1 00:00:03,400 --> 00:00:06,000 Speaker 1: This is Bloomberg Daybreak here for this Monday, the twenty 2 00:00:06,000 --> 00:00:09,400 Speaker 1: seventh of February in London. Coming up today, trading up 3 00:00:09,480 --> 00:00:12,520 Speaker 1: Sooner gets set to unveil a Northern Ireland Brexit deal, 4 00:00:12,600 --> 00:00:16,640 Speaker 1: but will his own party backet Hiring into a headwinds. 5 00:00:16,800 --> 00:00:20,560 Speaker 1: UK firms say job cuts aren't on the cards, even 6 00:00:20,600 --> 00:00:24,200 Speaker 1: as recession risks grow. Nail down for fifty the ECBs 7 00:00:24,280 --> 00:00:27,400 Speaker 1: Christine Legud says a half point hike in March is 8 00:00:27,480 --> 00:00:31,960 Speaker 1: all but certain. HSBC looks to cut its London office space. 9 00:00:32,080 --> 00:00:36,040 Speaker 1: City Group loses a top rainmaker and Fizer and talks 10 00:00:36,080 --> 00:00:39,920 Speaker 1: to acquire Segen for thirty billion dollars. Those are the 11 00:00:39,960 --> 00:00:42,760 Speaker 1: stories we're looking at in today's papers. And I'm Leanne 12 00:00:42,800 --> 00:00:46,760 Speaker 1: Geron's plus. Did COVID nineteen come from a lab leak? 13 00:00:46,960 --> 00:00:51,120 Speaker 1: A US government report says it's the most likely origin. 14 00:00:53,880 --> 00:00:57,680 Speaker 1: That's all straight ahead on Bloomberg Daybreak Europe. The Business 15 00:00:57,720 --> 00:00:59,840 Speaker 1: news You need to start your day in just one 16 00:01:00,080 --> 00:01:04,520 Speaker 1: fifteen minute podcast on Apple, Spotify, The Bloomberg Business, Apple 17 00:01:04,600 --> 00:01:11,680 Speaker 1: and everywhere you get your podcasts. Good morning, I'm Stephen 18 00:01:11,760 --> 00:01:14,399 Speaker 1: Carroll and I'm Caroline Hitker. Here are the stories that 19 00:01:14,440 --> 00:01:17,440 Speaker 1: we're following. Today, the UK and the European Union are 20 00:01:17,440 --> 00:01:20,240 Speaker 1: said to be preparing to unveil a post Brexit settlement 21 00:01:20,280 --> 00:01:23,720 Speaker 1: on Northern Ireland. Bloomberg understands the agreement will be announced 22 00:01:23,760 --> 00:01:26,680 Speaker 1: after a Monday meeting between the Prime Minister, Rishi Sunak 23 00:01:26,760 --> 00:01:30,360 Speaker 1: and the European Commission President or Slavander Lyne. Deputy Prime 24 00:01:30,360 --> 00:01:33,200 Speaker 1: Minister Dominic Rabb says he's helping an agreement will be 25 00:01:33,240 --> 00:01:36,120 Speaker 1: finalized very soon. If we can get this resolve for 26 00:01:36,160 --> 00:01:38,760 Speaker 1: the people of Northern Ireland, for the businesses, for the communities, 27 00:01:39,000 --> 00:01:41,760 Speaker 1: and frankly at the manifesto places where we made really 28 00:01:41,800 --> 00:01:44,600 Speaker 1: to thoroughly, properly fully get Brexit down to be a 29 00:01:44,680 --> 00:01:47,840 Speaker 1: major achievement. While the Deputy Prime Minister is positive, the 30 00:01:47,880 --> 00:01:51,600 Speaker 1: government is facing vocal opposition from Northern Ireland's Democratic Unionist 31 00:01:51,600 --> 00:01:55,040 Speaker 1: Party and some pro Breggs at Tory MP's. If a 32 00:01:55,120 --> 00:01:56,600 Speaker 1: deal can be agreed, it will be seen as a 33 00:01:56,640 --> 00:01:59,800 Speaker 1: triumph for Sunak, who sold sort to dial down ten 34 00:02:00,200 --> 00:02:04,440 Speaker 1: With the EU sense taking power in October. A survey 35 00:02:04,480 --> 00:02:07,520 Speaker 1: of British business leaders has shown that the vast majority 36 00:02:07,600 --> 00:02:10,919 Speaker 1: expect a recession this year, but they don't plan to 37 00:02:10,960 --> 00:02:13,880 Speaker 1: cut jobs, but in bogs, Uan Pots has the details. 