

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Speaker 2: government fascist.

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Speaker 3: What we've always said is that we are libertarians, and

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Speaker 3: if people want to do business with China, they can

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Speaker 3: carry on business as usual. What I said was that

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Speaker 3: I wouldn't be aligned with communists, and that's precisely one

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Speaker 3: of the things. Who did I say I was going

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Speaker 3: to align with the United States and Israel? Do you

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Speaker 3: have any doubt that that's my alignment the United States

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Speaker 3: on Israel?

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Speaker 6: No, But in fact you have a very good example,

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Speaker 6: very good example at the moment. And I'll come back

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Speaker 6: to Israel in the United States later. But now, as

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Speaker 6: you know, in Argentina, the focus is on a Chinese

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Speaker 6: space station in Patagonia that your predecessor allowed to get built.

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Speaker 6: The US says that the space station has military purposes.

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Speaker 6: Will you close it down?

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Speaker 3: Well, the point is this, negotiations are beginning to order

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Speaker 3: it and inspect that because the Chinese say that is

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Speaker 3: not the case, so we will move towards a situation

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Speaker 3: we will be looking at that. So that is not

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Speaker 3: a problem.

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Speaker 6: I known is a factor in this, the fact that

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Speaker 6: you have that eighteen billion dollar currency swap line with China,

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Speaker 6: which you do need. You need it for the reserves

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Speaker 6: at the central bank. It's a big portion. Does that

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Speaker 6: influence your thinking on China?

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Speaker 3: That situation has to do with an agreement that was

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Speaker 3: entered into and which has to do with the trade

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Speaker 3: exchanges between countries. I won't modify trade exchanges because I

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Speaker 3: think they are trade exchanges between privates. Just as we

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Speaker 3: have a part in our central bank. They have, of

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Speaker 3: course their central bank counter But I don't see a problem,

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Speaker 3: and honestly, the trade relations haven't changed, not a problem.

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Speaker 6: The problem would be if I was the Chinese government

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Speaker 6: tonight and you called me an assassin, I might be

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Speaker 6: less keen to renew the currency line.

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Speaker 3: The almost in the figure have trade relations change, They haven't,

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Speaker 3: not one bit. So that is actually counter factual. There's

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Speaker 3: no truth.

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Speaker 2: That was the President of Argentina have MLA speaking exclusively

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Speaker 2: through a translator to Bloomberg's editor in chief John Mickelthwaite,

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Speaker 2: and you can read more from that interview on Bloomberg

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Speaker 2: dot Com and of course on the Terminal. I wanted

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Speaker 2: to bring in though Bloomberg needs editor Jail Desis for

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Speaker 2: some analysis.

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Speaker 1: On this, Jill.

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Speaker 2: This is a moderation of Hovmla's previous position on China.

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Speaker 2: How has Beijing been playing this relationship?

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Speaker 7: Well, Steven, I think what you're seeing here is Malay

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Speaker 7: really coming to terms with what several other leaders in

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Speaker 7: South America, including Brazil's Bolsonnaro, have, which is China has

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Speaker 7: tremendous influence and in fact a lot of financial currency

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Speaker 7: when it comes to its relationship with these nations. I mean,

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Speaker 7: you just heard John Micklethwaite point out there the importance

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Speaker 7: of that eighteen billion dollar currency swap line. It's in

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Speaker 7: fact the largest source of foreign reserves in Argentina's Central

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Speaker 7: bank offers, making it incredibly critically important there. It's become

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Speaker 7: the biggest and swap line in the world. And then

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Speaker 7: there's also obviously several other important key points of investment

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Speaker 7: that China has in Argentina that make it so important.

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Speaker 7: Most critically, there's a lot in the way of trade

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Speaker 7: for food, soybean supplies, and of course lithium as well,

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Speaker 7: which of course is critical for China to use for

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Speaker 7: battery productions. So I think the totality of this relationship,

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Speaker 7: this economic relationship is really important. And when you're Argentina,

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Speaker 7: you're dealing with inflation of two hundred and seventy six percent,

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Speaker 7: you've got a history of sovereign bound defaults, You've been

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Speaker 7: dealing with six recessions over the last decade. It's really

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Speaker 7: difficult to just suddenly untangle yourself from this incredibly important

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Speaker 7: economic relationship.

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Speaker 2: Now how important is Argentina though to China and its

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Speaker 2: broader investments in Latin America? Is this about Beijing trying

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Speaker 2: to rival US influence in the region.

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Speaker 7: Yeah, Stephen, it is a bit. And look, I mean

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Speaker 7: the US American companies in particular have really kind of

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Speaker 7: started to pull back from South America and Argentina in

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Speaker 7: recent years. Argentina in particular has really turned off some

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Speaker 7: US companies because of how politically and economically volatile it's become.

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Speaker 7: But China's really just held in there all the way.

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Speaker 7: I mean you look at ICBC has, you know, buildings

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Speaker 7: all over the city signs everywhere. You're really you've got

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Speaker 7: these really really important, critical, you know, financial centers in

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Speaker 7: Argentina that China's really kind of pushed into. We just

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Speaker 7: heard a bit about major infrastructure projects, including that space station,

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Speaker 7: which are also critically important. I mean China right now,

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Speaker 7: it's the second biggest buyer of Argentina's in points, behind

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Speaker 7: only Brazil. And you know, again it's also an important

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Speaker 7: client for the soybeans, which China needs to feed its

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Speaker 7: pig herds. It's important as a as a player in

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Speaker 7: the lithium Russian Argentina so and ultimately, Argentina also just

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Speaker 7: recently signed on to China's Belton Road initiative, this you know, billion,

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Speaker 7: multi billion, if not trillion dollar program that China is

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Speaker 7: really using to kind of you know, create influence, particularly

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Speaker 7: among the global South. So i'd say that as a

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Speaker 7: you know, strategic partner in the region, Argentina is incredibly

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Speaker 7: important to China as well.

