1 00:00:02,440 --> 00:00:05,000 Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the 2 00:00:05,040 --> 00:00:07,080 Speaker 1: top stories in the coming week from our day Break 3 00:00:07,120 --> 00:00:10,400 Speaker 1: anchors all around the world. And straight ahead on the program, 4 00:00:10,440 --> 00:00:13,320 Speaker 1: Wall Street set for another big week of earnings and 5 00:00:13,560 --> 00:00:15,440 Speaker 1: economic reports. I'm Tom Busby. 6 00:00:15,680 --> 00:00:16,680 Speaker 2: I'll have that story. 7 00:00:16,800 --> 00:00:19,360 Speaker 3: I'm Stephen Caroen and London, who we're piecing together the 8 00:00:19,440 --> 00:00:22,720 Speaker 3: clues on when the ECB will cut interest rates ahead 9 00:00:22,720 --> 00:00:24,040 Speaker 3: of its first meeting. 10 00:00:23,800 --> 00:00:26,279 Speaker 2: Of the year. I'm Dog Kristner looking at the risk 11 00:00:26,440 --> 00:00:28,160 Speaker 2: tied to the meeting of the Bank of Japan. 12 00:00:28,360 --> 00:00:30,880 Speaker 4: I'm Kavid Lyons in Washington, looking ahead to the New 13 00:00:30,920 --> 00:00:33,960 Speaker 4: Hampshire primary where Nicky Harley is trying to talk former 14 00:00:34,000 --> 00:00:34,720 Speaker 4: Prestment Trump. 15 00:00:37,159 --> 00:00:41,239 Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend. The business 16 00:00:41,280 --> 00:00:45,240 Speaker 5: news you need to wrap up your week. Available on Apple, Spotify, 17 00:00:45,400 --> 00:00:48,760 Speaker 5: the Bloomberg Business Appen everywhere you get your podcasts. 18 00:00:53,280 --> 00:00:55,120 Speaker 1: Good day to you. I'm Tom Busby, and we begin 19 00:00:55,160 --> 00:00:58,160 Speaker 1: today's program with a focus on earnings. More than seventy 20 00:00:58,240 --> 00:01:01,000 Speaker 1: companies in the S and P five hundred reporting their 21 00:01:01,080 --> 00:01:03,560 Speaker 1: latest results this week, and one of the most highly 22 00:01:03,560 --> 00:01:07,959 Speaker 1: anticipated reports comes on Tuesday from Netflix for a preview 23 00:01:08,040 --> 00:01:11,360 Speaker 1: where pleased to welcome get the Raganathan, us media analyst 24 00:01:11,560 --> 00:01:15,600 Speaker 1: with Bloomberg Intelligence. Well, we know Netflix has really changed 25 00:01:15,640 --> 00:01:18,240 Speaker 1: with the ad supported tier that they added last year 26 00:01:18,319 --> 00:01:21,800 Speaker 1: the crackdown on password sharing. What do you expect to 27 00:01:21,840 --> 00:01:22,760 Speaker 1: see on Tuesday? 28 00:01:23,680 --> 00:01:26,240 Speaker 6: Yeah, So what we've really seen with these two new 29 00:01:26,280 --> 00:01:29,479 Speaker 6: initiatives from Netflix, as you just mentioned, both the ads 30 00:01:29,480 --> 00:01:32,160 Speaker 6: as well as the password crackdown, has been that they've 31 00:01:32,200 --> 00:01:37,360 Speaker 6: finally been able to now reinvigorate subscriber gains. And so 32 00:01:37,400 --> 00:01:40,800 Speaker 6: we saw, of course during the pandemic, we had you know, 33 00:01:40,920 --> 00:01:44,399 Speaker 6: pull growth that was pulled forward, and then we had 34 00:01:44,440 --> 00:01:47,080 Speaker 6: the great Netflix correction with the company kind of losing 35 00:01:47,160 --> 00:01:51,720 Speaker 6: subscribers and now they're back on track. So we actually 36 00:01:51,760 --> 00:01:54,720 Speaker 6: expect them to or they themselves said that they would 37 00:01:55,040 --> 00:01:58,360 Speaker 6: post something like about eight point seven to eight point 38 00:01:58,440 --> 00:02:02,160 Speaker 6: eight million news subscribers in the fourth quarter, that is 39 00:02:02,200 --> 00:02:06,680 Speaker 6: seasonally their strongest quarter. Just from kind of seeing all 40 00:02:07,040 --> 00:02:09,160 Speaker 6: the tracking and the trending out there, we think they 41 00:02:09,160 --> 00:02:12,120 Speaker 6: could easily get to about nine million subscriber gains. So 42 00:02:12,240 --> 00:02:13,840 Speaker 6: that actually if you kind of then look at the 43 00:02:13,840 --> 00:02:17,560 Speaker 6: whole year twenty twenty three for them, they're really back 44 00:02:17,600 --> 00:02:20,160 Speaker 6: to pre pandemic levels. You know, we think they would 45 00:02:20,200 --> 00:02:23,239 Speaker 6: have about twenty five million new subscriber gains in twenty 46 00:02:23,280 --> 00:02:26,160 Speaker 6: twenty three. You compare that to about eight to nine 47 00:02:26,160 --> 00:02:29,360 Speaker 6: million in twenty twenty two, and so it really looks 48 00:02:29,400 --> 00:02:31,400 Speaker 6: like these two initiatives are paying off for them and 49 00:02:31,440 --> 00:02:32,640 Speaker 6: paying off in a very big way. 50 00:02:33,200 --> 00:02:35,840 Speaker 1: And where are these subscribers? How many in the US, 51 00:02:36,000 --> 00:02:37,600 Speaker 1: how many outside the US. 52 00:02:38,120 --> 00:02:41,160 Speaker 6: Yeah, so that's that's a really good question. So obviously 53 00:02:41,200 --> 00:02:43,359 Speaker 6: in the US we think growth had kind of hit 54 00:02:43,400 --> 00:02:45,960 Speaker 6: a wall. I mean, obviously the market was pretty mature, 55 00:02:46,800 --> 00:02:49,280 Speaker 6: but the main problem in the US was one is, 56 00:02:49,280 --> 00:02:51,959 Speaker 6: of course they did not they were not addressing kind 57 00:02:52,040 --> 00:02:56,440 Speaker 6: of the affordability option, which is something that has been 58 00:02:56,480 --> 00:03:00,359 Speaker 6: brought back into focus with the APT year. Of course, 59 00:03:00,400 --> 00:03:04,040 Speaker 6: you had roughly about thirty million free loaders in the 60 00:03:04,160 --> 00:03:07,120 Speaker 6: US market. So, you know, again we think that growth 61 00:03:07,240 --> 00:03:10,280 Speaker 6: is back in the US, but majority of the growth, 62 00:03:10,480 --> 00:03:13,200 Speaker 6: a majority of the subscriber growth is really coming from 63 00:03:13,280 --> 00:03:16,080 Speaker 6: the international market. So if you kind of look at it, 64 00:03:16,160 --> 00:03:19,400 Speaker 6: about eighty to ninety percent of new subscriber growth is 65 00:03:19,440 --> 00:03:21,079 Speaker 6: coming from those overseas markets. 