38 00:02:14,960 --> 00:02:17,520 Speaker 1: Three quarters of UK business leaders say they expect their 39 00:02:17,520 --> 00:02:20,080 Speaker 1: workforce to stay the same or to grow over the 40 00:02:20,120 --> 00:02:23,639 Speaker 1: next twelve months, with about the same proportion also optimistic 41 00:02:23,720 --> 00:02:27,160 Speaker 1: about their firm's growth prospects. If the survey by Boston 42 00:02:27,200 --> 00:02:29,760 Speaker 1: Consulting Group is right, that makes the Bank of England's 43 00:02:29,800 --> 00:02:33,800 Speaker 1: task in taming inflation much harder. The Bank's forecast hinges 44 00:02:33,880 --> 00:02:37,440 Speaker 1: on rising unemployments, slowing growth in salaries, and when it 45 00:02:37,440 --> 00:02:40,400 Speaker 1: comes to inflation, more than half of the business leaders 46 00:02:40,440 --> 00:02:43,239 Speaker 1: say they plan to continue raising prices over the coming 47 00:02:43,280 --> 00:02:46,400 Speaker 1: six months. In London, I'muan pots Boke deber at Europe 48 00:02:47,000 --> 00:02:49,760 Speaker 1: ECB Presidents Christian Lagard says the center A bank has 49 00:02:49,880 --> 00:02:53,240 Speaker 1: every reason to hike another fifty basis points. In March 50 00:02:53,520 --> 00:02:57,560 Speaker 1: are comments to India's economic times underlying the stubboroughly high 51 00:02:57,720 --> 00:03:01,720 Speaker 1: rate of inflation. Governing Council brig Nasio Vesco told Bloomberg 52 00:03:01,800 --> 00:03:05,560 Speaker 1: the major unknown as if core inflation follows energy prices 53 00:03:05,639 --> 00:03:10,440 Speaker 1: back down. The issue is whether it will go down 54 00:03:10,960 --> 00:03:14,320 Speaker 1: as energy prices are down. That is the big question. 55 00:03:14,720 --> 00:03:20,720 Speaker 1: If the sources of the increasing inflation received then really 56 00:03:20,760 --> 00:03:23,959 Speaker 1: we should we expect, we should expect that prices follow 57 00:03:24,360 --> 00:03:27,760 Speaker 1: non energy prices. If they don't, then this calls for 58 00:03:28,040 --> 00:03:32,040 Speaker 1: monetary policy being very attentive. Let's go. Speaking on the 59 00:03:32,040 --> 00:03:34,760 Speaker 1: sidelines of the G twenty meeting in India, mean while 60 00:03:34,760 --> 00:03:38,280 Speaker 1: the IMF Chrystalina Georgieva warning central bankers at the summer 61 00:03:38,320 --> 00:03:42,480 Speaker 1: to remain vigilant as price risers remain high, now warn 62 00:03:42,520 --> 00:03:45,440 Speaker 1: Buffett is a shareholders to keep the faith on the 63 00:03:45,520 --> 00:03:49,480 Speaker 1: US economy after Berkshire reported weaker results in some of 64 00:03:49,520 --> 00:03:52,960 Speaker 1: its key businesses. Operating earnings fell fourteen percent in the 65 00:03:53,000 --> 00:03:57,440 Speaker 1: fourth quarter as higher prices hit its railroad and insurance units. 66 00:03:57,520 --> 00:04:00,880 Speaker 1: In his annual letter, Buffett says that he's yet to 67 00:04:00,920 --> 00:04:03,120 Speaker 1: see a time when it's right to make a long 68 00:04:03,280 --> 00:04:06,880 Speaker 1: term bet against America. An intelligence report by the US 69 00:04:07,000 --> 00:04:10,680 Speaker 1: Energy Department has reportedly identified a Chinese lab leak as 70 00:04:10,720 --> 00:04:14,360 Speaker 1: the most likely origin of COVID nineteen. According to The 71 00:04:14,360 --> 00:04:17,520 Speaker 1: Wall Street Journal, the conclusion was reached due to new intelligence, 72 00:04:17,560 --> 00:04:21,120 Speaker 1: though the judgment was made with only quote low confidence. 