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Speaker 2: Okay, been breag out as to Joe Desas in Hong Kong,

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Speaker 2: Thanks very much for bringing us your anama of that

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Speaker 2: exclusive interview with Argentina's Javier Malay. Now, after a busy

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Speaker 2: week of Fed speeches, today's non farm paerils report will

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Speaker 2: give us a clear indication of the situation facing policy makers.

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Speaker 2: Boomberg Economics is expecting a slow down in job creation,

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Speaker 2: with one hundred and eighty seven thousand jobs added in March.

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Speaker 2: This comes after Neil Kashkari from the Minneapolis Fed so

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Speaker 2: that interest rate cuts might not be needed at all.

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Speaker 2: This yere Bloomberg TV anchor critic group is with us

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Speaker 2: to help us understand all of this. Could you let's

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Speaker 2: start then with the job's report, the data point we've

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Speaker 2: been waiting for. We learned yesterday that job as claims

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Speaker 2: rose in the final week of March. Are we expecting

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Speaker 2: more evidence of cooling?

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Speaker 8: Yes and no. There seems to be some divergence when

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Speaker 8: you look at Wall Street, which I think makes this

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Speaker 8: job stay a little bit more interesting. The consensus has

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Speaker 8: been a fairly boring for US journalist. But I think

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Speaker 8: this is important because I meant take the Blue of

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Speaker 8: Economics viewpoint. Here, they're predicting one hundred and eighty seven

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Speaker 8: thousand jobs increases. You have the likes VBS. For example,

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Speaker 8: the Investment Bank, they're expecting something like two hundred and

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Speaker 8: forty thousand. That is a big, big range just between

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Speaker 8: those two. Adding some of the other firms, that range

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Speaker 8: gets even bigger. The census here is that what is

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Speaker 8: we're coming right back to normalization. What is normal? Pre

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Speaker 8: pandemic two hundred thousand would have been kind of the

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Speaker 8: beacon for normal. The fact that we're seeing estimates for

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Speaker 8: far above that suggests that no cooling is not what's expected,

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Speaker 8: especially in line with some of the really hot inflation

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Speaker 8: prints that we're getting now. I think the reasoning in

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Speaker 8: the restionale behind someone that is interesting Boomer economics, and

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Speaker 8: particular making the point that you're starting to see divergence

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Speaker 8: in what type of jobs are getting the boost. You're

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Speaker 8: not seeing this broad expansionary store. You're seeing it, for example,

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Speaker 8: more service sector led versus more education kind of lead,

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Speaker 8: for example, so fewer teachers are getting hired, more hospitality

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Speaker 8: workers are getting hired. And that's really a function of

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Speaker 8: where the spending is occurring. Wealthier people are spending on services.

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Speaker 8: Less wealthy people are feeding into the decline in sales

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Speaker 8: and therefore the layoffs.

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Speaker 2: At the same time, Chris, you've been talking all week

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Speaker 2: about how we've been having this feast of FED speakers.

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Speaker 2: Neil Kashgari one of the latest at the banquets. Now

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Speaker 2: he doesn't vote on right policy this year, but he's

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Speaker 2: pushing more Hawker's messages and some of the others Feast.

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Speaker 8: Thanksgiving, Kim early didn't it. They are And it's interesting

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Speaker 8: because you're starting to set divergence again from the FOMC

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Speaker 8: speakers get even bigger.

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Speaker 4: Now.

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Speaker 8: Kashgari, I think is a great kind of beacon to

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Speaker 8: look at because there's speculation out there. Did he move

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Speaker 8: the market yesterday? Did you see that self come in

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Speaker 8: the stock market in the US session? From Kashgari's comments

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Speaker 8: that he doesn't think a rate cut is needed at

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Speaker 8: all if you do actually see inflation continuing the way

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Speaker 8: it has been, so basically sideways move in inflation. Now,

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Speaker 8: keep in mind Kashgari is one a known hawk, so

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Speaker 8: this is not surprising to hear from him, and also

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Speaker 8: not a voting member of the FMC. Nevertheless, he has

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Speaker 8: been right in the past, so some people are kind

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Speaker 8: of viewing him as some sort of Jim Bollard kind

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Speaker 8: of figure. But then Pylon the comments from the fed's

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Speaker 8: Harker coming out of Philadelphia, Loretta Mester making more comments

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Speaker 8: as well. And still you are seeing that divergence the FEDS,

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Speaker 8: Harker saying we need more data points. We have time

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Speaker 8: before we have to act, Loretta Mester saying we do.

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Speaker 8: But also, and I think that kind of divergence is

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Speaker 8: what's making the markets really challenged in terms of pricing,

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Speaker 8: in even what the reaction of today's job support is going.

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Speaker 9: To look like.

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Speaker 2: Does that set us up then for a very exciting

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Speaker 2: day with the job support?

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Speaker 8: It does? I'm at the edge of my seat.

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