66 00:03:21,240 --> 00:03:24,399 Speaker 1: And are there some countries they still haven't penetrated yet 67 00:03:24,400 --> 00:03:27,160 Speaker 1: where there's a massive amount of potential customers. 68 00:03:27,440 --> 00:03:29,320 Speaker 6: Oh, absolutely, So if you kind of look at the 69 00:03:29,360 --> 00:03:33,520 Speaker 6: Asian region, I mean, this is a region which has massive, massive, 70 00:03:33,600 --> 00:03:37,160 Speaker 6: untapped potential. If you look at Netflix's penetration in the 71 00:03:37,200 --> 00:03:40,440 Speaker 6: Asian market, and this is excluding China, it is roughly 72 00:03:40,480 --> 00:03:43,400 Speaker 6: about nineteen to twenty percent, So they are present right 73 00:03:43,440 --> 00:03:46,120 Speaker 6: now in about twenty percent of all households with a 74 00:03:46,120 --> 00:03:49,360 Speaker 6: broadband connection. In the US that number is close to 75 00:03:49,400 --> 00:03:52,960 Speaker 6: about seventy to eighty percent, So obviously there's huge upside 76 00:03:52,960 --> 00:03:55,840 Speaker 6: for them the Asian market. And then again if you 77 00:03:55,920 --> 00:03:58,520 Speaker 6: kind of look at Europe as well, in a lot 78 00:03:58,560 --> 00:04:01,480 Speaker 6: of the Eastern European country, we see that penetration is 79 00:04:01,480 --> 00:04:04,920 Speaker 6: fairly low, so totally you know, if you look at 80 00:04:04,960 --> 00:04:07,440 Speaker 6: the European region, it's at about thirty thirty five percent. Again, 81 00:04:07,480 --> 00:04:11,120 Speaker 6: we see a lot more penetration upside in Europe as well. 82 00:04:11,440 --> 00:04:14,600 Speaker 1: To that point, when I go to Netflix, I see 83 00:04:14,640 --> 00:04:17,279 Speaker 1: a lot of content coming from India produced in India, 84 00:04:17,320 --> 00:04:21,159 Speaker 1: I see Australia, Europe, so obviously they have they have 85 00:04:21,200 --> 00:04:25,520 Speaker 1: a global outlook. Is this original content a hit? 86 00:04:25,920 --> 00:04:26,120 Speaker 5: You know? 87 00:04:26,400 --> 00:04:29,280 Speaker 1: Is something coming from India coming from Asia, coming from 88 00:04:29,320 --> 00:04:31,719 Speaker 1: Europe in the US and vice versa. 89 00:04:32,440 --> 00:04:35,400 Speaker 6: Yes, it has worked actually really really well for them. 90 00:04:35,480 --> 00:04:37,480 Speaker 6: So one thing is when you have kind of this 91 00:04:37,600 --> 00:04:41,159 Speaker 6: global content production machine, one thing is, of course you're 92 00:04:41,160 --> 00:04:45,159 Speaker 6: able to, you know, appeal to a very vast audience space. 93 00:04:45,279 --> 00:04:48,480 Speaker 6: It does content, you know, believe it or not, local content, 94 00:04:48,520 --> 00:04:50,159 Speaker 6: as long as it's made well and as long as 95 00:04:50,200 --> 00:04:52,839 Speaker 6: it's authentic and has that authentic and genuine feel, it 96 00:04:52,880 --> 00:04:56,880 Speaker 6: travels really well globally. They actually Netflix actually just released 97 00:04:56,920 --> 00:05:00,320 Speaker 6: something called, you know, the Watch Report, And if you 98 00:05:00,400 --> 00:05:01,840 Speaker 6: just kind of take a look at the top one 99 00:05:01,880 --> 00:05:05,560 Speaker 6: hundred titles, thirty of those top one hundred titles are 100 00:05:05,560 --> 00:05:09,560 Speaker 6: actually Korean and Spanish language originals, and these are titles 101 00:05:09,560 --> 00:05:11,800 Speaker 6: that are watched across the world. So that that just 102 00:05:11,839 --> 00:05:14,520 Speaker 6: goes to tell you how well some of these local 103 00:05:14,600 --> 00:05:16,720 Speaker 6: language content titles are performing. 104 00:05:16,960 --> 00:05:20,159 Speaker 1: Our thanks to Geet the raganathin US media analyst with 105 00:05:20,200 --> 00:05:23,159 Speaker 1: Bloomberg Intelligence Now, it's also a busy week on the 106 00:05:23,279 --> 00:05:28,440 Speaker 1: economic calendar. Bloomberg International Economics and Policy correspondent Michael McKee 107 00:05:28,520 --> 00:05:31,520 Speaker 1: joins US Now, and Michael, let's start first with jobs, 108 00:05:31,520 --> 00:05:34,560 Speaker 1: because last week, initial jobless claims fell to the lowest 109 00:05:34,720 --> 00:05:36,680 Speaker 1: level in over a year, down to one hundred and 110 00:05:36,720 --> 00:05:39,719 Speaker 1: eighty seven thousand. What is behind that and as we 111 00:05:39,800 --> 00:05:42,279 Speaker 1: head toward the end of this month, how is January 112 00:05:42,360 --> 00:05:42,880 Speaker 1: shaping up? 113 00:05:43,440 --> 00:05:45,680 Speaker 7: I think what you