73 00:04:21,400 --> 00:04:24,560 Speaker 1: Bloomberg's at Baxter reports. This is reported to be a 74 00:04:24,600 --> 00:04:27,960 Speaker 1: classified document at one of several but the report says 75 00:04:28,000 --> 00:04:30,799 Speaker 1: the Energy Department believes it was due to a mishap 76 00:04:31,080 --> 00:04:35,240 Speaker 1: at a biological lab. National Security Advisor Jake Sullivan on 77 00:04:35,360 --> 00:04:38,479 Speaker 1: CNN says this is part of an ongoing investigation the 78 00:04:38,520 --> 00:04:42,440 Speaker 1: reference to the Department of Energy. President Biden specifically requested 79 00:04:42,760 --> 00:04:45,279 Speaker 1: that the national Labs, which are part of the Department 80 00:04:45,279 --> 00:04:49,279 Speaker 1: of Energy, be brought into this assessment because he wants 81 00:04:49,320 --> 00:04:53,440 Speaker 1: to put every tool at use. Sullivan says key members 82 00:04:53,440 --> 00:04:55,760 Speaker 1: of Congress will be involved in the loop of all 83 00:04:56,000 --> 00:05:01,480 Speaker 1: investigations in San Francisco. I'm at Baxter Bloomberg Daybreak, euro Right. 84 00:05:01,520 --> 00:05:03,520 Speaker 1: Those are a few of our top stories for you 85 00:05:03,600 --> 00:05:05,880 Speaker 1: this morning. I think a lot of focus over the 86 00:05:05,880 --> 00:05:08,880 Speaker 1: weekend and today of course on whether Rishi Suonac can 87 00:05:09,000 --> 00:05:12,719 Speaker 1: triumph and actually deliver a deal on a post Brexit 88 00:05:12,920 --> 00:05:17,839 Speaker 1: arrangement for Northern Ireland, a deal that okay, his own 89 00:05:17,960 --> 00:05:20,800 Speaker 1: MPs and the DUP actually agree to let alone Europe. Yeah, 90 00:05:21,120 --> 00:05:22,880 Speaker 1: almost this It feels a bit like Christmas Eve two 91 00:05:22,960 --> 00:05:26,080 Speaker 1: years ago when we got the first version of this agreement, 92 00:05:26,800 --> 00:05:28,920 Speaker 1: and all of the other big moments we've had over 93 00:05:28,960 --> 00:05:32,360 Speaker 1: the past couple of years as well. This is another marker, 94 00:05:32,400 --> 00:05:35,200 Speaker 1: another milestone and the Brexit process. It's the sign of 95 00:05:35,200 --> 00:05:38,159 Speaker 1: a new chapter, perhaps a turning a corner in relations 96 00:05:38,160 --> 00:05:41,320 Speaker 1: with the EU after Brexit. But look, our Slavandeline is here. 97 00:05:41,360 --> 00:05:43,080 Speaker 1: We'll hear more from the Prime Minister and from her 98 00:05:43,200 --> 00:05:45,560 Speaker 1: later to see what it is they've come up with, 99 00:05:45,600 --> 00:05:47,880 Speaker 1: and then as you say, the hard work of selling 100 00:05:47,880 --> 00:05:51,760 Speaker 1: it to those key constituencies gets underway. Yeah. Absolutely. Meanwhile 101 00:05:52,440 --> 00:05:54,680 Speaker 1: here in London, of course there may not be much 102 00:05:54,720 --> 00:05:59,840 Speaker 1: elbow room at the swanky bars and cocktail lounges. I am. 103 00:06:00,160 --> 00:06:03,760 Speaker 1: It's very important because of course International Energy Week is back, 104 00:06:04,120 --> 00:06:06,880 Speaker 1: so this is the top gathering for oil traders in 105 00:06:06,920 --> 00:06:09,080 Speaker 1: the world and it's sort of back. I hear in 106 00:06:09,160 --> 00:06:12,640 Speaker 1: full in London this week, and all of the discussion 107 00:06:12,760 --> 00:06:14,240 Speaker 1: is going to be about whether there is going to 108 00:06:14,240 --> 00:06:15,839 Speaker 1: be a big rally in the oil markets or not, 109 00:06:15,880 --> 00:06:19,440 Speaker 1: which have been pretty sort of stagnant even with China's reopening. 