1 00:00:00,120 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:10,119 --> 00:00:12,920 Speaker 2: This is the Bloomberg Day Bag You podcast, available every 3 00:00:12,960 --> 00:00:15,800 Speaker 2: morning on Apple, Spotify or whatever you listen. It's Monday, 4 00:00:15,800 --> 00:00:18,600 Speaker 2: the twelfth of May in London. I'm Caroline Hepcare. 5 00:00:18,320 --> 00:00:21,400 Speaker 1: And I'm Stephen Carroll. Coming up today. Stock Markets gain 6 00:00:21,520 --> 00:00:25,320 Speaker 1: after Washington and Beijing offer positive signals on their weekend 7 00:00:25,440 --> 00:00:28,040 Speaker 1: trade talks, with more details expected today. 8 00:00:28,280 --> 00:00:31,880 Speaker 2: The UK's labor government moves to reign in migration amid 9 00:00:31,920 --> 00:00:33,599 Speaker 2: growing support for reform. 10 00:00:33,800 --> 00:00:37,640 Speaker 1: UK Plus, It's just the beginning. Traders bet the euros 11 00:00:37,680 --> 00:00:40,200 Speaker 1: ascent is a title wave in the making. 12 00:00:40,400 --> 00:00:42,560 Speaker 2: Let's start with a roundup of our top stories. 13 00:00:43,159 --> 00:00:45,960 Speaker 1: Stock Markets are rising after the US and China announced 14 00:00:45,960 --> 00:00:48,320 Speaker 1: they had made headway in two days of trade talks 15 00:00:48,320 --> 00:00:51,960 Speaker 1: in Switzerland. While neither scient disclosed specifics, both agreed to 16 00:00:52,040 --> 00:00:55,880 Speaker 1: establish a new framework for negotiations, led by US Treasury 17 00:00:55,920 --> 00:00:59,840 Speaker 1: Secretary Scott Bessant and Chinese Vice Premier Rli Feng. Speaking 18 00:01:00,040 --> 00:01:03,440 Speaker 1: after Sunday's talks, Besant struck an optimistic tone. 19 00:01:03,840 --> 00:01:07,119 Speaker 3: I'm happy to report that we made substantial progress when 20 00:01:07,160 --> 00:01:11,679 Speaker 3: the United States and China in the very important trade talks. First, 21 00:01:11,800 --> 00:01:14,800 Speaker 3: I want to thank our Swiss host. The Swiss government 22 00:01:14,880 --> 00:01:19,680 Speaker 3: has been very kind in providing us this wonderful venue, 23 00:01:19,840 --> 00:01:21,800 Speaker 3: and I think that led to a great deal of 24 00:01:21,800 --> 00:01:26,560 Speaker 3: the productivity we've seen. We will be giving details tomorrow, 25 00:01:26,760 --> 00:01:29,800 Speaker 3: but I can tell you that the talks were productive. 26 00:01:30,600 --> 00:01:34,480 Speaker 1: Besan says. The US plans to share more details today, 27 00:01:34,600 --> 00:01:38,119 Speaker 1: while Holle Feng promised a joint statement. It comes after 28 00:01:38,200 --> 00:01:41,959 Speaker 1: President Trump increased tariffs on Chinese imports to one hundred 29 00:01:41,959 --> 00:01:45,520 Speaker 1: and forty five percent and China responded with tariff's on 30 00:01:45,680 --> 00:01:48,240 Speaker 1: US goods of one hundred and twenty five percent. 31 00:01:48,920 --> 00:01:51,800 Speaker 2: The UK will make it harder for migrants to stay 32 00:01:51,840 --> 00:01:54,680 Speaker 2: in the country in the latest attempt to shrink Britain's 33 00:01:54,680 --> 00:01:58,120 Speaker 2: record levels of net migration, The Labor government plans to 34 00:01:58,240 --> 00:02:02,640 Speaker 2: change visa rules, toughenugh English language tests and titan rules 35 00:02:02,680 --> 00:02:07,520 Speaker 2: on overseas recruitment. Home Secretary Ivett Cooper says it'll help 36 00:02:07,640 --> 00:02:09,040 Speaker 2: to bring the numbers down. 37 00:02:09,919 --> 00:02:10,720 Speaker 1: Those changes. 