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

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Speaker 2: This is the Bloomberg daybat Curate podcast. Good morning, It's Thursday,

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Speaker 2: the second of April. I'm Caroline Hepga in London. Coming

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Speaker 2: up today. Messaging conflict, President Trump threatens to escalate the

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Speaker 2: war with Iran while saying the end.

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Speaker 3: Of hostilities is very close.

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Speaker 2: European allies feared Trump could defang NATO over their refusal

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Speaker 2: to support the conflict in the Middle East. Plus, NASA

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Speaker 2: astronauts lift off on a trip to circle the Moon,

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Speaker 2: taking them deeper into space than anyone in history. Let's

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Speaker 2: start with the roundup of our top stories. Five weeks

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Speaker 2: into the war with Iran, President Trump has delivered a

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Speaker 2: prime time address in which he has said that US

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Speaker 2: operations are close to completion, while also pledging more aggressive actions.

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Speaker 2: The speech comes as the President is grasping for an

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Speaker 2: off ramp in a conflict that has quickly slipped out

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Speaker 2: of control, But rather than reassuring markets that he could

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Speaker 2: bring the water to a swift end, his remarks appear

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Speaker 2: to have rattled investors.

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Speaker 4: We are on track to complete all of America's military

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Speaker 4: objectives shortly, very shortly. We're going to hit them extremely

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Speaker 4: hard over the next two to three weeks. We're going

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Speaker 4: to bring them back to the stone ages where they belong.

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Speaker 2: Those comments sent the price of crude soaring, as stocks

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Speaker 2: tumbled and treasury yields climbed in tandem with the US dollar.

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Speaker 2: President Chump also said that the Strait of Hormus would

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Speaker 2: reopen naturally once hostilities subside, without providing details, as he

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Speaker 2: offered no concrete plan for reopening the vital waterway, and

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Speaker 2: he pledged to take more aggressive measures if Iran does

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Speaker 2: not negotiate a cease far with the US.

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Speaker 4: If during this period of time no deal is made,

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Speaker 4: we have our eyes or key targets. If there is

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Speaker 4: no deal, we are going to hit each and every

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Speaker 4: one of their electric generating plans very hard, and probably simultaneously.

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Speaker 4: We have not hit their oil, even though that's the

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Speaker 4: easiest target of all because it would not give them

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Speaker 4: even a small chance of survival or rebuilding. But we

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Speaker 4: could hit it and it would be gone and there's

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Speaker 4: not a thing they could do about it.

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Speaker 2: The president also did not present any new arguments or

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Speaker 2: explanations for the war, instead reiterating his desire to destroy

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Speaker 2: Iran's military and nuclear capabilities. Ahead of Trump's address, Iranian

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Speaker 2: President Asud Pazeshkian took the unusual step of releasing a

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Speaker 2: letter address to the Americans American people, arguing that his

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Speaker 2: country has no enmity with the US US allies. Meanwhile,

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Speaker 2: our meeting to prepare a diplomatic outreach to Ivon which

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Speaker 2: is starting to operate the Strait of Home Who is

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Speaker 2: like a toll booth. A Bloomberg investigation reveals how Iran

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Speaker 2: friendly tankers are being given secret codes and charged around

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Speaker 2: a dollar per barrel of oil for safe passage. Reopening

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Speaker 2: the Strait has become a key priority for governments around

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Speaker 2: the world, with UK Prime Minister Keir Starmer pushing for talks.

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Speaker 5: We're exploring each and every diplomatic avenue that is available

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Speaker 5: to US, and the UK has now brought together thirty

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Speaker 5: five nations around our statement of intent to push as

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Speaker 5: one for maritime security across the Gulf.

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Speaker 2: The British leader has been a frequent target of the

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Speaker 2: White House for refusing to join in the war. Those

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Speaker 2: talks that Starmer references are happening later today here in London,

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Speaker 2: and the US is not expected to be attending them.