have to do is ask the 114 00:05:45,760 --> 00:05:50,760 Speaker 7: question about what essentially the direction of jobless claims is 115 00:05:50,800 --> 00:05:53,640 Speaker 7: telling you, because this is still the time of year 116 00:05:53,839 --> 00:05:58,520 Speaker 7: when we see distortions in the jobless claims numbers because 117 00:05:58,560 --> 00:06:03,360 Speaker 7: of hiring in four of the last five years. If 118 00:06:03,400 --> 00:06:07,600 Speaker 7: you leave out the pandemic years when jobless claims were 119 00:06:07,720 --> 00:06:12,120 Speaker 7: sky high, they went down in that week. And it 120 00:06:12,200 --> 00:06:16,599 Speaker 7: may be residual seasonality because of the times when we 121 00:06:16,720 --> 00:06:19,800 Speaker 7: used to hire a lot of people at holidays and 122 00:06:19,839 --> 00:06:21,919 Speaker 7: then let them go in the middle of January. That 123 00:06:22,040 --> 00:06:23,839 Speaker 7: happens a lot less these days, So there may be 124 00:06:23,920 --> 00:06:29,680 Speaker 7: some quirks to this number. That said, when you talk 125 00:06:29,720 --> 00:06:34,960 Speaker 7: about what the direction of it is, it still suggests 126 00:06:34,960 --> 00:06:37,920 Speaker 7: that there's a strong labor market out there. Companies are 127 00:06:37,920 --> 00:06:41,160 Speaker 7: still holding on to employees. And the interesting thing is 128 00:06:41,400 --> 00:06:45,920 Speaker 7: for January jobs that you're asking about, this was the 129 00:06:45,960 --> 00:06:50,279 Speaker 7: survey week for January jobs. The jobless claims numbers for 130 00:06:50,360 --> 00:06:54,200 Speaker 7: this week, so they still suggest we will see reasonable 131 00:06:54,240 --> 00:06:57,000 Speaker 7: strength in hiring in the month of January. 132 00:06:56,839 --> 00:06:59,839 Speaker 1: Strength in jobs, and we know what that means for inflation. 133 00:07:00,120 --> 00:07:02,800 Speaker 1: This coming week we get the Fed's preferred read on 134 00:07:02,920 --> 00:07:05,320 Speaker 1: inflation for last month. What do you know about that? 135 00:07:05,320 --> 00:07:06,159 Speaker 1: What can you tell us? 136 00:07:06,360 --> 00:07:09,200 Speaker 7: The interesting thing there is that people were worried because 137 00:07:09,240 --> 00:07:12,680 Speaker 7: the consumer price Index went up a little bit, and 138 00:07:12,800 --> 00:07:15,240 Speaker 7: that caused people to rethink what the FED might do. 139 00:07:15,600 --> 00:07:19,160 Speaker 7: But the FED does look at the Personal Consumption Index 140 00:07:19,280 --> 00:07:22,320 Speaker 7: and it is expected to show much more of a 141 00:07:22,360 --> 00:07:29,360 Speaker 7: decline than CPI, particularly the core, where there's forecast the 142 00:07:29,760 --> 00:07:32,840 Speaker 7: economist survey by Bloomberg forecast that we could get down 143 00:07:33,280 --> 00:07:37,840 Speaker 7: to less than three percent. The headline is already at 144 00:07:37,840 --> 00:07:40,600 Speaker 7: two point six percent, and if we get down to 145 00:07:40,680 --> 00:07:42,880 Speaker 7: two point nine percent of something like that on the core, 146 00:07:43,000 --> 00:07:45,080 Speaker 7: that would be strong evidence to the Fed that they 147 00:07:45,120 --> 00:07:47,360 Speaker 7: are moving in the right direction. They want to get 148 00:07:47,400 --> 00:07:51,120 Speaker 7: to two, of course, but they have always said we 149 00:07:51,240 --> 00:07:55,600 Speaker 7: need to see inflation moving towards our target before we 150 00:07:55,640 --> 00:07:58,280 Speaker 7: even think about cutting rates. So maybe I'll give them 151 00:07:58,320 --> 00:08:01,160 Speaker 7: a chance to think about cutting rates. We see inflation 152 00:08:01,320 --> 00:08:01,880 Speaker 7: fall like. 153 00:08:01,840 --> 00:08:05,720 Speaker 1: That, and despite stubbornly high inflation, we saw retail sales 154 00:08:05,720 --> 00:08:07,560 Speaker 1: in December, surprise to the upside. 155 00:08:07,840 --> 00:08:10,360 Speaker 7: Yeah, well, the inflation has been going away in a 156 00:08:10,400 --> 00:08:14,000 Speaker 7: lot of the areas that retail sales represent. Goods prices 157 00:08:14,040 --> 00:08:17,960 Speaker 7: have been deflating, and so that helped, I'm sure a 158 00:08:18,000 --> 00:08:22,640 Speaker 7: lot with the holiday shopping experience. Not only did people 159 00:08:22,680 --> 00:08:25,640 Speaker 7: find that things might have been cheaper than they anticipated, 160 00:08:25,640 --> 00:08:29,560 Speaker 7: but the companies were able to lower prices to attract 161 00:08:29,640 --> 00:08:36,600 Speaker 7: customers in without a big penalty. The other aspect of 162 00:08:36,600 --> 00:08:40,560 Speaker 7: the retail number that was good as it has been 163 00:08:40,600 --> 00:08:44,840 Speaker 7: Philastphy months since the decline in gasoline prices. Gasoline prices 164 00:08:44,880 --> 00:08:48,440 Speaker 7: have gone down a lot. Retail sales are measured in dollars, 165 00:08:48,520 --> 00:08:50,800 Speaker 7: so that puts a little bit of weight on the 166 00:08:50,880 --> 00:08:54,120 Speaker 7: overall number, but it means there's more money available to 167 00:08:54,160 --> 00:08:57,040 Speaker 7: go into other categories. And we saw a lot of 168 00:08:57,040 --> 00:08:58,800 Speaker 7: strength in retail sales. 