38 00:02:10,760 --> 00:02:14,600 Speaker 4: The combination of just those low skilled visa changes and 39 00:02:14,680 --> 00:02:17,760 Speaker 4: also the care worker change is together. That is a 40 00:02:17,840 --> 00:02:20,560 Speaker 4: reduction of probably in the region of up to fifty 41 00:02:20,600 --> 00:02:24,600 Speaker 4: thousand low skilled worker visas, a reduction in the course 42 00:02:24,639 --> 00:02:25,840 Speaker 4: of this year alone. 43 00:02:25,880 --> 00:02:29,040 Speaker 2: The Home Secretary's new policy comes after years of debate 44 00:02:29,080 --> 00:02:32,400 Speaker 2: around Britain's high migration levels. Support for the government has 45 00:02:32,440 --> 00:02:35,760 Speaker 2: fallen into a five year low in opinion polls. Yugov's 46 00:02:35,840 --> 00:02:38,600 Speaker 2: latest poll has the party at twenty two percent and 47 00:02:38,639 --> 00:02:42,120 Speaker 2: the anti immigration Reform UK Party taking the lead with 48 00:02:42,360 --> 00:02:43,640 Speaker 2: twenty nine percent. 49 00:02:44,200 --> 00:02:47,640 Speaker 1: Vladimir Lanski says he will be waiting for Vladimir Putin 50 00:02:47,680 --> 00:02:50,840 Speaker 1: in Turkey on Thursday. The leaders of Russia and Ukraine 51 00:02:50,840 --> 00:02:53,360 Speaker 1: are being pushed to begin piece talks by the United 52 00:02:53,360 --> 00:02:56,960 Speaker 1: States and europe. Ukraine's president says Kiev is ready to 53 00:02:57,160 --> 00:03:00,920 Speaker 1: end this war. Your nasivial Kremiam in Ukraine. 54 00:03:01,000 --> 00:03:05,120 Speaker 5: WI absolutely no problem engaging in negotiations. We're ready for 55 00:03:05,240 --> 00:03:08,520 Speaker 5: any format. I will be in Turkey this Thursday, the fifteenth, 56 00:03:08,560 --> 00:03:11,480 Speaker 5: I may. I expect Britain to come to Turkey as well. 57 00:03:12,800 --> 00:03:15,880 Speaker 1: So Lensky's planned trip comes after US President Donald Trump 58 00:03:15,919 --> 00:03:19,600 Speaker 1: insisted the two leaders meet despite Moscow's reluctance to agree 59 00:03:19,639 --> 00:03:22,799 Speaker 1: to a thirty day ceasefire. The UK and other European 60 00:03:22,800 --> 00:03:26,280 Speaker 1: countries say they're reading a dramatic increase in sanctions on 61 00:03:26,360 --> 00:03:30,359 Speaker 1: Russia should not engage with negotiations. 62 00:03:30,000 --> 00:03:33,640 Speaker 2: A ceasfar has been agreed between India and Pakistan after 63 00:03:33,680 --> 00:03:36,040 Speaker 2: some of the worst fighting in more than half a century. 64 00:03:36,200 --> 00:03:39,280 Speaker 2: US person Donald Trump is reported to have angered key 65 00:03:39,480 --> 00:03:43,520 Speaker 2: Indian officials on Saturday by announcing the agreement on truth 66 00:03:43,560 --> 00:03:46,760 Speaker 2: social before they could The way the seas far unfolded 67 00:03:46,880 --> 00:03:50,080 Speaker 2: may have helped set the stage for even more intense 68 00:03:50,200 --> 00:03:53,360 Speaker 2: fighting down the road in Pakistan. News of the seaspar 69 00:03:53,760 --> 00:03:57,600 Speaker 2: was met with fireworks and celebrations. The head of India's 70 00:03:57,600 --> 00:04:02,200 Speaker 2: Foreign Ministry, Victram Misseryday's statement over the weekend. 