110 00:06:19,480 --> 00:06:22,200 Speaker 1: So that's one to watch out for. Interesting one indeed. 111 00:06:22,279 --> 00:06:25,279 Speaker 1: Coming up next, HSBC looks to cutts London offer. Space 112 00:06:25,400 --> 00:06:28,560 Speaker 1: Citygroup loses a top rainmaker and fiser in talks to 113 00:06:28,560 --> 00:06:34,480 Speaker 1: acquire Cgen for thirty billion dollars. Now the paper review 114 00:06:34,680 --> 00:06:37,440 Speaker 1: on Blue Birthday Break Europe, the news you need to 115 00:06:37,480 --> 00:06:41,120 Speaker 1: know from today's papers and Johnius now Swimming bakes of 116 00:06:41,160 --> 00:06:43,919 Speaker 1: Yann Garin's let's start with The Times, Leanne saying that 117 00:06:44,160 --> 00:06:48,919 Speaker 1: HSBC is to have space for its head office. Well, Carolina, 118 00:06:48,920 --> 00:06:51,640 Speaker 1: I always feel like HSBC is one of those markets, 119 00:06:51,720 --> 00:06:54,240 Speaker 1: isn't it in London? We can all see in Canary 120 00:06:54,320 --> 00:06:57,039 Speaker 1: Wharf when you drive into the capital. But now it's 121 00:06:57,080 --> 00:06:59,800 Speaker 1: looking for a new London office that is less than 122 00:07:00,080 --> 00:07:04,279 Speaker 1: half the size of that massive skyscraper at Canary Wharf. 123 00:07:04,600 --> 00:07:08,840 Speaker 1: And this as the enduring shift towards flexible work takes 124 00:07:08,880 --> 00:07:12,280 Speaker 1: its toll on the Capitol's office market, the bank is 125 00:07:12,320 --> 00:07:16,200 Speaker 1: working with the property agents Cushman and Wakefield to find 126 00:07:16,280 --> 00:07:20,480 Speaker 1: a new global headquarters. According to The Times, now HSBC, 127 00:07:20,680 --> 00:07:25,480 Speaker 1: Carolina and Stephen is really embraced a flexible working to 128 00:07:25,600 --> 00:07:28,360 Speaker 1: a greater extent than its peers like JP Morgan and 129 00:07:28,440 --> 00:07:32,600 Speaker 1: also Goldman's Sacks, and is really on this big global 130 00:07:32,720 --> 00:07:36,880 Speaker 1: drive to slash its office space by forty percent compared 131 00:07:36,920 --> 00:07:41,800 Speaker 1: with pre pandemic levels. Now, HSBC's mooted departure from Canary 132 00:07:41,840 --> 00:07:46,320 Speaker 1: Wharf echoes another firm and that's the law firm Clifford Chance. 133 00:07:46,760 --> 00:07:49,200 Speaker 1: And this is all down to things like rising interest 134 00:07:49,280 --> 00:07:52,559 Speaker 1: rates and poor demand to push City offers values down 135 00:07:53,000 --> 00:07:55,960 Speaker 1: fifteen point three percent in just the last six months. 136 00:07:56,240 --> 00:08:00,440 Speaker 1: And this is according to data from MSCI And according 137 00:08:00,480 --> 00:08:03,440 Speaker 1: to a BN article, the building, one of the district's 138 00:08:03,440 --> 00:08:06,920 Speaker 1: tallest towers, as I do see pretty much a landmark, 139 00:08:07,360 --> 00:08:10,840 Speaker 1: is now owned by Qatar's Sovereign Wealth Fund. So there 140 00:08:10,880 --> 00:08:13,720 Speaker 1: we are a real change to the landscape here in 141 00:08:13,760 --> 00:08:16,560 Speaker 1: the city. Indeed, that's ok the Philanco Times. Next the 142 00:08:16,600 --> 00:08:20,000 Speaker 1: headline City Group Blues is a top London based dealmaker 143 00:08:20,440 --> 00:08:23,680 Speaker 1: and she's a woman. Stephen Allison Harding Jones, one of 144 00:08:23,800 --> 00:08:27,200 Speaker 1: City Group's most senior dealmakers, is leaving at the end 145 00:08:27,240 --> 00:08:30,440 Speaker 1: of next month, and this is according to three people 146 00:08:30,760 --> 00:08:33,360 Speaker 1: with knowledge of the matter who have been speaking to 147 00:08:33,400 --> 00:08:36,199 Speaker 1: the FT. Harding Jones has been the head of M 148 00:08:36,280 --> 00:08:39,480 Speaker 1: and A business in Europe, the Middle East and also Africa. 