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

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Speaker 2: This is the Bloomberg DAYBAQ podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Monday, the second of

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Speaker 2: June in London. I'm Caroline Hepcare and.

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Speaker 3: I'm Stephen Carroll. Coming up today.

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Speaker 1: Ukraine uses drones hidden in trucks and an audacious strike

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Speaker 1: on russia strategic airfields as the two countries prepare for talks.

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Speaker 2: A nationalist candidate backed by Donald Trump wins Poland's presidential

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Speaker 2: election with just over fifty percent of the vote.

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Speaker 3: Plus no deal.

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Speaker 1: China accuses the US of breaking their recent trade accord

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Speaker 1: and vows retaliation, sending safe haven assets higher.

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

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Speaker 1: Ukraine has used drones hidden in trucks to hit strategic

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Speaker 1: airfields across Russia in a series of dramatic strikes out

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Speaker 1: of peace talks due to take place later today. Keeve's

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Speaker 1: Security Service says more than forty Rush aircraft were damaged,

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Speaker 1: including long range bombers capable of deploying nuclear weapons. Ukraine

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Speaker 1: claims the operation caused lasses totaling at least two billion dollars.

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Speaker 1: Here's Ukraine's president Vladmozlanski, thirty.

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Speaker 4: Four percent of the strategic cruise missile carriers stationed at

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Speaker 4: air bases were hit. Our personnel operated across multiple Russian

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Speaker 4: regions in three different time zones, and the people who

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Speaker 4: assisted us were withdrawn from Russian territory before the operation.

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Speaker 4: They are now safe. It is genuinely satisfying when something

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Speaker 4: I authorized a year and six months ago comes to

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Speaker 4: fruition and deprives Russians of over forty units.

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Speaker 5: Of strategic aviation.

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Speaker 3: We will continue this work.

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Speaker 1: Zelenski's comments came as his country also came under one

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Speaker 1: of the longest barrages from Russian missiles and drones. On Sunday,

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Speaker 1: at least twelve people were killed in a strike on

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Speaker 1: a military training center. The attacks from both sides come

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Speaker 1: as Moscow and Kiev prepared to send delegations to Turkey

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Speaker 1: for a second round of talks today. The opening round

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Speaker 1: last month ended with a prisoner exchange agreement and discussions

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Speaker 1: on a potential ceasefire.

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Speaker 2: The UK plans to build new submarines, munitions factories, and

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Speaker 2: cyber warfare technology to counter the threat posed by Russia.

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Speaker 2: The multi billion pound purchases are part of the government's

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Speaker 2: review of the country's military capabilities. Defense Secretary John Healey

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Speaker 2: says threats are increasing.

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Speaker 6: The country's armed forces are only as strong as the

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Speaker 6: industry that stands behind them. The investment is not just

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Speaker 6: about filling warehouses with fresh missiles. It's about making sure

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Speaker 6: that in Britain we have an industrial base that can

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Speaker 6: innovate and that can scale up its production if we're

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Speaker 6: faced with conflict in the future.

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Speaker 2: Defense Secretary John Healey there, who is speaking ahead of

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Speaker 2: the official launch of the Strategic Defense Review. The UK

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Speaker 2: Army is its smallest size since the Napoleonic era due

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Speaker 2: to chronic under investments.

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Speaker 1: A nationalist's candidate backed by Donald Trump has won Poland's

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Speaker 1: presidential election. Karol Nevrotsky defeated the centrist mayor of Warsaw

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Speaker 1: and a blow to the country's pro EU government. According

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Speaker 1: to Bloomberg News calculations, the conservative historian and former boxer

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Speaker 1: won fifty point nine percent of the vote, while his opponent,

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Speaker 1: Rafa Traskowski took forty nine point one percent. While Poland's

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Speaker 1: Prime Minister Donald Tusk holds political power, the president can

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Speaker 1: veto legislation nominate the Central Bank Governor and serves as

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Speaker 1: Commander in chief of the Armed Forces.

