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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: DAYBAQ podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Thursday, the twentieth of June in London.

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Speaker 1: I'm Caroline Hepkot.

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Speaker 2: And I'm Stephen Carroll. Coming up today. UK inflation returns

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Speaker 2: to two percent, but the looming election makes the Bank

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Speaker 2: of England unlikely to cut rates today.

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Speaker 1: New polling suggests that the UK Prime Minister could lose

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Speaker 1: his seat in Parliament as voting intentions point to a

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Speaker 1: Tory wipeout.

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Speaker 2: Plus do you have what it takes? Hedge Fund Talent

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Speaker 2: schools are looking for the perfect trader. We lift the

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Speaker 2: lid on the in house training schemes for rising stars.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: The Bank of England is expected to hold interest rates

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Speaker 2: steady when they announce their latest decision today. Most economists

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Speaker 2: belief policymakers will keep rates at five and a quarter

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Speaker 2: percent given the looming general election. Inflation finally reached the

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Speaker 2: Bank of England's target of two percent in the May

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Speaker 2: figures for the first time in nearly three years, but

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Speaker 2: as not West Market's UK rate strategy head Imagen Batterer

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Speaker 2: notes services inflation came in above the committee's expectation.

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Speaker 3: BOE had elevated service price inflation to be their key

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Speaker 3: indicator of inflation persistence. That's the key thing that they

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Speaker 3: were watching to give them the signal that they could

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Speaker 3: cut rate, and that service price inflation print at five

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Speaker 3: point seven still leaves an August cut. I think in

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Speaker 3: the balance, had it been higher, you could easily say

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Speaker 3: that an August cut was now off the card. Had

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Speaker 3: it been lower, I think you could say, yeah, that

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Speaker 3: brings an August cut, you know, to a clear base case.

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Speaker 3: But five to seven it's kind of a no man's

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Speaker 3: land print, and we're left with August still being our

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Speaker 3: sort of marginal base case for the first rate cut.

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Speaker 2: Image in Batterer from that west they're speaking as the

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Speaker 2: BOE has canceled all of its public statements until after

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Speaker 2: the election, meaning there'll be no clues about how the

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Speaker 2: inflation data may have changed the NPC's thinking. Ploomberg Economics

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Speaker 2: now season August rate cut as more likely than not.

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Speaker 1: Switzerland Central Bank also decides on interest rates today, with

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Speaker 1: economists split over whether or not they will cut the

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Speaker 1: Swiss National Bank was the first major central bank to

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Speaker 1: reduce rates in March to one and a half percent,

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Speaker 1: and could now be the first to stop easing. Inflation

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Speaker 1: in Switzerland is low compared to peers, but price growth

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Speaker 1: also stopped slowing in recent readings, offering the SNB justification

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Speaker 1: either to cut or to hold. President Thomas Jordan's view

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Speaker 1: on the Swiss Frank will also be crucial after volatility

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Speaker 1: in the euro Frank rose in the wake of Immanuel

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Speaker 1: Macon's snap election call.

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Speaker 2: In the UK, three different polls are projecting a Conservative

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Speaker 2: wipeout in the fourth of July election, with one even

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Speaker 2: suggesting the Prime Minister will lose his seat. The poster

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Speaker 2: will see the Conservatives winning between fifty three and one

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Speaker 2: hundred and fifty five places in Parliament, potentially the worst

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Speaker 2: result in its one hundred and ninety year history. Yugov's

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Speaker 2: director of political analytics, Patrick England, was behind one of

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Speaker 2: the surveys.

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Speaker 4: The polls do tend to narrow, and the governments do

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Speaker 4: tend to recover and their elections do become closer as

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Speaker 4: we go through the campaign, and we're just not seeing that.

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Speaker 4: In the minute one hundred and nine seats. We're currently

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Speaker 4: projecting as a toss up. Too close to call a

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Speaker 4: change election, yes, but things certainly could change in between

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Speaker 4: now and polling day.

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Speaker 2: That's Patrick English from Yugov. One of the other polling companies, Savanta,

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Speaker 2: is predicting that Richie Sunak would lose his seat.

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Speaker 1: The head of France's main business lobby has criticized both

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Speaker 1: the far right and the alliance of left wing parties,

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Speaker 1: saying that they are a danger to the economy. Medef's

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Speaker 1: Patrick Martin told La Figaro newspaper that Marie Le Penn's

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Speaker 1: national rally will cut France off from the EU, while

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Speaker 1: the left wing Popular Front group wants to see a

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Speaker 1: massive rise in spending. The comments come as investors worn

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Speaker 1: of the weak economic backdrop to the parliamentary elections in France.