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Speaker 2: European leaders, meanwhile, are concerned that President Trump's threats are

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Speaker 2: to withdraw from Lato erode the Alliance at a critical

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Speaker 2: moment in its history. When asked by the Telegraph newspaper

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Speaker 2: if he would consider pulling the US out of the treaty,

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Speaker 2: President Trump said, oh, yes, I would say it's beyond reconsideration.

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Speaker 2: In the same interview, the President called the block a

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Speaker 2: paper tiger and criticized European member's refusal to send ships

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Speaker 2: to unblock the Strait of Hormus. NATO's Supreme Allied Commander

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Speaker 2: for Transformation, Pierre Vandier, says the Alliance must weather the storm.

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Speaker 6: The crisis is when you are the ties of your

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Speaker 6: car are flat. A shock is where you hit a tree.

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Speaker 7: We are in a world where hitting trees now it's

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Speaker 7: a new normal, and I think for an alliance it's

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Speaker 7: a strong, strong challenge to be able to adapt at

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Speaker 7: a very high speed to these shocks.

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Speaker 2: Van Day added that it's a moment when we need

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Speaker 2: to have cool heads. His comments came as the FT

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Speaker 2: reported Trump had threatened to stop apply weapons to Ukraine

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Speaker 2: in order to pressure the Europeans to join a coalition

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Speaker 2: of the willing to reopen the Strait of Hormuz. The

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Speaker 2: Ward of Arn has prompted a surge in UK petrol prices.

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Speaker 2: It's a development which as to the pressure facing Prime

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Speaker 2: Minister Kis Starmer to help those struggling with the cost

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Speaker 2: of living. Blueberg's Tama at Abayo has the story.

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Speaker 3: Truly unprecedented.

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Speaker 8: That's how motoring group the RAC have described March as

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Speaker 8: fuel price increases. It's after a record surge prompted by

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Speaker 8: the conflict in the Middle East led to the fastest

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Speaker 8: rising costs over a single month. Now the situation has

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Speaker 8: intensified calls for the government to step in. Though Prime

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Speaker 8: Minister Kirs Starmer has acknowledged the situation, he stopped short

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Speaker 8: of announcing any major news support during.

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Speaker 3: A speech yesterday.

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Speaker 8: By contrast, other countries, including Germany, Slovenia and Hungary have

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Speaker 8: introduced measures such as price camps and fuel tax cuts.

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Speaker 8: In the UK, both the main opposition Conservative Party and

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Speaker 8: Pole leading Reform have called for plans to unwind a

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Speaker 8: reduction to fuel duty to be reversed.

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Speaker 3: In London.

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Speaker 6: To You added by Bloomberg.

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Speaker 2: Radio, the Trump administration is preparing to outline a tied

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Speaker 2: system for tariffs on steel and aluminium products fifty percent.

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Speaker 2: Tariffs on a large number of derivative products will be maintained,

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Speaker 2: while other products will be tariffed at a lower twenty

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Speaker 2: five percent rate, and some.

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Speaker 3: Will fall below that level.

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Speaker 2: Bloomberg understands that the expected announcement could come as early

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Speaker 2: as today in response to pushback from American companies over

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Speaker 2: widespread levies posing difficulties for imports into the US. The

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Speaker 2: move comes a year after President Trump announced his Liberation

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Speaker 2: Day tariffs. US imports from April to December twenty twenty

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Speaker 2: five were down just one point seven percent compared to

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Speaker 2: the same period a year prior. And lastly, a crew

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Speaker 2: of NASA astronauts are going to be closer to the

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Speaker 2: Moon than any other person than any human in some

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Speaker 2: fifty years. Here's the moment that Artemis two the mission

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Speaker 2: took off.

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Speaker 1: Three two one booster ignition and lift.

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Speaker 2: Off good roll pitch.

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Speaker 7: Rather rare pitch.

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Speaker 9: Houston now controlling the flight of Integrity on the heart

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Speaker 9: of this two mission around them.