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Speaker 2: Six people have been injured in an attack on an

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Speaker 2: event for Israeli hostages in Colorado. Police and FBI officials

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Speaker 2: say that the suspect was heard to shout Free Palestine

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Speaker 2: and threw an incendiary device into the crowd during the attack.

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Speaker 2: In the town of Boulder, local police chief Stephen Redfern

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Speaker 2: says that the neighborhood will stand strong.

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Speaker 7: Older is not immune to tragedy sadly, and I know

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Speaker 7: a lot of people are scared right now. A lot

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Speaker 7: of people are upset and questioning how this happened and why.

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Speaker 7: All I know is Boulder has recovered before from acts

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Speaker 7: of violence and we will again.

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Speaker 2: Boulder's police chief Stephen redferns speaking their authorities have confirmed

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Speaker 2: a forty five year old man has been arrested.

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Speaker 1: Trade tensions between the US and China are ratteting up.

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Speaker 1: China has accused the US of violating a recent trade

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Speaker 1: deal between the two countries. The Chinese Ministry of Commerce

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Speaker 1: rejected President Trump's claim that Beijing breached the agreement in

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Speaker 1: a statement issued on Monday. Beijing accuses the US of

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Speaker 1: discriminatory restrictions, including new AI chip export controls and their

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Speaker 1: avocation of Chinese student visas. Speaking on Friday, Donald Trump

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Speaker 1: told reporters he hopes talks will continue soon.

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Speaker 3: And I was very nice to then.

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Speaker 6: I help them because they were in trouble with the

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Speaker 6: style budge a massive amount of business.

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Speaker 3: But I'm sure that I'll speak to President she and

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Speaker 3: hopefully we'll work that out.

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Speaker 8: But yeah, that's there's a violation of the.

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Speaker 1: Agreement, President Donald Trump speaking there. Following the news, Agent

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Speaker 1: shares dropped, along with US stock index futures, a gauge

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Speaker 1: of Chinese stocks traded in Hong Kong, fell as much

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Speaker 1: as two point nine percent, the most nearly two months.

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Speaker 2: Morgan Stanley is forecasting a nine percent drop in the

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Speaker 2: US and Dollar index in the next twelve months. The

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Speaker 2: bank joins the course of voices questioning the outlook for

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Speaker 2: the currency as fears overgrowth and trade grow. The Dollar

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Speaker 2: index has already dropped nearly ten percent from its peak

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Speaker 2: in February. The scrutiny of American assets comes alongside worries

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Speaker 2: over fiscal discipline. Treasury Secretary Scott Bessent was asked if

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Speaker 2: the US Treasury could run out of cash as the

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Speaker 2: deadline for increasing the federal debt ceiling gets closer.

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Speaker 5: The United States of America is never going to default.

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Speaker 5: That is never going to happen. That we are on

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Speaker 5: the warning track and we will never hit.

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Speaker 2: The wall, try sectary Scott Bessett, speaking to CBS's Face

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Speaker 2: the Nation yesterday. Republican congressional leaders have attached an increase

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Speaker 2: in the debtlimit to President Trump's tax and spending bill

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Speaker 2: that potentially puts avoiding a default at the mercy of

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Speaker 2: negotiations over the bill.

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Speaker 1: At least ten percent of the UK's wealthy, non arme

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Speaker 1: population is estimated to have left the country. That's according

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Speaker 1: to a new report from former Treasury economist, which estimates

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Speaker 1: that twenty six thousand non doms left last year.

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Speaker 3: Bloomberg James Wilcock has more.

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Speaker 8: The report from economist Charles Walker used his migration and

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Speaker 8: tax data to say the number of ultra wealthy taxpayers

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Speaker 8: leaving the UK surge last year. But the main question

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Speaker 8: for the government is if the figures are right, is

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Speaker 8: this potential exodus going to become a fiscal problem. A

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Speaker 8: separate recent report said the Treasury would start to lose

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Speaker 8: money if twenty five percent of this wealthy non don

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Speaker 8: population were to leave. Both papers were commissioned by Andrew Barclay,

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Speaker 8: an entrepreneur and policyfellow at the Center right on wood

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Speaker 8: Thing Tank in London, James Wilcock Bloomberg Radio, and.