169 00:08:59,520 --> 00:09:02,520 Speaker 1: Strength, retail sales strength and jobs. We got to bump 170 00:09:02,640 --> 00:09:06,600 Speaker 1: up in manufacturing after the UAW strikes ended. All this 171 00:09:07,679 --> 00:09:09,840 Speaker 1: leading to the first read, the initial read on fourth 172 00:09:09,920 --> 00:09:13,800 Speaker 1: quarter GDP and what's your outlook on that it's changing. 173 00:09:15,520 --> 00:09:18,240 Speaker 7: The third quarter was so strong that pretty much there 174 00:09:18,280 --> 00:09:20,560 Speaker 7: was unanimity that the fourth quarter was going to be 175 00:09:20,640 --> 00:09:23,440 Speaker 7: relatively weak, and a lot of people, including a number 176 00:09:23,480 --> 00:09:25,480 Speaker 7: of people at the FED, thought we'd come in to 177 00:09:25,640 --> 00:09:27,680 Speaker 7: the fourth quarter with growth between one and one and 178 00:09:27,679 --> 00:09:33,720 Speaker 7: a half percent, perhaps, and last week's numbers suggest that 179 00:09:33,800 --> 00:09:38,160 Speaker 7: there's more strength in the economy. The Atlanta Fed's GDP 180 00:09:38,280 --> 00:09:40,560 Speaker 7: now number went from one and a half percent to 181 00:09:40,600 --> 00:09:44,000 Speaker 7: two point four percent after those retail sales numbers. So 182 00:09:44,080 --> 00:09:46,920 Speaker 7: if the Atlanta Fed is reasonably accurate, and they get 183 00:09:46,920 --> 00:09:49,440 Speaker 7: more accurate the closer we get to the release of GDP, 184 00:09:50,000 --> 00:09:52,960 Speaker 7: then the fourth quarter is going to look fairly strong, 185 00:09:53,000 --> 00:09:56,040 Speaker 7: and that would set us up for a stronger first quarter, 186 00:09:56,120 --> 00:10:01,080 Speaker 7: and that is upending some of the thinking about how 187 00:10:01,120 --> 00:10:04,280 Speaker 7: the economy is going to develop in the first part 188 00:10:04,320 --> 00:10:06,959 Speaker 7: of the year, and that is maybe pushing back against 189 00:10:06,960 --> 00:10:08,800 Speaker 7: the idea that the FED would be cutting soon. 190 00:10:09,160 --> 00:10:12,120 Speaker 1: And if it's strong in the fourth quarter, what looking 191 00:10:12,160 --> 00:10:14,559 Speaker 1: back to twenty twenty three, what would the whole year 192 00:10:14,640 --> 00:10:15,000 Speaker 1: look like. 193 00:10:15,760 --> 00:10:17,640 Speaker 7: Well, we're looking about three to three and a half 194 00:10:17,640 --> 00:10:19,559 Speaker 7: percent somewhere in that area for the whole year, which 195 00:10:19,559 --> 00:10:22,680 Speaker 7: would be very strong, and it would be it would 196 00:10:22,720 --> 00:10:26,679 Speaker 7: be good good news for the overall economy, good news 197 00:10:26,720 --> 00:10:29,680 Speaker 7: for the FED, suggesting that they were able to raise 198 00:10:29,760 --> 00:10:32,400 Speaker 7: rates as high as they did and not send the 199 00:10:32,440 --> 00:10:36,520 Speaker 7: economy into recession, which may give them hope that they 200 00:10:36,559 --> 00:10:39,720 Speaker 7: can keep rates high enough for long enough to bring 201 00:10:39,800 --> 00:10:43,040 Speaker 7: down inflation to two percent without a recession. 202 00:10:43,120 --> 00:10:46,679 Speaker 1: Well our thanks to Bloomberg International Economics and Policy correspondent 203 00:10:46,840 --> 00:10:49,800 Speaker 1: Michael McKee, and coming up on Bloomberg Daybreak weekend, we 204 00:10:49,880 --> 00:10:53,160 Speaker 1: head overseas and preview a key interest rate meeting from 205 00:10:53,200 --> 00:10:57,000 Speaker 1: the European Central Bank. I'm Tom Busby, and this is Bloomberg. 206 00:11:07,120 --> 00:11:09,720 Speaker 1: This is Bloomberg day Break weekend, our global look ahead 207 00:11:09,720 --> 00:11:11,880 Speaker 1: at the top stories for investors in the coming week. 208 00:11:12,080 --> 00:11:14,679 Speaker 1: I'm Tom Busby in New York. Up later in our 209 00:11:14,720 --> 00:11:18,160 Speaker 1: program a preview of the Bank of Japan's latest policy meeting. 210 00:11:18,280 --> 00:11:21,360 Speaker 1: But before that, the first European Central Bank meeting of 211 00:11:21,400 --> 00:11:24,080 Speaker 1: the year happening in the coming days. Markets will be 212 00:11:24,160 --> 00:11:28,360 Speaker 1: listening closely to President Christine Legard for clues about when 213 00:11:28,480 --> 00:11:32,680 Speaker 1: to expect interest rate cuts, but recent geopolitical uncertainty is 214 00:11:32,720 --> 00:11:36,320 Speaker 1: set to further complicate decision making for more. Let's go 215 00:11:36,360 --> 00:11:39,720 Speaker 1: to London and bring in Bloomberg Daybreak eurobanker Stephen Carroll. 