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Speaker 2: So that was the rocket taller than the Statue of Liberty,

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Speaker 2: taking off, reaching speeds of around seventeen thousand, five hundred

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Speaker 2: miles per hour as it hurtled to space. Its crew

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Speaker 2: is now set to travel further into space than anyone

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Speaker 2: in history and fly by the Moon's surface in about

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Speaker 2: four days time.

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Speaker 3: So those are our top stories.

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Speaker 2: Of course, President Trump made reference to Artemis two and

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Speaker 2: that take off that moon own orbital trip in his

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Speaker 2: speech to the nation only a few hours ago, but

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Speaker 2: the main subject of the speech was of course, around Iran,

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Speaker 2: talking about hitting Iran extremely hard over the next two

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Speaker 2: to three weeks potentially. Oil prices have surged on the

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Speaker 2: back of that. We are up five point seven percent

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Speaker 2: for brain crude futures, again reversing the moves that we

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Speaker 2: saw yesterday. We're back to one hundred and six dollars

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Speaker 2: ninety one for brainth futures. This is we see a

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Speaker 2: reversal in global stock gains that we saw yesterday. The

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Speaker 2: msciased Pacific indexes down by two point three percent this morning,

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Speaker 2: stop futures for Europe slumping one point nine percent. You

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Speaker 2: have teny US treasury yields surging six basis points at

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Speaker 2: four thirty seven this morning, and the dollar also strengthening

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Speaker 2: four tenths of one percent on the uncertainty and really

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Speaker 2: the message that markets did not want to hear a

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Speaker 2: potential prolongation of the war in Iran. Well, in a moment,

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Speaker 2: we're going to bring you the latest on the prospect

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Speaker 2: of escalations in that war. Plus we'll discuss German efforts

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Speaker 2: to take on alleged scammers in a ford worth apparently

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Speaker 2: some three hundred million euros. Now, President Trump has returned

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Speaker 2: to rhetoric around bombing Iran back to the Stone Ages

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Speaker 2: and hitting Iran extremely hard over the next two to

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Speaker 2: three weeks if there is no deal. It has rattled markets,

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Speaker 2: it has sent oil prices higher. Joining US now to

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Speaker 2: discuss is Bloomberg's Washington deputy bureau chief Laura Davison.

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Speaker 3: Laura, very good.

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Speaker 2: To speak to you, and thank you for being with us.

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Speaker 2: So only a few hours overnight, of course, London time

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Speaker 2: that President Donald Trump gave that prime time address in

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Speaker 2: order really to sell the American public on his Iran war.

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Speaker 2: Is it any clearer to you to the public when

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Speaker 2: the war against Iran on the US side will end?

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Speaker 9: It is not at all clear, and perhaps even less

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Speaker 9: clear than before the speech occurred. There was a lot

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Speaker 9: of optimens of going into the speech that he might

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Speaker 9: may lay out a little bit more of his thinking about,

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Speaker 9: you know, what the process would be to end this war,

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Speaker 9: what key objectives he's looking for, and you know, if

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Speaker 9: there are any red lines that you know, he's he's

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Speaker 9: he's kind of drawing around this conflict. Instead, we heard

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Speaker 9: a lot of what he's already said, even in some

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Speaker 9: mixed messaging from him, in terms of that he you know,

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Speaker 9: plans to step up strikes on Iran in the next

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Speaker 9: two to three weeks, while also talks ongoing, which seemed

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Speaker 9: quite at conflict. He also didn't necessarily commit to to

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Speaker 9: ending the war within that two to three week timeline,

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Speaker 9: as we've heard him say previously. So this has been

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Speaker 9: a you know, sort of a something that has really

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Speaker 9: sparked a lot of alarm both in Washington among Republicans

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Speaker 9: looking at the political risk here and as we've seen

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Speaker 9: in markets, you know, a real reversal of some of

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Speaker 9: the more positive trends we were seeing earlier in the week.