71 00:04:02,440 --> 00:04:07,640 Speaker 6: It was agreed between them that both sides would stop 72 00:04:08,240 --> 00:04:12,520 Speaker 6: all fighting and military action on land and in the 73 00:04:12,560 --> 00:04:17,039 Speaker 6: air and see instructions have been given on both sides 74 00:04:17,320 --> 00:04:21,359 Speaker 6: to give effect to this understanding. The Director's General of 75 00:04:21,400 --> 00:04:25,360 Speaker 6: Military Operations will talk again on the twelfth of May 76 00:04:25,600 --> 00:04:26,600 Speaker 6: at twelve hundred dollars. 77 00:04:27,279 --> 00:04:31,080 Speaker 2: That was India's Foreign Secretary vic from Mystery, speaking there 78 00:04:31,080 --> 00:04:34,360 Speaker 2: as both sides have reported drone attacks on their borders 79 00:04:34,360 --> 00:04:37,920 Speaker 2: with Kashmir just hours after the announcement was made. 80 00:04:38,200 --> 00:04:40,600 Speaker 1: The US and Iran have agreed to continue talks about 81 00:04:40,600 --> 00:04:44,360 Speaker 1: the Islamic Republic's nuclear program. The news comes after discussions 82 00:04:44,400 --> 00:04:47,760 Speaker 1: over the weekend were described as encouraging by Washington and 83 00:04:47,960 --> 00:04:52,400 Speaker 1: useful by Tehran. However, India's excuse me, However, Iran's foreign 84 00:04:52,400 --> 00:04:56,160 Speaker 1: minister reiterated that Iran's ability to enrich uranium, a key 85 00:04:56,200 --> 00:05:00,960 Speaker 1: sticking point in negotiations, isn't up for discussion. Man's foreign minister, 86 00:05:01,000 --> 00:05:04,440 Speaker 1: who'd mediated the talks, says a fifth round of deliberations 87 00:05:04,480 --> 00:05:08,880 Speaker 1: will take place after the delegations consult with their respective leaderships. 88 00:05:09,320 --> 00:05:11,960 Speaker 2: President Trump is heading to the Middle East today, aiming 89 00:05:12,040 --> 00:05:15,680 Speaker 2: to tap into billions of dollars in potential investment. The 90 00:05:15,760 --> 00:05:19,000 Speaker 2: visit to Saudi Arabia, the United Arab Emirates, and Cutter 91 00:05:19,320 --> 00:05:23,000 Speaker 2: comes as ABC News has reported that the Trump administration 92 00:05:23,240 --> 00:05:27,039 Speaker 2: is set to accept a luxury Boeing jet from Cuttar's 93 00:05:27,120 --> 00:05:30,080 Speaker 2: royal family. Reports suggests that the aircraft may be the 94 00:05:30,080 --> 00:05:34,080 Speaker 2: most valuable gift ever received from a foreign government in 95 00:05:34,120 --> 00:05:37,520 Speaker 2: the US. Speaking on truth Social President Trump suggested the 96 00:05:37,680 --> 00:05:40,520 Speaker 2: seven four seven jet would be a gift quote to 97 00:05:40,560 --> 00:05:44,760 Speaker 2: replace the forty year old Air Force one temporarily after 98 00:05:44,839 --> 00:05:49,120 Speaker 2: delays prevented Boeing delivering two new versions that were ordered 99 00:05:49,240 --> 00:05:51,480 Speaker 2: during President Trump's first term. 100 00:05:51,720 --> 00:05:55,680 Speaker 1: Pharmaceutical stocks have dropped after President Trump announced plans to 101 00:05:55,720 --> 00:06:00,000 Speaker 1: sign an executive order later aimed at significantly reducing US 102 00:06:00,000 --> 00:06:03,440 Speaker 1: description drug prices with more here's Bloomberg's team, we're out 103 00:06:03,440 --> 00:06:03,720 Speaker 1: of bio. 104 00:06:03,920 --> 00:06:07,120 Speaker 7: While the details remain unclear, the President claims the order 105 00:06:07,160 --> 00:06:10,320 Speaker 7: will require that Americans pay no more than the lowest 106 00:06:10,320 --> 00:06:13,440 Speaker 7: price charge for the same medication in any other country. 