216 00:11:39,880 --> 00:11:42,440 Speaker 3: Tom Inflation in the euro Area ticked up to two 217 00:11:42,440 --> 00:11:45,360 Speaker 3: point nine percent in December, but it's a far cry 218 00:11:45,400 --> 00:11:48,079 Speaker 3: from the nine point two percent reading at the end 219 00:11:48,080 --> 00:11:50,760 Speaker 3: of twenty twenty two. So the focus on this week's 220 00:11:50,800 --> 00:11:54,640 Speaker 3: European Center Bank meeting well yet again beyond when interest 221 00:11:54,720 --> 00:11:56,920 Speaker 3: rate cuts might come. It comes at a time when 222 00:11:56,920 --> 00:11:59,920 Speaker 3: the worlds of monetary policy and geopolitics seem more in 223 00:12:00,280 --> 00:12:04,160 Speaker 3: linked than ever. In recent days, Christine Legard described the 224 00:12:04,200 --> 00:12:07,719 Speaker 3: prospect of another Donald Trump presidency in the US as 225 00:12:07,760 --> 00:12:10,480 Speaker 3: a threat to European interests. It's a topic that came 226 00:12:10,559 --> 00:12:12,960 Speaker 3: up again when the ECB presidents spoke to Bloomberg's Francine 227 00:12:13,000 --> 00:12:15,520 Speaker 3: Laqua and Davos. They also talked about the path they 228 00:12:15,520 --> 00:12:17,760 Speaker 3: had for interest rates. Here's what she had to say. 229 00:12:18,040 --> 00:12:21,040 Speaker 8: We have to stay restrictive for as long as necessary 230 00:12:21,040 --> 00:12:23,320 Speaker 8: to make sure that we get to that state where 231 00:12:23,480 --> 00:12:25,960 Speaker 8: we are all saying, okay, confident that it is at 232 00:12:26,000 --> 00:12:28,640 Speaker 8: two percent medium term. I know some people argue that 233 00:12:28,720 --> 00:12:32,240 Speaker 8: maybe we are overshooting, maybe we're taking risks. I think 234 00:12:32,280 --> 00:12:36,280 Speaker 8: the risk would be worse if we went too fast 235 00:12:36,880 --> 00:12:39,520 Speaker 8: and had to come back to more tightening, because we 236 00:12:39,520 --> 00:12:42,760 Speaker 8: would have wasted all the efforts that everybody has put 237 00:12:42,800 --> 00:12:44,280 Speaker 8: in the last fifteen months. 238 00:12:44,520 --> 00:12:47,480 Speaker 9: But this would be again economically or also the trust 239 00:12:47,480 --> 00:12:50,000 Speaker 9: in central banks. If you get this wrong, does it 240 00:12:50,080 --> 00:12:51,040 Speaker 9: hurt the credibility. 241 00:12:51,120 --> 00:12:52,280 Speaker 10: Credibility matters. 242 00:12:52,440 --> 00:12:54,560 Speaker 8: Let's face it, when we say we will get to 243 00:12:54,600 --> 00:12:57,600 Speaker 8: two percent medium term and this will happen in the 244 00:12:57,600 --> 00:12:58,960 Speaker 8: medium term as we define it. 245 00:13:00,480 --> 00:13:01,920 Speaker 10: If people believe in that, then. 246 00:13:01,840 --> 00:13:04,760 Speaker 8: They should because we will do it. 247 00:13:04,760 --> 00:13:05,360 Speaker 10: It matters. 248 00:13:05,400 --> 00:13:08,800 Speaker 8: It is a component in the sort of chemistry that 249 00:13:09,240 --> 00:13:10,800 Speaker 8: determines inflation going forward. 250 00:13:11,080 --> 00:13:13,160 Speaker 9: And again, so the time is quite fluid, but there 251 00:13:13,200 --> 00:13:16,080 Speaker 9: seems to be a majority on the Governing Council that 252 00:13:16,440 --> 00:13:19,240 Speaker 9: expected probably by the summer, if not in the summer. 253 00:13:20,520 --> 00:13:22,640 Speaker 8: You know, and you've talked to some of them, they 254 00:13:22,679 --> 00:13:25,400 Speaker 8: have spoken recently, and each of them has their view, 255 00:13:26,480 --> 00:13:32,720 Speaker 8: which I respect completely. We generally coalesce towards the decisions 256 00:13:32,720 --> 00:13:35,280 Speaker 8: that we make on the basis of data. Some of 257 00:13:35,280 --> 00:13:38,560 Speaker 8: them have their local domestic data, They have their respective 258 00:13:38,600 --> 00:13:40,960 Speaker 8: inflation rates which are different from one country to the 259 00:13:41,000 --> 00:13:44,199 Speaker 8: other in the Euro Area, where if you look at Portugal, 260 00:13:44,280 --> 00:13:46,360 Speaker 8: if you look at Germany, it's going to be different, obviously, 261 00:13:47,200 --> 00:13:49,880 Speaker 8: but it's and it's their job to say, well, it's 262 00:13:50,040 --> 00:13:53,280 Speaker 8: likely that I would say it's likely too, but I 263 00:13:53,360 --> 00:13:57,080 Speaker 8: have to be reserved because we are also saying that 264 00:13:57,120 --> 00:13:59,400 Speaker 8: we are data dependent and that there is still a 265 00:13:59,520 --> 00:14:02,800 Speaker 8: level of a certainty and some indicators that are not 266 00:14:03,080 --> 00:14:05,559 Speaker 8: anchored at the level where we would like. 267 00:14:05,520 --> 00:14:06,200 Speaker 10: To see them. 268 00:14:06,480 --> 00:14:09,560 Speaker 8: And don't forget that services, for instance, is still cruising 269 00:14:09,600 --> 00:14:13,000 Speaker 8: at four percent inflation. Services is the most sort of 270 00:14:13,080 --> 00:14:15,960 Speaker 8: labor intensive sector of the economy, and it's one that 271 00:14:16,000 --> 00:14:20,280 Speaker 8: we have to bring down towards two percent. The US election, Yeah, 272 00:14:20,520 --> 00:14:24,960 Speaker 8: let me have some coffee. 273 00:14:26,240 --> 00:14:27,680 Speaker 10: How arid are you about the US election. 274 00:14:29,600 --> 00:14:31,840 Speaker 8: It's for the American people to decide what they want 275 00:14:33,200 --> 00:14:36,120 Speaker 8: with their politics, with their government, with their future. 276 00:14:36,680 --> 00:14:38,240 Speaker 10: But obviously we are. 277 00:14:38,120 --> 00:14:41,280 Speaker 8: All concerned about it because the United States is the 278 00:14:41,360 --> 00:14:45,440 Speaker 8: largest economy, the largest defense country in the world, and 279 00:14:45,720 --> 00:14:50,160 Speaker 8: has been a beacon of democracy with all its upside 280 00:14:50,160 --> 00:14:54,280 Speaker 8: and downside. But this is what they should be considering, 281 00:14:54,360 --> 00:14:57,760 Speaker 8: and of course we cannot interfere with their choice. It's 282 00:14:57,880 --> 00:15:00,840 Speaker 8: their choice and that's the beauty of democracy. But we 283 00:15:00,920 --> 00:15:04,040 Speaker 8: have to be extremely attentive and anticipate, just as we 284 00:15:04,080 --> 00:15:04,760 Speaker 8: do with inflation. 