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Speaker 1: Here is Tikihau's head of Capital market strategy, Raphael tou A.

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Speaker 5: France came into this episode with a week positioning towards

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Speaker 5: its deficity. It's the second largest deficit in the Eurozone.

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Speaker 5: It's one of the highest racial date of LGDP at

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Speaker 5: ten percent. Remember that two weeks ago SMP dongrady its rating.

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Speaker 5: So the narrative was pretty harsh on friends before the

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Speaker 5: addiction and is getting even worse.

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Speaker 1: Raphael Tuan was speaking ahead of a series of French

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Speaker 1: government bond auctions later today, which will test investor appetite

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Speaker 1: for the first time. Since President Macon called the snap

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Speaker 1: parliamentary elections, French bonds have seen one of the most

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Speaker 1: brutal routes in decades after the announcement.

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Speaker 2: China seems to be preparing a number of targets in

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Speaker 2: order to punish the European Union for its proposed tariffs

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Speaker 2: on electric cars. The superpower has started anti dumping investigations

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Speaker 2: into brandy, pork, cars and wine. Bloomberg's Stephen Engel says

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Speaker 2: a targeted retaliation is expected.

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Speaker 6: The European Union and we'll go ahead with about forty

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Speaker 6: eight percent tax on those Chinese evs, and there is

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Speaker 6: said to be through state media as well as hints

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Speaker 6: from the Chinese government that there's going to be retaliatory action,

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Speaker 6: probably more targeted against products that China can source elsewhere.

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Speaker 2: Anglad strategic sectors like planemakers were likely to be excluded

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Speaker 2: from any trade friction. China is a large export market

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Speaker 2: from any EU countries. And its playbook could now hurt

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Speaker 2: specific industries in EU countries, reminiscent of how Beijane dealt

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Speaker 2: with Australia a few years ago.

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Speaker 1: Citygroup says that artificial intelligence is likely to displace more

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Speaker 1: jobs in banking than anywhere else. A report by the

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Speaker 1: bank predicts more than half of jobs in the sector

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Speaker 1: could be automated. Blue box James Orcok has more.

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Speaker 7: Long established jobs and firms will vanish and global profits

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Speaker 7: will be one hundred and seventy billion dollars higher in

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Speaker 7: the next five years. That's the verdict of Citygroup's report

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Speaker 7: into how AI will transform the world of finance. It

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Speaker 7: says fifty four percent of jobs in banking can be automated,

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Speaker 7: although firms may keep headcount steady is they hire AI

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Speaker 7: managers to keep in line with regulations. Some of the

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Speaker 7: world's biggest banks are already poaching AI engineers and looking

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Speaker 7: to integrate them into their portfolios. In London, James Wilcock

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Speaker 7: the Bug Radio.

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Speaker 1: Now in a moment, we're going to bring you more

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Speaker 1: on today's Bank of England decision. I'd also tell you

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Speaker 1: about how hedge funds are now running in house training programs,

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Speaker 1: so try to create the money making stars of tomorrow.

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Speaker 1: I love this story. We're going to get to that

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Speaker 1: in a minute. But also this quartar ride. The price

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Speaker 1: of chocolates.

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Speaker 2: Now, we knew that the price of Coco has been

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Speaker 2: going up on the markets, but a warning this time

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Speaker 2: from a managing director at Nesley in the UK and

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Speaker 2: Ireland talking to our colleague Mum big Gettai about this

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Speaker 2: and says the consumers have youet to see the impact

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Speaker 2: of the explosion and Coco prices, and that companies like

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Speaker 2: his will inevitably have to start passing on higher costs.

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Speaker 2: He thinks that's going to impact demand for their products

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Speaker 2: as well. Coco Future, who is survee to a record

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Speaker 2: of more than eleven thousand dollars a ton in New

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Speaker 2: York in recent months. This is partly linked to poor

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Speaker 2: harvest and West Africa, which have curved output as well,

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Speaker 2: but companies like Nesle have been able to hedge on

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Speaker 2: those prices, which means that it's limited the impact to

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Speaker 2: what you and I are paying. We buy bars of

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Speaker 2: chocolates infrequently, of course. Caroline in the shops and Bloomberg

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Speaker 2: Intelligence says that it'll take could take another six to

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Speaker 2: twelve months before consumers actually start to see the impact.