149 00:08:39,880 --> 00:08:43,120 Speaker 1: Now that's since twenty seventeen and she was actually poached 150 00:08:43,320 --> 00:08:47,840 Speaker 1: by City from Ubs. She has advised on huge deals 151 00:08:47,840 --> 00:08:52,320 Speaker 1: like Philip Morris International acquisition of the smokeless tobacco Company's 152 00:08:52,320 --> 00:08:55,920 Speaker 1: Sweetest Match and the four billion pound purchase of the 153 00:08:56,000 --> 00:09:01,000 Speaker 1: department store Selfridges by the tai conglomerate Central Group on 154 00:09:01,080 --> 00:09:04,679 Speaker 1: Australian Group's singer back in twenty twenty one, we did 155 00:09:04,720 --> 00:09:07,360 Speaker 1: speak about that. I'm sure a lot of people remember that. 156 00:09:07,440 --> 00:09:10,680 Speaker 1: Now her departure really comes as a slowdown in deal 157 00:09:10,760 --> 00:09:15,640 Speaker 1: making activity has hit investment banks around the world. So globally, 158 00:09:16,080 --> 00:09:18,600 Speaker 1: M and A fell by a record amount during the 159 00:09:18,720 --> 00:09:22,240 Speaker 1: second half of twenty twenty two. According to the FT, 160 00:09:22,760 --> 00:09:26,400 Speaker 1: worldwide investment bank fees for M and A activity fell 161 00:09:26,559 --> 00:09:31,240 Speaker 1: twenty six percent to thirty five billion dollars and that 162 00:09:31,360 --> 00:09:34,679 Speaker 1: was last year. So a departure of Alison Harding Jones 163 00:09:34,760 --> 00:09:38,080 Speaker 1: from Citygroup, Yeah, that's interesting from the FT. What about 164 00:09:38,080 --> 00:09:40,640 Speaker 1: the Wall Street Journal? This just caught our attention because 165 00:09:40,640 --> 00:09:44,800 Speaker 1: it's so much money. Fizer in talks that acquire sejourn 166 00:09:44,880 --> 00:09:47,559 Speaker 1: and a deal likely valued at more than thirty billion dollars. 167 00:09:47,640 --> 00:09:50,080 Speaker 1: That's the headline. That is the headline, but it's also 168 00:09:50,160 --> 00:09:53,199 Speaker 1: important to note that it's a potential deal. We actually 169 00:09:53,240 --> 00:09:55,720 Speaker 1: don't know if it's going to be successful as of yet. 170 00:09:56,040 --> 00:09:58,560 Speaker 1: And this is an exclusive from the Wall Street Journal, 171 00:09:58,640 --> 00:10:01,000 Speaker 1: and it's reporting that fis as he did says and 172 00:10:01,080 --> 00:10:05,160 Speaker 1: talks to acquire the biotech company Cgen. Cigen would be 173 00:10:05,200 --> 00:10:09,040 Speaker 1: expected to command a premium above its thirty billion dollar 174 00:10:09,240 --> 00:10:12,600 Speaker 1: market value, huge amount of money. It is the latest 175 00:10:12,640 --> 00:10:16,080 Speaker 1: potential deal for a big drug company which is aiming 176 00:10:16,120 --> 00:10:19,240 Speaker 1: to add a promising class of targeted cancer therapy. Is 177 00:10:19,280 --> 00:10:22,760 Speaker 1: now that is Fiser. As I mentioned, talks are really 178 00:10:22,880 --> 00:10:26,080 Speaker 1: at an early stage. It's just no guarantee this deal 179 00:10:26,120 --> 00:10:29,240 Speaker 1: will go ahead. Some of the reason for this hesitation 180 00:10:29,280 --> 00:10:32,280 Speaker 1: as Cgen was an advanced talks last year to acquire 181 00:10:32,840 --> 00:10:37,520 Speaker 1: Murk and Co. But they actually failed to reach an agreement. 