285 00:15:04,920 --> 00:15:08,520 Speaker 10: You know, we do scenarios. What if, what if? Then? 286 00:15:08,560 --> 00:15:09,640 Speaker 10: What do we do. So. 287 00:15:09,680 --> 00:15:12,480 Speaker 3: That was the ECB president Christine Lagard, speaking to Bloomberg's 288 00:15:12,480 --> 00:15:15,000 Speaker 3: Francine Laqua in Davos. Well, as we look ahead to 289 00:15:15,040 --> 00:15:18,240 Speaker 3: this week's Governing Council meeting, let's bring in our ECB 290 00:15:18,440 --> 00:15:21,160 Speaker 3: reporter Yanaranda, who's in Frankfurt, Yana. Great to have you 291 00:15:21,240 --> 00:15:24,200 Speaker 3: with us. Can we start with the inflation backdrop, if 292 00:15:24,200 --> 00:15:26,280 Speaker 3: we bring things right back down to the mechanics of 293 00:15:26,320 --> 00:15:29,120 Speaker 3: all of this. The number for December did tick up 294 00:15:29,160 --> 00:15:32,280 Speaker 3: slightly for the Eurozone, but does that really change the 295 00:15:32,320 --> 00:15:35,280 Speaker 3: overall picture that's facing policymakers when they get together. 296 00:15:36,520 --> 00:15:40,640 Speaker 11: It doesn't really. The pickup was really widely expected. It 297 00:15:40,720 --> 00:15:43,880 Speaker 11: comes down to a large extent to energy aid and 298 00:15:43,920 --> 00:15:49,080 Speaker 11: how that you know, plays out in the statistics in Germany. 299 00:15:49,440 --> 00:15:53,280 Speaker 11: So the pickup in December itself, it doesn't change the 300 00:15:53,320 --> 00:15:56,360 Speaker 11: inflation outlook one bit. What's true is that price pressures 301 00:15:56,360 --> 00:15:59,480 Speaker 11: in the Eurozone have come down, and also have come 302 00:15:59,520 --> 00:16:02,920 Speaker 11: down a bit faster than most people had expected. So 303 00:16:02,960 --> 00:16:06,480 Speaker 11: the latest projections the ECB put out in December, they 304 00:16:06,560 --> 00:16:09,320 Speaker 11: see headline inflation back at two percent in the third 305 00:16:09,440 --> 00:16:12,760 Speaker 11: quarter of next year, that is, in the third quarter 306 00:16:12,760 --> 00:16:14,880 Speaker 11: of twenty twenty five core a bit later than that, 307 00:16:15,720 --> 00:16:18,720 Speaker 11: but of course that is far far far ahead in 308 00:16:18,720 --> 00:16:20,640 Speaker 11: the future if you're a central banker. And that's also 309 00:16:20,720 --> 00:16:24,640 Speaker 11: one reason why policymakers say they cannot declare victory over 310 00:16:24,680 --> 00:16:27,120 Speaker 11: inflation just yet. And of course the UK is a 311 00:16:27,120 --> 00:16:30,400 Speaker 11: good example that there can be set backs, that there 312 00:16:30,440 --> 00:16:34,440 Speaker 11: can be yeah, that things can go wrong, and of 313 00:16:34,440 --> 00:16:36,640 Speaker 11: course the risks are plentiful. 314 00:16:36,600 --> 00:16:39,400 Speaker 3: Yeah, true, and the risks those inflation trajectory very much 315 00:16:39,440 --> 00:16:41,240 Speaker 3: in focus. We heard a little bit of what Christine 316 00:16:41,280 --> 00:16:44,160 Speaker 3: Leguard had to say about that in Davos as well. 317 00:16:44,240 --> 00:16:47,880 Speaker 3: She's pointing to likely interest rate cuts by the summer. Now, 318 00:16:47,880 --> 00:16:49,960 Speaker 3: we heard from a lot of ECB policy makers in 319 00:16:50,000 --> 00:16:52,440 Speaker 3: the past few days in Davos as well. What else 320 00:16:52,480 --> 00:16:55,280 Speaker 3: have we been hearing in terms of this when question 321 00:16:55,480 --> 00:16:58,760 Speaker 3: when interest rate cuts might come, Well. 322 00:16:59,240 --> 00:17:02,400 Speaker 11: They seem to coalesce around a red cut in the summer, 323 00:17:02,920 --> 00:17:06,119 Speaker 11: but they haven't committed to a specific month month. Also, 324 00:17:06,960 --> 00:17:08,960 Speaker 11: you know, you wouldn't really expect them to at this 325 00:17:09,080 --> 00:17:12,160 Speaker 11: point in time. What we heard was already a bit 326 00:17:12,160 --> 00:17:14,359 Speaker 11: more outspoken than I would have expected them to be, 327 00:17:14,400 --> 00:17:19,120 Speaker 11: to be perfectly honest, simply because the ECB always insists 328 00:17:19,160 --> 00:17:22,199 Speaker 11: it's not in the business of offering forward guidance, and 329 00:17:22,240 --> 00:17:25,159 Speaker 11: they have an explanation which you know, I cannot repeat 330 00:17:25,160 --> 00:17:27,680 Speaker 11: because you know it escapes me all the time, why 331 00:17:27,760 --> 00:17:31,320 Speaker 11: what they're doing is not forward guidance. But that said, 332 00:17:31,440 --> 00:17:35,639 Speaker 11: you know, June is, given everything we heard, a pretty 333 00:17:35,640 --> 00:17:39,159 Speaker 11: good month to focus on, just because it is the 334 00:17:39,200 --> 00:17:42,600 Speaker 11: start of summer, but also because the ECB will have 335 00:17:42,720 --> 00:17:47,920 Speaker 11: updated economic projections available at that time that that will 336 00:17:47,960 --> 00:17:52,720 Speaker 11: just simply show how inflation and economic growth will develop. 