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Speaker 1: Yeah. Absolutely. Listen, We've spoken to mumbe get our number

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Speaker 1: of times on this story, you know, as the prices

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Speaker 1: started to ramp up. She's so interesting. She visits farmers

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Speaker 1: on the ground as some reporting in each of the

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Speaker 1: different countries you know, where the big coco exporters are,

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Speaker 1: so she's very fascinating.

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Speaker 5: Yeah.

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Speaker 1: It just keeps reminding me. I've got to stock up

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Speaker 1: on my tasty tweets early. But yeah, the price rises

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Speaker 1: are going to hit consumers.

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Speaker 2: That deluscating stockpiling to be clear, but certainly an interesting

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Speaker 2: indication coming from that story. And when you can read

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Speaker 2: on Bloomberg dot com and on the terminal, let's bring

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Speaker 2: you more though on today's Bank of England decision, perhaps

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Speaker 2: one meeting with the BUE is thankful the decision has

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Speaker 2: been made for them. Prime Minister Riccnax moved three weeks

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Speaker 2: ago to coln election as all but ruled out a

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Speaker 2: rate cut on Policymakers announced the decision at twelve pm

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Speaker 2: London time. Today are UK correspondent Lizzie Burden is outside

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Speaker 2: the Bank of England. Morning to you, Lizzie, Is there

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Speaker 2: anything that markets should be watching out for today.

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Speaker 8: Well, Stee, we already saw a tick up in guilt

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Speaker 8: yields and in the pound yesterday off the back of

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Speaker 8: the inflation data. So yes, it returned to the Bank

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Speaker 8: of England's target at the headline level, but at the

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Speaker 8: services level actually it was unexpectedly hot, and that, in

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Speaker 8: addition to the election kind of lets the Bank of

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Speaker 8: England off cutting rates today. But as you say, ever

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Speaker 8: since we've heard about this staff election, there have been

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Speaker 8: no speeches from any of the members of the Monetary

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Speaker 8: Policy Committee, so it would be a surprise if the

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Speaker 8: vote split changes from the last meeting. It was seven

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Speaker 8: to the last time, seven to hold to to cut.

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Speaker 8: Be a surprise if that changes. It would suggest that

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Speaker 8: this meeting in August would be a live one. Now

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Speaker 8: we're not getting a press conference, we're not getting updated forecasts.

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Speaker 8: The guidance as well is expected to say the same

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Speaker 8: because you remember they've already dropped the bias to tightening.

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Speaker 8: Now the expectation is that at some stage, whether or

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Speaker 8: not it's August, because the bets have been paired off

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Speaker 8: the inflation data yesterday, that is coming. The question is.

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Speaker 1: When, Yeah, absolutely, and you're outside the Bank of England

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Speaker 1: all day reporting on what's happening, So very good to

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Speaker 1: think about that. Having said that, the election is becoming

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Speaker 1: somewhat of a full gone conclusion, at least according to

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Speaker 1: the polling, we've had yet another raft of polls talking

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Speaker 1: about the expectations of a Conservative wipeout.

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Speaker 8: Yes, three polls suggesting that the Conservatives are on course

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Speaker 8: for annihilation by the Labor Party. One pole Caroline even

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Speaker 8: suggest that the Prime Minister is going to lose his seat.

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Speaker 8: So you gov expected this to be the biggest defeat

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Speaker 8: in Conservative Party history. And this is a party that

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Speaker 8: remembers style itself as the natural party of government, and

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Speaker 8: because of polls like this, actually you're seeing them leading

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Speaker 8: the narrative rather than the other way round. And so

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Speaker 8: for example, the Defense Minister Grant Shapps switching from talking

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Speaker 8: about winning the election to limiting the defeat. So it's

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Speaker 8: desperate times for the Conservatives at this point, and they're

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Speaker 8: only two weeks to turn the situation around.

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Speaker 2: Okay, Leslie Burden outside the Bank of England covering both

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Speaker 2: the economics and the politics for us this morning. Thank you.

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Speaker 1: Now, some of the biggest names in hedge funds, including

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Speaker 1: Steve Cohen's Point seventy two and Ken Griffin Citadel, are

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Speaker 1: trying to create the next generation of talent through in

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Speaker 1: house training. It aims the term promising young analysts into

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Speaker 1: portfolio managers with the ability to rake in huge amounts

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Speaker 1: of cash. It is a new approach though for the industry,

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Speaker 1: born out of a recruitment crisis, and our senior hedge

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Speaker 1: fund reporter Nishan Kumar joins us now for more. We've

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Speaker 1: been tracking these developments. Why are the hedge funds starting

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Speaker 1: this sort of training now?