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Speaker 2: Those are our top stories for you this morning. Looking

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Speaker 2: at the markets, Asian shares are down, the MSCI Asia

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Speaker 2: Pacific Index dropping by eight tenths of one percent. It

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Speaker 2: had declined as the most in about a month earlier

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Speaker 2: this morning on continued trade tensions. US stop futures are

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Speaker 2: also down this morning, both of the NAZAC and the

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Speaker 2: S and P five hundred. You've also got the Bloomberg

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Speaker 2: Dollar Spot Index down a tenth of one percent. Macroeconomic

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Speaker 2: headwinds for the dollar. Oil prices are up after OPEC

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Speaker 2: plus agreed to lift output two point three almost two

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Speaker 2: point four percent high. Now for breakthrough futures. You remember

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Speaker 2: had President Trump talking about doubling tariffs and steel and

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Speaker 2: aluminium imports over the weekend. Got lots of key data

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Speaker 2: this week ism and manufacturing, to the jobs out on

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Speaker 2: Friday and the ECB rate decision on Thursday. Teny Treasury

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Speaker 2: yields this morning up one and a half basis points

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Speaker 2: at four forty two.

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Speaker 5: But it's going to be a busy week, Stephen certainly is.

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Speaker 1: In a moment, we'll bring you more on Ukraine's attack

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Speaker 1: on Russia's long range bomber fleet, plus why China is

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Speaker 1: accusing the US of violating their recent trade deal.

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Speaker 3: But another story that we've.

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Speaker 1: Been reading as well today and listening to, I should say,

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Speaker 1: the latest weekend interview for Michelle hasain with Succession creator

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Speaker 1: Jesse Armstrong about his new film looking at the tech industry.

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Speaker 1: Unsurprisingly what ripe ground given the character is involved in

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Speaker 1: the tech industry in the real life. To try and

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Speaker 1: create a satirical drama in the style of Succession film

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Speaker 1: called Mountainhead.

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Speaker 2: Apparently it's going to it's sort of funnier, it's darker humor.

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Speaker 2: But yes, it's much faster because it's not going to

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Speaker 2: have the multiple sort of seasons that Succession had. But

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Speaker 2: it is such an interesting interview with Jesse Armstrong and

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Speaker 2: our own Michelle has sayed, But she asked them some

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Speaker 2: really interesting questions about how close to real life is

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Speaker 2: this whole who.

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Speaker 1: Inspire Twitch character clearly, but also really interesting to see

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Speaker 1: his comments about the British film industry and this as well,

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Speaker 1: talking about saying that he worries about with so many

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Speaker 1: big name creations coming out of the US, the future

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Speaker 1: of British drama and the important of the BBC and

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Speaker 1: that as well. So, I mean a really interesting conversation.

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Speaker 1: You can hear the podcast and read the interview on

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Speaker 1: our website. We'll put a link in our show notes.

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Speaker 7: Now.

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Speaker 2: Ukrainian and Russian officials are due to hold a second

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Speaker 2: round of talks later today, which could pave the way

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Speaker 2: for a potential CEASEPAR, but it comes after a series

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Speaker 2: of major attacks on both sides this weekend. Our EMEA

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Speaker 2: news director Ross and Matheson joins us now for more

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Speaker 2: on this Good morning, oz. Let's start with the Ukrainian

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Speaker 2: attacks on Russian airfields all over Russia as far away

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Speaker 2: as Siberia. What do we know about what was damaged

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Speaker 2: and how significant those attacks are given this three year war.