337 00:17:53,240 --> 00:17:54,879 Speaker 3: Yeah, I think that the June and July meeting is 338 00:17:54,960 --> 00:17:56,640 Speaker 3: very much in focus because of course there's that big 339 00:17:56,680 --> 00:17:58,639 Speaker 3: break between the meeting at the end of July and 340 00:17:58,680 --> 00:18:01,200 Speaker 3: the next one in mid September. That's been a part 341 00:18:01,240 --> 00:18:03,240 Speaker 3: of the thought process, and people have been thinking about 342 00:18:03,280 --> 00:18:06,480 Speaker 3: what defines the exact dates of summer as well, which 343 00:18:06,480 --> 00:18:09,840 Speaker 3: is the key to this conversation too. There does seem 344 00:18:09,880 --> 00:18:12,240 Speaker 3: to be that sort of discrepancy between some of the 345 00:18:12,240 --> 00:18:14,600 Speaker 3: speakers that we've heard from in the past few days, 346 00:18:14,640 --> 00:18:17,720 Speaker 3: Jokim Nagel talking about him being open to rate cuts 347 00:18:17,720 --> 00:18:20,040 Speaker 3: this summer, but Robert Holtzman saying that they may not 348 00:18:20,080 --> 00:18:23,440 Speaker 3: even be coming this year at all. When we think 349 00:18:23,440 --> 00:18:27,440 Speaker 3: about the conversations and the perhaps arguments that happen within 350 00:18:27,520 --> 00:18:30,399 Speaker 3: that governing council room as well, what sort of split 351 00:18:30,480 --> 00:18:33,200 Speaker 3: and opinions are there at the moment among policymakers. 352 00:18:33,760 --> 00:18:36,639 Speaker 11: Yeah, I mean, for the most part, people seem to 353 00:18:36,680 --> 00:18:40,960 Speaker 11: say summer is a good moment when we should really 354 00:18:41,040 --> 00:18:43,720 Speaker 11: have that discussion and when we should really have that debate, 355 00:18:43,760 --> 00:18:48,560 Speaker 11: because don't forget that everybody who spoke so far in 356 00:18:48,600 --> 00:18:51,680 Speaker 11: the past couple of days essentially said it's too soon 357 00:18:51,720 --> 00:18:56,040 Speaker 11: to have that discussion now. But there were a few outliers, 358 00:18:56,040 --> 00:18:59,199 Speaker 11: You're right. One that stood out was Robert Holtzmann from 359 00:18:59,240 --> 00:19:02,920 Speaker 11: Austria who basically said, don't count on raid cuts at 360 00:19:02,920 --> 00:19:06,080 Speaker 11: all this year because we don't know what wages will 361 00:19:06,080 --> 00:19:09,320 Speaker 11: be doing, we don't know what geopolitics will be doing. 362 00:19:09,359 --> 00:19:14,240 Speaker 11: So he's concerned about energy prices, about supply chain disruptions 363 00:19:14,320 --> 00:19:17,600 Speaker 11: once again because of conflicts in the Middle East, and 364 00:19:18,760 --> 00:19:21,199 Speaker 11: you know, attacks on chips in the Red Sea, and 365 00:19:21,240 --> 00:19:27,119 Speaker 11: of course that you know, those concerns happen or you know, 366 00:19:27,160 --> 00:19:30,520 Speaker 11: you find them with every policy maker, of course, but 367 00:19:30,560 --> 00:19:34,160 Speaker 11: by the way you weigh them that differs. 368 00:19:33,960 --> 00:19:35,880 Speaker 3: And yeah, It's that sort of detail that we love 369 00:19:35,920 --> 00:19:37,639 Speaker 3: to get from you ahead of these sorts of events. 370 00:19:37,720 --> 00:19:41,000 Speaker 3: Our ECB reporter Jana Randau, thank you very much. I'm 371 00:19:41,040 --> 00:19:43,480 Speaker 3: Stephen Caroll in London. You can catch us every weekday 372 00:19:43,480 --> 00:19:46,160 Speaker 3: morning here for Bloomberg Daybreak. You're beginning at six am 373 00:19:46,240 --> 00:19:48,520 Speaker 3: in London and one am on Wall Street. 374 00:19:48,800 --> 00:19:52,320 Speaker 1: Tom our thanks to Bloomberg day Break Europe. Banker Stephen Carroll, 375 00:19:52,520 --> 00:19:54,800 Speaker 1: and coming up on Bloomberg day Break weekend, we head 376 00:19:54,840 --> 00:19:58,320 Speaker 1: to Asia and preview another policy meeting, this one from 377 00:19:58,320 --> 00:20:02,159 Speaker 1: the Bank of Japan' Tom Busby, And this is Bloomberg. 378 00:20:12,520 --> 00:20:14,520 Speaker 1: I'm Tom Busby in New York with your global look 379 00:20:14,520 --> 00:20:17,560 Speaker 1: ahead at the top stories for investors in the coming week. Now, 380 00:20:17,600 --> 00:20:20,159 Speaker 1: sometime in the next few months, Japan Central Bank is 381 00:20:20,200 --> 00:20:24,760 Speaker 1: expected to end the world's last negative interest rate for markets. 382 00:20:25,240 --> 00:20:27,760 Speaker 1: The question is whether the BOJ might hint at the 383 00:20:28,000 --> 00:20:30,960 Speaker 1: timing of that. On Tuesday, when officials wrap up a 384 00:20:30,960 --> 00:20:34,200 Speaker 1: two day policy meeting, Bloomberg's Doug Krisner, co host of 385 00:20:34,280 --> 00:20:36,800 Speaker 1: Daybreak Asia, takes a closer look Tom. 386 00:20:36,840 --> 00:20:40,320 Speaker 2: The BOJ has kept short term interest rates anchored near 387 00:20:40,440 --> 00:20:43,879 Speaker 2: zero for the past three decades, but now after thirty 388 00:20:43,920 --> 00:20:47,800 Speaker 2: plus years of humdrum predictability, things may be about to change. 