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Speaker 9: Good morning, Good morning. It's simply a supply and demand

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Speaker 9: issue like in any other booming industry. You know, hedge

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Speaker 9: funds are all about people, you know, that's their edge.

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Speaker 9: The traditional training ground for forgetting these kind of people

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Speaker 9: used to be the proprietary trading desks at banks. That

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Speaker 9: has been decimated since the financial crisis because of the

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Speaker 9: regulations imposed on banks. At the same time, if you

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Speaker 9: look at the hedge fund industry, they have added three

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Speaker 9: trillion dollars since two thousand and eight. That's an incredible

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Speaker 9: amount of to manage. So they need more and more

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Speaker 9: people to manage that kind of money. So essentially that

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Speaker 9: has sparked a war for talent. The highest bidder in

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Speaker 9: the industry is getting the best talent, and still they

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Speaker 9: can't get enough of them. And therefore, you know, they

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Speaker 9: have to find some other way to keep getting these

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Speaker 9: kind of talents so that their business continues in a

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Speaker 9: way just by paying a star trader more and more money.

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Speaker 9: This model is unsustainable already. Some hedge funds are paying

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Speaker 9: sixty cents of every dollar they make. They are taking

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Speaker 9: that as fees to help pay for these kind of traders.

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Speaker 9: And therefore it's not a choice. You have to kind

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Speaker 9: of do it.

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Speaker 2: How are these training schemes works? What happens for people

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Speaker 2: that get selected to go on them.

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Speaker 9: It's kind of a classroom teaching slash mentoring, learning from

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Speaker 9: the people who have done it over many decades. So

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Speaker 9: it's really you know, a combination of a variety of

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Speaker 9: programs and teaching and you are given some part of

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Speaker 9: money to manage. You learn from the best in the industry.

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Speaker 9: So I mean, nobody will tell you the secret sauce.

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Speaker 9: Everyone has their customized way to groom these talent to

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Speaker 9: the needs that they want. It's almost like, you know,

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Speaker 9: creating a new chef. If you go to a restaurant,

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Speaker 9: like everyone has their own kind of dishes, and they're

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Speaker 9: trying to mold these young minds into the kind of

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Speaker 9: traders that they want.

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Speaker 1: Is it actually working then, what's the evidence that it

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Speaker 1: pays off.

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Speaker 9: It's still early days, but signs are that it's working

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Speaker 9: in some of the cases. So we have cited three

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Speaker 9: big hedge funds in the story. If you look at

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Speaker 9: Citadel Traders, there are you know, getting a head quicker.

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Speaker 9: We have cited Phil Lee, who was elevated from an

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Speaker 9: analyst to the head of one of their largest stocks

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Speaker 9: trading unit in less than a decade. If you look

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Speaker 9: at Steve Cohen's point seventy two, more than half of

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Speaker 9: his stock pickers have come from these programs. At Ballyasni

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Speaker 9: for example. You know, these training programs have created fourteen

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Speaker 9: portfolio managers and they are some of their best performing.

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Speaker 9: So we can't say for sure that it's working, but

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Speaker 9: initial signs are very positive. It's just another and perhaps

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Speaker 9: perhaps a better way, you know, to get talent.

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Speaker 2: What is it all success stories? Are there those that

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Speaker 2: don't make it through these programs? What's it like for

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Speaker 2: the trainees.

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Speaker 9: Well, even to get into this training program is nothing

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Speaker 9: short of him possible. So the success rate is just

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Speaker 9: point five percent of the applications that hedge ones receive. Wow,

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Speaker 9: that's significantly lower than getting into MIIT or Harvard. So

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Speaker 9: the success rate a MIIT is like four percent and

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Speaker 9: same almost same for Harvard. So you need to be

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Speaker 9: really incredibly talented and lati and all. You know, all

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Speaker 9: the stars should be aligned for you to get into

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Speaker 9: this point five percent.

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Speaker 1: Well, don't say to us that we don't give you

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Speaker 1: inspiration or a part of leaf over in the morning, Nisha,

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Speaker 1: thank you so much for being with us a really

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Speaker 1: interesting story about the industry. Our senior Hedge Funder reporter,

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Speaker 1: Nishant Kumar.

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