107 00:06:13,920 --> 00:06:16,719 Speaker 7: In a post on truth Social Trump said the move 108 00:06:16,800 --> 00:06:20,000 Speaker 7: could lower US drug prices buy as much as eighty percent. 109 00:06:20,680 --> 00:06:23,800 Speaker 7: Americans currently pay the highest prices in the world for 110 00:06:23,839 --> 00:06:28,920 Speaker 7: prescription medications. However, drug makers argue that such reforms would 111 00:06:29,000 --> 00:06:32,839 Speaker 7: cut into their revenues and undermine the development of breakthrough 112 00:06:32,880 --> 00:06:36,440 Speaker 7: therapies that could extend and improve lives. In London, Tea, 113 00:06:36,440 --> 00:06:38,040 Speaker 7: we're at a bio Bloomberg Radio. 114 00:06:38,440 --> 00:06:40,760 Speaker 2: Let's look at the markets then after our top stories. 115 00:06:41,080 --> 00:06:44,919 Speaker 2: Asian stocks rising on this trade war de escalation. We 116 00:06:45,000 --> 00:06:48,400 Speaker 2: await a further news, of course today, but at the moment, 117 00:06:48,520 --> 00:06:51,279 Speaker 2: S and P five hundred Emuni futures are after a 118 00:06:51,279 --> 00:06:53,880 Speaker 2: flying startup by one point five percent, nows that future 119 00:06:53,920 --> 00:06:56,599 Speaker 2: is off almost two percent this morning. US city futures 120 00:06:56,680 --> 00:06:58,800 Speaker 2: also up eight tenths of one percent. Germany set to 121 00:06:58,920 --> 00:07:02,120 Speaker 2: dex At INDEXCS at a record high on Friday, recovering 122 00:07:02,160 --> 00:07:05,080 Speaker 2: after a major slump in March. The dollar is also 123 00:07:05,160 --> 00:07:09,320 Speaker 2: strengthening against traditional haven so the BlueBag Dollar Spot index 124 00:07:09,400 --> 00:07:11,000 Speaker 2: up a tenth of one percent, and you've got global 125 00:07:11,040 --> 00:07:14,000 Speaker 2: bonds in retreat. Ten year US yields up a couple 126 00:07:14,040 --> 00:07:16,680 Speaker 2: of basis points. Gold is also tumbled. We're down one 127 00:07:16,720 --> 00:07:20,560 Speaker 2: point four percent currently. Shares of Asian pharmaceutical companies that 128 00:07:20,560 --> 00:07:24,320 Speaker 2: have fallen on this idea that we'll perhaps see President 129 00:07:24,320 --> 00:07:27,760 Speaker 2: Trunk trying to slash US prescription drug prices and the 130 00:07:27,760 --> 00:07:32,440 Speaker 2: India Pakistan truce sees Pakistani stock surging nine point two percent, 131 00:07:32,440 --> 00:07:34,640 Speaker 2: overall Indians nifty fifty jumping three percent. 132 00:07:35,000 --> 00:07:36,760 Speaker 1: Well, in a moment, we'll bring you more on what 133 00:07:36,800 --> 00:07:39,280 Speaker 1: we learned from those US China trade talks, plus why 134 00:07:39,360 --> 00:07:43,840 Speaker 1: some traders are betting on the euro continuing to strengthens. First, 135 00:07:43,880 --> 00:07:45,640 Speaker 1: a word on another story that caught ery this morning. 136 00:07:45,680 --> 00:07:48,280 Speaker 1: It's that time of year where you're starting to think 137 00:07:48,320 --> 00:07:52,360 Speaker 1: maybe about your summer holidays after some good recent good weather. 138 00:07:52,800 --> 00:07:55,440 Speaker 1: This unfortunately falls into the category of articles that I 139 00:07:55,600 --> 00:07:58,560 Speaker 1: cannot avoid reading. And then feeling bad about all of 140 00:07:58,600 --> 00:08:01,320 Speaker 1: my choices when it comes to traveling. This is at 141 00:08:01,400 --> 00:08:04,640 Speaker 1: travel hacks from what Bloomberg Pursuits are dubbing a group 142 00:08:04,680 --> 00:08:06,440 Speaker 1: the distinguished travel hackers. 