182 00:10:37,960 --> 00:10:40,240 Speaker 1: But a deal would help Fiser, one of the largest 183 00:10:40,280 --> 00:10:44,240 Speaker 1: pharmaceutic companies with one hundred billion dollars in sales last year, 184 00:10:44,280 --> 00:10:46,800 Speaker 1: to add to its lineup of cancer treatments. It is 185 00:10:47,200 --> 00:10:50,480 Speaker 1: really working on at the moment, potential deal worth a 186 00:10:50,480 --> 00:10:52,720 Speaker 1: lot of money. Let's see if it goes ahead. We 187 00:10:52,800 --> 00:10:56,320 Speaker 1: know that one with Cigen has not quite made it 188 00:10:56,360 --> 00:10:59,280 Speaker 1: through yet. Okay, Leon Garins, thank you very much for that. 189 00:10:59,320 --> 00:11:03,319 Speaker 1: Look through the newspapers this morning. Okay, now to the markets. Then, 190 00:11:03,360 --> 00:11:07,240 Speaker 1: Friday's robust reading of PC inflation in the US was 191 00:11:07,280 --> 00:11:11,480 Speaker 1: accompanied by faster inflation in both core and super core measures. 192 00:11:11,880 --> 00:11:15,840 Speaker 1: This week we get European inflation data. Another energy driven 193 00:11:15,960 --> 00:11:19,720 Speaker 1: decline is expected in the headline inflation rate for Europe, 194 00:11:19,720 --> 00:11:22,560 Speaker 1: but that may do little to comfort the hawks on 195 00:11:22,600 --> 00:11:25,960 Speaker 1: the ECB. Joining us now is executive editor for Asian Markets, 196 00:11:25,960 --> 00:11:28,360 Speaker 1: Paul Dobson. Paul, great to have you with us. So 197 00:11:28,480 --> 00:11:31,960 Speaker 1: traders have now repriced the peak in US rates. This 198 00:11:32,040 --> 00:11:36,320 Speaker 1: is really crucial watch here. You know, how high is 199 00:11:36,320 --> 00:11:38,600 Speaker 1: the Fed gonna get interest rates and how long is 200 00:11:38,600 --> 00:11:40,360 Speaker 1: it going to keep them there? And in response to 201 00:11:40,400 --> 00:11:44,560 Speaker 1: the latest signs of inflation just refuses to die down 202 00:11:44,600 --> 00:11:47,719 Speaker 1: at the moment, you know, the market continues to calibrate 203 00:11:47,760 --> 00:11:51,800 Speaker 1: its expectations higher, so that we're fully priced for three 204 00:11:51,920 --> 00:11:54,240 Speaker 1: rate hikes and then a little bit more beyond that, 205 00:11:54,320 --> 00:11:57,760 Speaker 1: probably up towards five and a half percent, even are 206 00:11:58,480 --> 00:12:02,840 Speaker 1: looking through the short interest rate spops markets, and you know, 207 00:12:03,080 --> 00:12:05,760 Speaker 1: maybe maybe that's not even far enough. There were some 208 00:12:05,800 --> 00:12:08,600 Speaker 1: reports over the weekends about a study presented at a 209 00:12:08,640 --> 00:12:12,520 Speaker 1: conference in New York Friday talking about needing to go 210 00:12:12,600 --> 00:12:15,160 Speaker 1: as high as six and a half percent to cool inflations. So, 211 00:12:15,240 --> 00:12:18,760 Speaker 1: you know, some really extraordinarily high numbers compared to what 212 00:12:18,760 --> 00:12:22,079 Speaker 1: we've been used to over the past few decades. People 213 00:12:22,080 --> 00:12:24,319 Speaker 1: starting to think about those scenarios and what that might 214 00:12:24,400 --> 00:12:27,160 Speaker 1: mean then for the pricing of equities and FX and 215 00:12:27,200 --> 00:12:30,079 Speaker 1: the rest of the global asset are complex. Yeah, and 