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Speaker 9: Well, what we've heard from Ukraine is that there was

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Speaker 9: significant damage to a number of airplanes, including long range

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Speaker 9: bombers that are designed to carry both conventional but also

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Speaker 9: nuclear weapons. And as you say, the real thing here

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Speaker 9: is that they hit so deep inside Russia. It seems

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Speaker 9: like this was an eighteen month planned operation where they

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Speaker 9: managed to get drones inside Russia on trucks and then

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Speaker 9: launched them using wooden based systems. And so this was

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Speaker 9: very audacious really by Ukraine and to show again that

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Speaker 9: anywhere in Russia really is territory that they can reach.

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Speaker 5: Russia's disputing the.

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Speaker 9: Damage claim and saying that they managed to deflect at

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Speaker 9: least some of these drones from some airfields and that

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Speaker 9: the damage to airplanes was minor. Obviously, Ukraine says that

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Speaker 9: it managed to do several billion dollars worth of damage.

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Speaker 9: But either way, again it's more the symbolism of what

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Speaker 9: they've done in hitting so far right the way you say,

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Speaker 9: to eastern Siberia.

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Speaker 1: And at the same time Ukraine came under attack one

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Speaker 1: of the longest barrages that had seen from Russian missiles

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Speaker 1: and drones, air sirens lasting for more than nine hours.

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Speaker 1: I mean, how do all of these escalations set the

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Speaker 1: tone for the talks that are due to take place

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Speaker 1: and it's unbult today.

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Speaker 9: Well, it's interesting to see that at least for now

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Speaker 9: the talks are going ahead given this backdrop, as you say,

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Speaker 9: of mutual attacks across the weekend, But the idea probably

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Speaker 9: is to again demonstrate that even after a number of

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Speaker 9: years of war and with Ukraine obviously struggling for long

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Speaker 9: range missiles and access to certain weapons, is that they

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Speaker 9: can still hurt each other and still hit each other.

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Speaker 10: You know.

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Speaker 9: Ukraine is saying we may not have masses of troops

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Speaker 9: on the ground and curse, but we can still come

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Speaker 9: at you inside Russia, and Russia obviously wanting to send

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Speaker 9: the same message with it strikes on the weekend. So

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Speaker 9: they're coming into these talks both sort of showing you

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Speaker 9: know what, this is what we can do. Does that

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Speaker 9: necessarily lay the groundwork for a conducive station.

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Speaker 5: It's a bit hard to say.

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Speaker 9: I mean, the first rounds of talks that we saw

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Speaker 9: led to some prisoner swaps, which is obviously something, but

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Speaker 9: no real conversation around a ceasefar. Ukraine says that it's

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Speaker 9: yet to receive this apparent memorandum from Russia detailing what

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Speaker 9: its demands would be, so it's very hard to see

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Speaker 9: how these conversations can move forward without that list and

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Speaker 9: Ukraine again saying fundamentally what they really need is the

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Speaker 9: leaders to get together, and so that's the leaders of

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Speaker 9: Ukraine and Russia to be sitting in a room together,

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Speaker 9: because the only person who can really agree to end

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Speaker 9: this wark from the Russia side is Vladimir Putin. So

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Speaker 9: these talks are going ahead, but obviously, you know, we're

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Speaker 9: moving pretty slowly here.

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Speaker 2: Yeah, And I suppose the lasts thought is about how

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Speaker 2: the US is playing into these discussions right now.

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Speaker 9: Well, that's right, and we know that the Secretary of

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Speaker 9: State Marco Rubio spoke with the Russian his Russian counterpart

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Speaker 9: on the weekend, and the message from that seemed to

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Speaker 9: be it's really up to Russia and Ukraine to talk

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Speaker 9: directly and to find solutions here. And the US is

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Speaker 9: obviously still very much in the conversation but not wanting

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Speaker 9: to be the direct mediator. And the frustration that we've

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Speaker 9: seen growing from US President Donald Trump, who had hoped

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Speaker 9: to get a very quick deal here and a quick

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Speaker 9: seasphone that's obviously not happened, has now said, really, it's

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Speaker 9: up to you guys to do so. And so the

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Speaker 9: message from the US is they're obviously on the phone

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Speaker 9: a lot to the Ukrainians are on the phone to

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Speaker 9: the Russians, but they're not wanting to be the ones

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Speaker 9: in the middle of the negotiation, at least for now.