143 00:08:06,720 --> 00:08:11,000 Speaker 2: Yeah, they're absolutely brilliant. So this is Damon John who's 144 00:08:11,120 --> 00:08:16,160 Speaker 2: one of the Shark Tank judges, and he does I 145 00:08:16,280 --> 00:08:19,000 Speaker 2: just can't believe how many miles he travels. Four hundred 146 00:08:19,080 --> 00:08:21,280 Speaker 2: thousand miles in the air every year, spens so like 147 00:08:21,280 --> 00:08:24,760 Speaker 2: two hundred and fifty days a year traveling. He says, 148 00:08:24,800 --> 00:08:27,840 Speaker 2: you always must carry a salt scarf on flights. I 149 00:08:28,000 --> 00:08:33,040 Speaker 2: totally sympathize double book connections and just stay hungry even 150 00:08:33,040 --> 00:08:34,200 Speaker 2: if you feel jet lagged. 151 00:08:34,800 --> 00:08:37,240 Speaker 1: I agree with that one. That's a step too far 152 00:08:37,320 --> 00:08:40,000 Speaker 1: for me. Silk scarfine, but I have to eat right. 153 00:08:40,080 --> 00:08:42,480 Speaker 1: You could read more on that Bloomberg dot com as 154 00:08:42,480 --> 00:08:44,800 Speaker 1: slash Pursuits. Well, let's bring you more on our top 155 00:08:44,840 --> 00:08:47,760 Speaker 1: stories now. China and the US have both said that 156 00:08:47,800 --> 00:08:51,120 Speaker 1: this weekend's trade talks produced substantial progress. It's the clearest 157 00:08:51,320 --> 00:08:54,280 Speaker 1: sign that further escalations of the trade war may be avoided. 158 00:08:54,600 --> 00:08:57,320 Speaker 1: They've promised more details to come today. Let's bring in 159 00:08:57,400 --> 00:09:00,880 Speaker 1: our Greater China Executive editor John leu More. John, great 160 00:09:00,920 --> 00:09:02,920 Speaker 1: to talk to you. What then, have we learned from 161 00:09:02,960 --> 00:09:05,040 Speaker 1: these two days of meetings and what are we hoping 162 00:09:05,080 --> 00:09:06,360 Speaker 1: for or expecting today? 163 00:09:06,920 --> 00:09:09,320 Speaker 8: Well, what we have so far as rhetoric and the 164 00:09:09,400 --> 00:09:13,120 Speaker 8: rhetoric that we've gotten has been very positive. We have 165 00:09:13,200 --> 00:09:18,199 Speaker 8: Secretary Scott Besson saying progress was made. We had Chinese 166 00:09:18,280 --> 00:09:23,400 Speaker 8: Vice Premieer Holy fun actually complementing the American delegation, and 167 00:09:23,440 --> 00:09:28,040 Speaker 8: so everything seems to be pointing to de escalation, seems 168 00:09:28,040 --> 00:09:32,160 Speaker 8: to be pointing to talks aimed at trying to resolve 169 00:09:32,240 --> 00:09:35,680 Speaker 8: this trade war that we have on our hands, and 170 00:09:35,720 --> 00:09:37,000 Speaker 8: we're just waiting for the details. 171 00:09:37,000 --> 00:09:37,240 Speaker 6: Now. 172 00:09:37,679 --> 00:09:40,160 Speaker 2: Okay, how much are the markets they taken away from this? 173 00:09:40,800 --> 00:09:44,720 Speaker 8: It's obviously risk one. Today. US stocks are up, Chinese 174 00:09:44,760 --> 00:09:47,520 Speaker 8: stocks are up, They're down a bit from their session highs. 