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Speaker 9: You know, Trump, you know, in his speech, you know,

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Speaker 9: acknowledge some of the economic pain of acknowledging that gas

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Speaker 9: prices were up, but said those prices would soon decline

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Speaker 9: as well as that the stock market would would continue

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Speaker 9: to rise and to see a reversal there. You know, really,

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Speaker 9: as he was speaking, we saw the opposite of that

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Speaker 9: if we saw you know, oil prices spiking and stocks declining.

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Speaker 3: Yeah. Absolutely.

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Speaker 2: The President is also leaving the reopening of the Strait

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Speaker 2: of hor Moves, which is the main economic challenge globally

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Speaker 2: to others. He talked about they must grab it and

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Speaker 2: cherish it. They can do it easily. I mean, one

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Speaker 2: consequence of the wars is the economic crisis for allies

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Speaker 2: in Europe and in Asia. Does that mean anything in Washington?

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Speaker 2: Is that diplomatic fallout from that?

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Speaker 9: Yes, this has been you know, one of the biggest

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Speaker 9: reversals on Trump's part during this whole process of you know,

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Speaker 9: just a couple of weeks ago, his singular focus was

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Speaker 9: on reopening the Strait of Horror movees, sort of lambasting

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Speaker 9: allies to join the US military in that effort, and

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Speaker 9: he's just in the you know, in recent days, suggested

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Speaker 9: that he would end this conflict without there being any

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Speaker 9: sort of resolution on what happens with the Strait of

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Speaker 9: horm Moves. We've seen sort of other allies both in Europe,

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Speaker 9: the Golf region as well as Asia sort of band

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Speaker 9: together without the US to sort of take on this

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Speaker 9: task of what next steps would look like, either diplomatic

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Speaker 9: or militarily. The UK is convening a call today with

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Speaker 9: about thirty five representatives from different countries to discuss exactly

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Speaker 9: what this process.

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Speaker 3: Would look like.

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Speaker 9: So we're seeing, you know, kind of with the US

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Speaker 9: and specifically not being invited. So as the US has

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Speaker 9: taken a real hardline approach here, other countries have decided

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Speaker 9: to you know, sort of exclude the US from this talks,

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Speaker 9: seeing that that may be an easier way or at

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Speaker 9: least a more palatable way to approach the Iranians with

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Speaker 9: some sort of solution to open a waterway that's critical

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Speaker 9: to global trade that has been effectively closed.

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Speaker 2: Yeah, Iran's response present Trump's demands are maximalist and illogical,

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Speaker 2: is what we have heard as a sort of reply

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Speaker 2: from Iran. What hope of diplomacy now if we don't know,

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Speaker 2: you know, when the war is going to end?

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Speaker 9: Even less optimistic than it was you know, a couple

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Speaker 9: of days ago, and we saw the Iranian president put

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Speaker 9: out this open letter to the American public and I

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Speaker 9: just want to underscore how unusual of a move that

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Speaker 9: is from the Iran's part to not go through mediators,

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Speaker 9: to not sort of have these behind the door discussions,

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Speaker 9: but rather to put out something that's public facing, sort

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Speaker 9: of intended to send a message, you know, beyond just

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Speaker 9: diplomats in the White House, but to ordinary American saying that,

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Speaker 9: you know, Iran is in a strong position. You know,

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Speaker 9: the letter suggested that, you know that the White House

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Speaker 9: was using overly bombastic language and not being truthful with

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Speaker 9: its own people. And so this is a you know,

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Speaker 9: sort of a you know, a real you know, if

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Speaker 9: if Trump is punching them, then Iran is punching back

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Speaker 9: here and saying, look, you know, we are coming from

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Speaker 9: this from a position of strength. We don't see a

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Speaker 9: need to negotiate right now, and we're not going to

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Speaker 9: give into it to strong arming.