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Speaker 2: And meanwhile, of course everyone around the world is watching

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Speaker 2: the footage because the footage, also the Ukrainian footage unverified

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Speaker 2: of the attack on the air of planes, has got

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Speaker 2: the attention of military surely all over the world because

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Speaker 2: the attacks were on sitting aircraft on the tarmac, a

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Speaker 2: forty Russian aircraft at least according to Ukrainian authority. So

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Speaker 2: I think everyone's going to be looking at that, and.

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Speaker 1: Those are the images that are being played as we're

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Speaker 1: counting down to those talks as well. Ras I just

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Speaker 1: wanted to ask you briefly about the UK as well.

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Speaker 1: Though the government here set to launch its strategic Defense

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Speaker 1: review today. The goal, we're told is to send a

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Speaker 1: message to Moscow. What do we know about what's going

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Speaker 1: to be announced?

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Speaker 5: Well, that's right.

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Speaker 9: I mean a lot of countries the UK is looking

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Speaker 9: around and saying, well, what are the future challenges and

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Speaker 9: threats going to be and how can we prepare for those?

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Speaker 9: You know, we've got conflict, as you say, still in Ukraine,

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Speaker 9: in the Middle East, you got the US making clear

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Speaker 9: that countries in Europe, including the UK, need to become

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Speaker 9: more self reliant and so how do you adapt for that,

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Speaker 9: and how do you make your military more flexible, more

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Speaker 9: nimble even and how do you invest and where do

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Speaker 9: you invest? And so we're expecting announcements confirmation around that

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Speaker 9: in terms of building new munitions factories for example, so

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Speaker 9: building the pipeline in the UK for weaponry, possibly also

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Speaker 9: investing in future attack submarines. I mean those tach decades

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Speaker 9: to build, but you've got to make a decision at

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Speaker 9: some point to invest in them. And also just retention,

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Speaker 9: how do you make the UK military more appealing for

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Speaker 9: people and then how do you keep your top shelf

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Speaker 9: talent when they joined.

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Speaker 5: So a lot in that to come today.

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Speaker 1: Ross all of this is happening at a time we're

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Speaker 1: also elsewhere and you're watching the results out of the

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Speaker 1: Polish presidential election over the weekend as well, the nationalist

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Speaker 1: candidate being coming out on top, beating the centrist mayor

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Speaker 1: of Warsaw. This is continuing a sort of political status

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Speaker 1: that we've seen in Poland, following on from Andros Duda,

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Speaker 1: with you putting Prime Minister of Poland in a difficult

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Speaker 1: situation from here.

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Speaker 5: Well, that's right. The result looks really really tight.

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Speaker 9: I mean, the exit poles were swinging last night between

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Speaker 9: the two of them, and now we see a very

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Speaker 9: very close result. But as you say, the sort of

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Speaker 9: the Antieu candidate in a way in front. It'll be

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Speaker 9: interesting to see if there are any challenges to this

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Speaker 9: result because it is very very close. But as you say,

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Speaker 9: what it shows again is that Polanism is like other

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Speaker 9: countries in Europe, exceptionally polarized. And you've got, you know,

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Speaker 9: those who want to stay very much close to Europe

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Speaker 9: and those who are I guess seeing the appeal in

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Speaker 9: some of the retoric of candidates who've embraced the agenda

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Speaker 9: of those like Donald Trump.

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Speaker 3: Okay, Rasell marsonari Ami, a news director, Thank you.

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Speaker 2: Now, let's turn our attention away from Europe to China,

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Speaker 2: which has accused the US of violating its recent trade

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Speaker 2: deal and has wowed to take measures to defend its

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Speaker 2: own interests. Jenny Marsh leads our team covering economics and

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Speaker 2: government in China and joins us now, Jenny, good morning.