175 00:09:47,640 --> 00:09:51,320 Speaker 8: Gold is down. So I think people are feeling better 176 00:09:51,360 --> 00:09:54,280 Speaker 8: about the situation, and I would say they see a 177 00:09:54,400 --> 00:09:58,240 Speaker 8: light at the end of this tunnel. A lot depends 178 00:09:58,280 --> 00:10:00,560 Speaker 8: on what will be in the details. We have just 179 00:10:00,600 --> 00:10:06,200 Speaker 8: gone through a month of great volatility in markets. Chinese 180 00:10:06,240 --> 00:10:09,520 Speaker 8: stocks just recouped all of their losses since Liberation Day 181 00:10:09,559 --> 00:10:13,400 Speaker 8: today and so I think everybody is a bit on edge. 182 00:10:13,320 --> 00:10:17,240 Speaker 1: Still, John, tires are already hitting US business is their 183 00:10:17,600 --> 00:10:20,000 Speaker 1: risk of a stagflationary blow to the US. But how 184 00:10:20,080 --> 00:10:22,679 Speaker 1: much is at stake for China's economy and these talks 185 00:10:22,720 --> 00:10:24,160 Speaker 1: as well. 186 00:10:24,480 --> 00:10:27,920 Speaker 8: There's a lot at stake for Chinese companies who export 187 00:10:28,760 --> 00:10:32,120 Speaker 8: well over five hundred billion US dollars to the United States. 188 00:10:32,200 --> 00:10:37,280 Speaker 8: It's a huge market for Chinese goods. If these tariffs 189 00:10:37,320 --> 00:10:39,720 Speaker 8: stay in place, there is not going to be any 190 00:10:39,720 --> 00:10:41,840 Speaker 8: trade between the United States and China, and the threat 191 00:10:41,880 --> 00:10:46,400 Speaker 8: of decoupling, I think would have massive implications, not only 192 00:10:46,440 --> 00:10:48,760 Speaker 8: for China, but for the global economy. And you know, 193 00:10:48,880 --> 00:10:54,280 Speaker 8: the prospect of something less than one hundred percent no trade, 194 00:10:54,679 --> 00:10:57,439 Speaker 8: something less than what we have now, I think is 195 00:10:57,920 --> 00:11:02,280 Speaker 8: very optimistic and is getting people feeling good about the future. 196 00:11:02,720 --> 00:11:05,200 Speaker 8: And it will be good for the Chinese economy. The 197 00:11:05,200 --> 00:11:08,080 Speaker 8: government is introducing lots of stimulus. If it can keep 198 00:11:08,200 --> 00:11:09,920 Speaker 8: some of that trade with the US, that will help 199 00:11:09,960 --> 00:11:10,199 Speaker 8: a lot. 200 00:11:10,800 --> 00:11:14,040 Speaker 2: Okay, very interesting. Thank you so much, John for being 201 00:11:14,040 --> 00:11:17,480 Speaker 2: with us this morning. Biteberg's Greater China executive editor, John 202 00:11:17,559 --> 00:11:18,760 Speaker 2: lu what. 203 00:11:18,840 --> 00:11:22,520 Speaker 1: As President Trump reconfigures global trade, the euro is riding 204 00:11:22,559 --> 00:11:25,679 Speaker 1: its biggest rally in two decades, and traders including A. 205 00:11:25,760 --> 00:11:28,120 Speaker 1: Mondy and Templeton say it's just the beginning. The common 206 00:11:28,120 --> 00:11:30,880 Speaker 1: currency jumped by fourteen percent the three and a half 207 00:11:31,040 --> 00:11:34,200 Speaker 1: year high last month. Joining US Now for more our 208 00:11:34,320 --> 00:11:37,760 Speaker 1: FX and rates reporter Naomi Jiujitsu Naomi Good Mornings. The 209 00:11:37,840 --> 00:11:40,360 Speaker 1: tide could be turning in favor of the euro. What 210 00:11:40,440 --> 00:11:41,040 Speaker 1: does this mean? 211 00:11:41,840 --> 00:11:45,600 Speaker 9: So the euro has been staging a massive comeback after 212 00:11:45,640 --> 00:11:48,680 Speaker 9: it fell close to parody against the dollar earlier this year. 213 00:11:49,360 --> 00:11:51,760 Speaker 