216 00:12:30,120 --> 00:12:32,320 Speaker 1: the shake down through the rest of the markets as well. 217 00:12:32,440 --> 00:12:35,280 Speaker 1: In terms of the Euro Area, we're we're going to 218 00:12:35,360 --> 00:12:37,400 Speaker 1: be looking at core inflation on this side of the 219 00:12:37,400 --> 00:12:42,000 Speaker 1: Atlantic now this week. What should we be expecting? What's 220 00:12:42,360 --> 00:12:44,120 Speaker 1: that likely to mean for the ECB? We have those 221 00:12:44,120 --> 00:12:47,360 Speaker 1: comments from Christine Lagarde speaking to an Indian newspaper today. 222 00:12:47,960 --> 00:12:50,920 Speaker 1: I think I think inflation is expected to keep cooling 223 00:12:50,920 --> 00:12:53,080 Speaker 1: with the energy prices, but I think that the ECB 224 00:12:53,200 --> 00:12:56,280 Speaker 1: has continued to be expected to be resolutes in terms 225 00:12:56,280 --> 00:12:59,600 Speaker 1: of keeping going with the price or the interest rate 226 00:12:59,640 --> 00:13:03,560 Speaker 1: hikes in order to continue the path of steadily slower inflation. 227 00:13:03,600 --> 00:13:06,320 Speaker 1: So I think the market is fully priced for as 228 00:13:06,400 --> 00:13:09,240 Speaker 1: much as a half point increase at the next ECB's meeting. 229 00:13:09,280 --> 00:13:11,600 Speaker 1: And again it's important to look at what's the sort 230 00:13:11,640 --> 00:13:14,400 Speaker 1: of endpoint trajectory look like, how much further can the 231 00:13:14,440 --> 00:13:17,320 Speaker 1: ECB go? And I think the market is also priced 232 00:13:17,360 --> 00:13:19,280 Speaker 1: out now the idea that the ECB will be cutting 233 00:13:19,320 --> 00:13:21,520 Speaker 1: rates again later in the year, so again it's that 234 00:13:21,640 --> 00:13:25,240 Speaker 1: sort of like higher peak and more sustained period of 235 00:13:25,400 --> 00:13:28,840 Speaker 1: higher interest rates going forwards. And I think you know 236 00:13:28,880 --> 00:13:31,479 Speaker 1: if you if you translate out to the FX arena, 237 00:13:31,640 --> 00:13:32,920 Speaker 1: one of the things that people are going to be 238 00:13:33,000 --> 00:13:36,440 Speaker 1: looking at is the relative pace of hikes and endpoint 239 00:13:36,480 --> 00:13:39,120 Speaker 1: for the ECB from here relative to the FED, and 240 00:13:39,160 --> 00:13:41,319 Speaker 1: that may give us a better idea of where euro 241 00:13:41,400 --> 00:13:44,320 Speaker 1: dollar is going to wind up. The euro could continue 242 00:13:44,360 --> 00:13:48,040 Speaker 1: to go higher if the ECB pace of hikes or 243 00:13:48,120 --> 00:13:51,560 Speaker 1: ultimate endpoint from here is higher than where the Fed's 244 00:13:51,559 --> 00:13:55,319 Speaker 1: looking to go. Okay, Paul, given your focus on Asian markets, 245 00:13:55,360 --> 00:13:58,600 Speaker 1: I can't let this conversation go by without mentioning China's MPC, 246 00:13:58,800 --> 00:14:00,720 Speaker 1: which starts at the end of this week. This is 247 00:14:01,440 --> 00:14:05,760 Speaker 1: the National People's Congress. It's usually a political moment, isn't it. 248 00:14:05,800 --> 00:14:09,480 Speaker 1: There's still a lot of nervousness around Chinese assets, and 249 00:14:09,559 --> 00:14:12,120 Speaker 1: a lot of that is to do with the politics 250 00:14:12,160 --> 00:14:14,640 Speaker 1: of Shijing Ping. What is your thinking about what the 251 00:14:14,720 --> 00:14:18,480 Speaker 1: MPC might change. Yeah, I would be very interesting to watch. 