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Speaker 2: Yeah, indeed, that letter was very interesting. You can read

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Speaker 2: the full thing on the Bloomberg terminal, of course, where

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Speaker 2: we've printed it out for you, and it is addressed

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Speaker 2: to the people of the United States, talking about Iran

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Speaker 2: being one of the oldest continuous civilizations in human history,

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Speaker 2: and going on from there to make the Iranian cases.

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Speaker 2: You say, just very briefly on President Trump's approval ratings

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Speaker 2: in all of this. You know, I don't want to

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Speaker 2: ignore the absolute humanitarian catastrophe that this is causing in

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Speaker 2: the Middle East, but tell us about the approval ratings

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Speaker 2: with midterms looming also for the US president.

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Speaker 9: There are a lot of warning signs in these numbers

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Speaker 9: for Republicans as they head into the midterms. You know,

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Speaker 9: the latest poll from CNN shows Trump's approval rating on

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Speaker 9: his job performance totally around thirty five percent approval, which

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Speaker 9: is not tip you know, it's on the low end,

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Speaker 9: but not out of the range of normal for him.

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Speaker 9: But what's a really concerning number is that on his

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Speaker 9: handling of the economy is at thirty one percent. This

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Speaker 9: is an issue that Republicans were hoping to run on

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Speaker 9: in the midterms, tax cuts and the strength of the economy.

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Speaker 9: It's looking like more Americans than not, you know, almost

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Speaker 9: from a ratio of two to one don't approve of

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Speaker 9: the way that Trump has steered the economic matters.

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Speaker 2: Yeah, okay, so very difficult picture. After President Donald Trump's

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Speaker 2: adjusts to the nation a few hours ago, Loura, thank

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Speaker 2: you so much for being with me and explaining it.

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Speaker 2: That is Bloomberg's Washington Deputy bureau chief, Laura Davison. Really

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Speaker 2: appreciate your time in understanding what the president's points were

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Speaker 2: and how they've translated into markets and into politics. I

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Speaker 2: do want to point to one story that I think

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Speaker 2: is also very interesting.

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Speaker 3: As the consequence of.

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Speaker 2: This war in the Middle East, we are in the

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Speaker 2: middle of a global tug of war of fuel.

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Speaker 3: That's got to be said.

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Speaker 2: Jack Whittles and an number of other Bloomberg reporters have

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Speaker 2: been writing about this. A twelve thousand mile journey showing

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Speaker 2: the scramble for diesel. You've got swing fuel prices forcing

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Speaker 2: traders into these longer and really strange journeys for cargoes,

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Speaker 2: going on these routes that they otherwise just would not

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Speaker 2: take and sort of wouldn't make economic sense. They quote

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Speaker 2: in the story that I want to highlight, and I'll

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Speaker 2: put a link to it in our podcast show notes.

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Speaker 2: They highlight a Sparta commodities traders saying Europe is still

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Speaker 2: short of diesel, but the situation in Asia is so

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Speaker 2: much more acute that prices there are pulling barrels halfway

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Speaker 2: around the world. So there are some really strange and

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Speaker 2: difficult things happening in the world when it comes to

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Speaker 2: getting hold of bowels of crude oil. Stay with us

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Speaker 2: more from Bloomberg Day Baqube coming up after this, right,

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Speaker 2: want to turn our attention though to something different. Remember

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Speaker 2: five years ago the collapse of wire card Well. Germany

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Speaker 2: is taking on a global payments scandal. Prosecutors say that

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Speaker 2: they have uncovered an alleged scammed that actually involves four

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Speaker 2: German payment firms. Joining us now as Bloomberg's EU finance

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Speaker 2: reporter Nicholas Comfort to discuss this. Nicholas, good to have

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Speaker 2: you on the program. What are these allegations and how

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Speaker 2: have they actually come to light?

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Speaker 6: Good morning.