9: It's been a really big beneficiary of the seller that 214 00:11:51,800 --> 00:11:54,599 Speaker 9: we've been seeing in the dollar after Trump's terriff announcement 215 00:11:55,120 --> 00:12:00,360 Speaker 9: and investment hases like a Mundy and also Deutsche believe 216 00:12:00,400 --> 00:12:02,920 Speaker 9: that it stands to rise to around one twenty by 217 00:12:02,920 --> 00:12:03,560 Speaker 9: the end of the year. 218 00:12:03,920 --> 00:12:06,559 Speaker 2: So then, I mean, because obviously the trade war is 219 00:12:06,640 --> 00:12:09,040 Speaker 2: ongoing and that is perhaps one of the key drivers. 220 00:12:09,040 --> 00:12:11,679 Speaker 2: But why do you think this is happening now? 221 00:12:12,440 --> 00:12:15,040 Speaker 9: So if we look at what we've the move that 222 00:12:15,080 --> 00:12:18,000 Speaker 9: we've seen in the dollar, that's really key. Like for 223 00:12:18,080 --> 00:12:22,240 Speaker 9: the past fifteen years or so, European investors, they've been 224 00:12:22,280 --> 00:12:25,120 Speaker 9: investing abroad and a lot of this has been going 225 00:12:25,160 --> 00:12:29,719 Speaker 9: into the US, like US stocks and bonds because they 226 00:12:29,760 --> 00:12:32,520 Speaker 9: believe that US growth would outpace the rest of the 227 00:12:32,520 --> 00:12:35,720 Speaker 9: world and that rates in the US would be higher 228 00:12:35,760 --> 00:12:38,719 Speaker 9: than in a lot of other countries. And that's been 229 00:12:38,720 --> 00:12:41,240 Speaker 9: true for years. But over the past few months we've 230 00:12:41,240 --> 00:12:44,839 Speaker 9: seen Trump's policies and they've raised a lot of uncertainties, 231 00:12:44,880 --> 00:12:47,840 Speaker 9: and they've raised a lot of questions about how secure 232 00:12:48,120 --> 00:12:50,800 Speaker 9: US assets are. And this is a really big deal 233 00:12:50,960 --> 00:12:55,840 Speaker 9: because US assets, and especially US treasuries, they're considered to 234 00:12:55,880 --> 00:12:58,840 Speaker 9: be among the safest assets in the world. And this 235 00:12:58,920 --> 00:13:01,400 Speaker 9: is what's triggered aside in the dollar and the end 236 00:13:01,400 --> 00:13:02,760 Speaker 9: the year has benefited from this. 237 00:13:03,200 --> 00:13:04,880 Speaker 1: So where does the euro go from here? 238 00:13:04,920 --> 00:13:05,079 Speaker 3: Then? 239 00:13:05,120 --> 00:13:07,680 Speaker 1: We've seen this strengthening since as you say, that low 240 00:13:07,920 --> 00:13:11,600 Speaker 1: and near parity only a couple of months ago. Since then, 241 00:13:11,600 --> 00:13:14,920 Speaker 1: the trajectory has been largely upward. Does that look likely 242 00:13:14,960 --> 00:13:15,719 Speaker 1: to continue? 243 00:13:16,240 --> 00:13:16,720 Speaker 8: It has? 244 00:13:16,920 --> 00:13:20,640 Speaker 9: Like, yeah, it's been upward. It could continue. It's trading 245 00:13:20,679 --> 00:13:23,360 Speaker 9: around one to twelve at the moment, but a growing 246 00:13:23,440 --> 00:13:26,080 Speaker 9: number of investors and banks believe that it could rise 247 00:13:26,160 --> 00:13:29,720 Speaker 9: more like Deutsche's for example, is forecasting it to rise 248 00:13:29,760 --> 00:13:31,959 Speaker 9: to one twenty by the end of the year, and 249 00:13:32,000 --> 00:13:35,440 Speaker 9: then even more to one thirty by twenty twenty seven, 250 00:13:35,480 --> 00:13:37,559 Speaker 9: and that's a huge jump from where we are now. 251 00:13:38,920 --> 00:13:41,520 Speaker 9: A lot of people believe that this will be moved. 