252 00:14:18,480 --> 00:14:20,040 Speaker 1: And thank you for letting me have at least one 253 00:14:20,080 --> 00:14:23,800 Speaker 1: question on my home Patcher Caroline. So, you know, I 254 00:14:23,840 --> 00:14:28,560 Speaker 1: think the moment that Chinese recovery looks very uneven, and 255 00:14:28,600 --> 00:14:30,520 Speaker 1: I think that the concern for the from the market 256 00:14:30,520 --> 00:14:33,800 Speaker 1: point of view is how much is it going is 257 00:14:33,800 --> 00:14:36,680 Speaker 1: the MPC going to address the consumer versus how much 258 00:14:36,720 --> 00:14:39,360 Speaker 1: is it going to address things like construction. If it 259 00:14:39,440 --> 00:14:42,120 Speaker 1: leans more towards the construction, that could lead to a 260 00:14:42,200 --> 00:14:45,760 Speaker 1: broader recovery, pushing up commodity prices, which will fan inflation 261 00:14:45,760 --> 00:14:47,920 Speaker 1: again for the rest of the world. If it really 262 00:14:47,960 --> 00:14:50,920 Speaker 1: does continue to focus on the consumer, then that could 263 00:14:51,440 --> 00:14:53,880 Speaker 1: help to boost domestic demands some more, and it will 264 00:14:53,880 --> 00:14:56,800 Speaker 1: strengthen different parts of the economy, maybe boost that energy 265 00:14:56,840 --> 00:14:58,920 Speaker 1: demand more than it would do to things like medals. 266 00:14:59,160 --> 00:15:01,720 Speaker 1: I think that a bigger picture is more about trust 267 00:15:01,760 --> 00:15:04,440 Speaker 1: though right It's more about how much of a clique 268 00:15:04,440 --> 00:15:07,720 Speaker 1: she Jinping is surrounding himself with, how reliable that is, 269 00:15:07,920 --> 00:15:10,920 Speaker 1: and in order to really win back the sort of 270 00:15:11,480 --> 00:15:15,160 Speaker 1: support maybe or the sort of long term buy in 271 00:15:15,240 --> 00:15:18,400 Speaker 1: from global investors, which is something so far we're not 272 00:15:18,440 --> 00:15:20,240 Speaker 1: seeing a great deal of. In order to win that back, 273 00:15:20,280 --> 00:15:25,640 Speaker 1: it's going to take much longer sort of period of 274 00:15:25,800 --> 00:15:28,520 Speaker 1: sort of actions that people can predict right, and the 275 00:15:28,760 --> 00:15:32,040 Speaker 1: market doesn't like uncertainty. It doesn't like unpredictability, so so 276 00:15:32,120 --> 00:15:34,160 Speaker 1: giving people that the stuff that they can latch onto 277 00:15:34,160 --> 00:15:37,120 Speaker 1: and a longer term our path is really crucial for 278 00:15:37,160 --> 00:15:42,560 Speaker 1: the longer term investment projections. This is Bloomberg Daybreak Europe. 279 00:15:42,560 --> 00:15:45,000 Speaker 1: You're a morning brief on the stories making news from 280 00:15:45,000 --> 00:15:47,800 Speaker 1: London to Wall Streets and beyond. Look for us on 281 00:15:47,840 --> 00:15:51,680 Speaker 1: your podcast feed every morning on Apple, Spotify, and anywhere 282 00:15:51,800 --> 00:15:54,160 Speaker 1: else you get your podcasts. You can also listen live 283 00:15:54,240 --> 00:15:57,400 Speaker 1: each morning on London DAB Radio, the Bloomberg Business app, 284 00:15:57,440 --> 00:16:00,600 Speaker 1: and Bloomberg dot Com. Our flagship New York station is 285 00:16:00,600 --> 00:16:04,560 Speaker 1: also available on your Amazon Alexa devices. Just say Alexa 286 00:16:04,720 --> 00:16:08,760 Speaker 1: played Bloomberg eleven thirty. I'm Caroline Hitka and I'm Stephen Carroll. 287 00:16:08,840 --> 00:16:11,160 Speaker 1: Join us again tomorrow morning for all the news you 288 00:16:11,240 --> 00:16:22,440 Speaker 1: need to start your day right here on Bloomberg Daybreak Europe.