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Speaker 2: What exactly is Beijing said the US is doing the

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Speaker 2: accusation today?

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Speaker 10: So the Ministry of Commerce in Beijing has come out

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Speaker 10: this morning on a public holiday in China basically say,

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Speaker 10: you know, the US insists on sort of continuing to

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Speaker 10: go its own way. They're saying, then it's going to

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Speaker 10: have to sort of respond with forceful measures. So they

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Speaker 10: haven't sort of been specific about what those are, but

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Speaker 10: it's sort of hinting at retaliation. And this comes after

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Speaker 10: last week the sort of this steady trickle of news

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Speaker 10: of extra restrictions that the Trump administration is applying in

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Speaker 10: the tech industry, so sort of throttling access to chip

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Speaker 10: design software that Chinese chip makers use, also curtailing the

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Speaker 10: export of jet engine parts that are crucial to China's

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Speaker 10: ability to develop its own jetliner industry. And that came

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Speaker 10: as well after sort of the global bound we saw

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Speaker 10: right after the Geneva Geneva agreement on the Huawei chips,

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Speaker 10: trying to ban use of them anywhere in the world.

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Speaker 10: So the Chinese are basically saying, you're violating the consensus

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Speaker 10: not only of the Geneva agreement but of this The

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Speaker 10: last call that was had between Trump and she which

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Speaker 10: was on January seventeenth, before Trump came into office, formally,

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Speaker 10: and I think the context there is, you know, over

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Speaker 10: the weekend, Trump has been saying, you know, he needs

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Speaker 10: to have a call with President She to sort things out,

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Speaker 10: and they're kind of saying, now, well, you know, Trump

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Speaker 10: isn't even sticking to what was agreed the last time

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Speaker 10: the two leaders spoke. So the influence there kind of is,

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Speaker 10: you know, it's very doubtful that she's going to get

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Speaker 10: on the phone with Trump in this kind of climate.

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Speaker 1: Jenny, we had seen this big turnaround in sentiment, as

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Speaker 1: you mentioned, after the Geneva agreement. Again, how far does

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Speaker 1: this set us back in terms of the relations between

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Speaker 1: the US and China.

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Speaker 10: I think this is a good reality check because you're

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Speaker 10: completely right. There was so much optimism after that Geneva agreement,

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Speaker 10: which kind of brought the tariffs down from one hundred

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Speaker 10: and forty five percent all the way down to thirty

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Speaker 10: for China, you know, and so that was a great

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Speaker 10: win in terms of the tariff pause, but it didn't

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Speaker 10: really sort of fundamentally change anything about the US China relationship.

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Speaker 10: It wasn't really a deal that they worked out in Geneva.

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Speaker 10: They just agreed to sort of hit the brakes and

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Speaker 10: pause things, and all of the things that sort of

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Speaker 10: the fundamentally sort of difficult issues that underpin this relationship,

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Speaker 10: they still remain there. So the US still wants to

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Speaker 10: block China's access to high tech chips because the US

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Speaker 10: wants to be the world's tech superpower. China still wants

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Speaker 10: to you know, develop Huawei into a company that can

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Speaker 10: rival and video, and it's going to use its the

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Speaker 10: leverage it has, which is you know, rare earths, these

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Speaker 10: very sort of niche metals that are crucial to everything

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Speaker 10: from sort of nuclear reactor rods to jet planes. And

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Speaker 10: so it's becoming this interesting battle where the fight isn't

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Speaker 10: really over the tariffs anymore, you know, the terariff fight.

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Speaker 10: We've sort of seen that play out. But now the

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Speaker 10: real sort of leverage in the negations to come is

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Speaker 10: going to be around the chip curbs and there export controls,

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Speaker 10: and it's interesting to see who actually has the most

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Speaker 10: leverage on that.

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