252 00:13:41,840 --> 00:13:47,240 Speaker 9: This will be driven by diversification flows. So that means 253 00:13:47,240 --> 00:13:51,240 Speaker 9: that in the coming years, as European investors, as you 254 00:13:51,360 --> 00:13:54,960 Speaker 9: start to pair back their investments in the US, like 255 00:13:55,120 --> 00:13:57,760 Speaker 9: even just a little bit, like whether it's by shifting 256 00:13:57,840 --> 00:14:03,000 Speaker 9: funds out of the US or decreasing the amount of 257 00:14:03,160 --> 00:14:05,720 Speaker 9: new investments into the US, this could push the Euro 258 00:14:05,760 --> 00:14:06,439 Speaker 9: even higher. 259 00:14:07,520 --> 00:14:11,160 Speaker 2: Yeah, that's very positive, isn't it in terms of how 260 00:14:11,240 --> 00:14:13,880 Speaker 2: the Euro is being seen. What do you think the 261 00:14:14,040 --> 00:14:17,559 Speaker 2: risks are to that sort of very optimistic scenario. 262 00:14:17,880 --> 00:14:20,680 Speaker 9: Okay, So in terms of risks, if we see the 263 00:14:20,920 --> 00:14:25,200 Speaker 9: US significantly dial down its tariffs on Europe and on 264 00:14:25,280 --> 00:14:30,240 Speaker 9: other countries, or if Trump turns down his other aggressive 265 00:14:30,240 --> 00:14:34,400 Speaker 9: policy positions, that could help to encourage the view that, yeah, 266 00:14:34,520 --> 00:14:37,240 Speaker 9: like the US still is a secure place to keep investments. 267 00:14:37,720 --> 00:14:40,880 Speaker 9: And then at the same time, you know, the Euro 268 00:14:40,920 --> 00:14:43,960 Speaker 9: has been benefiting on this view that like Germany and 269 00:14:44,040 --> 00:14:48,120 Speaker 9: other European countries will increase fiscal spending and if they're 270 00:14:48,200 --> 00:14:52,640 Speaker 9: slow to do this and if their economies are slow 271 00:14:52,760 --> 00:14:55,320 Speaker 9: to grow as a result of this, you know, it 272 00:14:55,360 --> 00:14:57,800 Speaker 9: could have a negative impact on the region and this 273 00:14:57,920 --> 00:15:00,840 Speaker 9: could make people think that, like maybe be shifting money 274 00:15:00,840 --> 00:15:02,920 Speaker 9: back to Europe isn't the right thing to do, and 275 00:15:03,000 --> 00:15:04,920 Speaker 9: this could hold the Europe back from gaining further. 276 00:15:07,760 --> 00:15:10,480 Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the 277 00:15:10,560 --> 00:15:13,600 Speaker 1: stories making news from London to Wall Street and beyond. 278 00:15:13,880 --> 00:15:17,840 Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify, 279 00:15:17,960 --> 00:15:19,880 Speaker 2: and anywhere else you get your podcasts. 280 00:15:19,960 --> 00:15:22,960 Speaker 1: You can also listen live each morning on London Dab Radio, 281 00:15:23,000 --> 00:15:25,720 Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. 282 00:15:25,760 --> 00:15:28,520 Speaker 2: Our flagship New York station is also available on your 283 00:15:28,560 --> 00:15:33,280 Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty. 284 00:15:33,520 --> 00:15:34,920 Speaker 2: I'm Caroline Hepka. 285 00:15:34,640 --> 00:15:37,080 Speaker 1: And I'm Stephen Carroll. Join us again tomorrow morning for 286 00:15:37,200 --> 00:15:39,600 Speaker 1: all the news you need to start your day right 287 00:15:39,640 --> 00:15:45,120 Speaker 1: here on Bloomberg Daybreak Europe.