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Speaker 10: So yes, back in November we had the German authorities

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Speaker 10: say that there was a three hundred million euros more

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Speaker 10: than three million euros in damages to credit card holders

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Speaker 10: from around the world who had been signed up to

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Speaker 10: websites porn or dating or streaming websites, fake websites which

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Speaker 10: they had not wanted to sign up to because their

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Speaker 10: credit card details have been stolen by three criminal networks,

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Speaker 10: and these networks allegedly used these four German payment companies

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Speaker 10: the prosecutors and the authority of the time, they were

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Speaker 10: a bit short on detail, but at this deep dive

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Speaker 10: that we've done now and this story we put up

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Speaker 10: today shows that really from how the players involved, how

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Speaker 10: it all started with a client broker, a guy who

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Speaker 10: had introduced these payment companies to lucrative customers from pornography,

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Speaker 10: from gambling and other types of adult entertainment, and then

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Speaker 10: how they had sort of this had been too good

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Speaker 10: to pass up for these payment companies, and when he

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Speaker 10: got arrested back in twenty twenty on a different matter,

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Speaker 10: they thought themselves, ooh, who is this guy we've been

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Speaker 10: doing business with, and they look closer, and then they

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Speaker 10: filed sort of suspicious activity reports to to money laundry watchdogs.

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Speaker 2: Yes, that is interesting in terms of the exposure. I

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Speaker 2: suppose the reliance on high risk clients as their called,

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Speaker 2: you know, for the profits and growth of these businesses.

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Speaker 3: I mean, how has this all come about? I suppose.

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Speaker 11: So German payment companies they were looking for an edge

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Speaker 11: and they said themselves, we have a higher risk appetite

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Speaker 11: than payment companies in other parts of the world, for

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Speaker 11: example the.

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Speaker 6: United States, whether that was for regulatory.

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Speaker 10: Reasons the watchdogs not looking as closely here as they

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Speaker 10: might be doing in other jurisdictions or maybe cultural ones

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Speaker 10: sort of pornography is not a taboo issue in Germany,

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Speaker 10: for example.

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Speaker 6: But they said, this is this is a this is

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Speaker 6: a niche which we.

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Speaker 10: Can use to really to to well, initially to base

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Speaker 10: our business on.

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Speaker 6: But even as they as.

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Speaker 10: They became bigger, as sort of as online shopping got

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Speaker 10: more and more became more common, people use more cards, payments,

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Speaker 10: this was still a really important part of their business

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Speaker 10: because it was so profitable. They've now ditched those clients.

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Speaker 10: They have the payment companies they because of because of

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Speaker 10: regulatory pressure also related to this particular particular scandal, but

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Speaker 10: it was for the longer time, these these companies that

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Speaker 10: are trying to cast themselves at the FinTechs of tomorrow,

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Speaker 10: they were still very much reliant on the business model

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Speaker 10: of yesterday.

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Speaker 3: Yeah, that's interesting. What do the individuals and businesses say?

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Speaker 6: Though? That's important? Yes, So let's start with individuals.

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Speaker 10: So there were allegedly people at these criminal networks. There

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Speaker 10: were alleged to people at the payment companies also who cooperated,

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Speaker 10: according to the German authorities, now in our reaching reaching

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Speaker 10: out to them, the individuals have their lawyers have either

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Speaker 10: declined to comment or they have not responded to to

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Speaker 10: our comments. One of the executives who allegedly was involved

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Speaker 10: in this, he has denied the allegations in response with

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Speaker 10: your authorities. But that's to the authorities the companies, as

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Speaker 10: I said, they say they've they've ditched clients. They've they've

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Speaker 10: no longer worked with high risk clients because of the rest

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Speaker 10: view pressure. You could argue whether it's because they were

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Speaker 10: jumping or put or being pushed, but they no longer

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Speaker 10: work with them. They say that they've done the work

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Speaker 10: to to remediate to get back in line with the expectations,

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Speaker 10: but it's definitely cast a shadow over the industry as

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Speaker 10: it copes with other challenges, for example, just those post

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Speaker 10: pandemic growth expectations not panning out.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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