389 00:20:48,080 --> 00:20:51,159 Speaker 2: The Japanese bond market, the world's third largest, is sensing 390 00:20:51,200 --> 00:20:54,040 Speaker 2: a shift in policy. We've got the benchmark nie K 391 00:20:54,080 --> 00:20:57,439 Speaker 2: two twenty five stock index trading right around a thirty 392 00:20:57,520 --> 00:21:01,159 Speaker 2: four year high, and brokerages across Tokyo are staffing up, 393 00:21:01,200 --> 00:21:04,480 Speaker 2: often seeking out older traders who remember when Japan had 394 00:21:05,000 --> 00:21:09,159 Speaker 2: positive interest rates. The question have markets become overly optimistic 395 00:21:09,200 --> 00:21:13,120 Speaker 2: about imminent tightening? We're joined now by Bloomberg's Paul Jackson, 396 00:21:13,200 --> 00:21:16,400 Speaker 2: our economy editor in Tokyo. Paul, thanks for being with us. 397 00:21:16,600 --> 00:21:19,360 Speaker 2: So let me ask you that question. Our market's too 398 00:21:19,400 --> 00:21:23,520 Speaker 2: optimistic about an immediate turn from the boj Well. 399 00:21:23,320 --> 00:21:26,840 Speaker 12: I think markets are right to be presuming that a 400 00:21:27,160 --> 00:21:31,560 Speaker 12: rate hike is in the pipeline early this year. It's 401 00:21:31,640 --> 00:21:35,240 Speaker 12: the timing that's the critical question. I think at next 402 00:21:35,240 --> 00:21:39,399 Speaker 12: week's meeting it's going to be too early to go. 403 00:21:39,520 --> 00:21:39,720 Speaker 5: Yet. 404 00:21:39,800 --> 00:21:43,399 Speaker 12: We've had a bad start to the year. Outside the markets. 405 00:21:43,920 --> 00:21:48,280 Speaker 12: We had this major earthquake in northwestern Japan, over two 406 00:21:48,359 --> 00:21:53,440 Speaker 12: hundred people dead and still thousands in evacuation centers, followed 407 00:21:53,440 --> 00:21:59,960 Speaker 12: by the plane disaster at Hanada Airport, So I think 408 00:22:00,119 --> 00:22:05,240 Speaker 12: under these circumstances, BOJ would not be wanting to raise 409 00:22:05,280 --> 00:22:08,280 Speaker 12: interest rates in a way that's going to affect a 410 00:22:08,400 --> 00:22:12,320 Speaker 12: why much wider range of people than kind of tweaks 411 00:22:12,359 --> 00:22:17,400 Speaker 12: to its yield curve control or something that affects fewer people. 412 00:22:18,119 --> 00:22:21,040 Speaker 12: So really, I think from this meeting, what we're looking 413 00:22:21,119 --> 00:22:26,120 Speaker 12: for is signals from Governor Uwaida about when he's going 414 00:22:26,200 --> 00:22:27,480 Speaker 12: to pull the trigger. 415 00:22:28,560 --> 00:22:31,520 Speaker 2: So we know that Japanese economy has been dealing with 416 00:22:31,600 --> 00:22:33,840 Speaker 2: inflation for about a year and a half that's been 417 00:22:33,880 --> 00:22:37,639 Speaker 2: above the boj's two percent target. I'm wondering whether we 418 00:22:37,760 --> 00:22:42,119 Speaker 2: need to distinguish between the effects of cost push inflation 419 00:22:42,680 --> 00:22:46,600 Speaker 2: versus demand Paul, is that an important distinction for the BOJ. 420 00:22:46,960 --> 00:22:49,920 Speaker 12: I think that's a very important distinction for the BOJ, 421 00:22:50,040 --> 00:22:51,800 Speaker 12: and I think you've hit the nail on the head. 422 00:22:51,880 --> 00:22:55,800 Speaker 12: That is what they're waiting for. They're waiting for the 423 00:22:55,880 --> 00:22:59,920 Speaker 12: cost push elements of inflation to cool down, and they 424 00:23:00,119 --> 00:23:04,600 Speaker 12: want to see evidence that there is a demand pull inflation, 425 00:23:04,800 --> 00:23:08,480 Speaker 12: something that will make this inflation last. Remember, Japan's been 426 00:23:08,640 --> 00:23:13,520 Speaker 12: looking for good inflation for decades now, and what it's 427 00:23:14,200 --> 00:23:19,399 Speaker 12: keying in on is a positive growth cycle that sees 428 00:23:19,560 --> 00:23:24,440 Speaker 12: wages helping to drive prices, because if wages are going 429 00:23:24,520 --> 00:23:28,320 Speaker 12: up as well as prices, then consumption can also increase. 430 00:23:28,720 --> 00:23:31,440 Speaker 12: If wages aren't going up and you've got inflation, then 431 00:23:31,440 --> 00:23:33,639 Speaker 12: you've got bad inflation and you've got a problem for 432 00:23:33,680 --> 00:23:34,280 Speaker 12: the economy. 433 00:23:34,320 --> 00:23:37,439 Speaker 2: Well, I'm glad you touched on wages there, because I 434 00:23:37,600 --> 00:23:40,399 Speaker 2: think the BOJ would be a little encouraged by what 435 00:23:40,480 --> 00:23:43,919 Speaker 2: appears to be a stronger annual wage negotiation result. Do 436 00:23:44,000 --> 00:23:47,119 Speaker 2: you think that's a market positive if you're making the 437 00:23:47,160 --> 00:23:51,639 Speaker 2: bet that the pivot is sometime maybe if it's not 438 00:23:51,880 --> 00:23:54,680 Speaker 2: this month, it's in the month of April, and it's 439 00:23:54,720 --> 00:23:58,879 Speaker 2: due largely because we're seeing movement in terms of wage increases. 440 00:23:59,520 --> 00:24:02,399 Speaker 12: Yeah, I think we've got some good anecdotal evidence of 441 00:24:02,480 --> 00:24:05,399 Speaker 12: wage increases. We've got Eon with a seven percent gain 442 00:24:05,480 --> 00:24:09,359 Speaker 12: for part timers, Namura offering sixteen percent for younger employees, 443 00:24:09,840 --> 00:24:13,880 Speaker 12: a Tokyo Electron a forty percent for starters at the company. 444 00:24:14,160 --> 00:24:17,080 Speaker 12: These are big figures, but these are also big companies. 445 00:24:17,359 --> 00:24:19,720 Speaker 12: What the BOJ wants to see is there a wider 446 00:24:19,840 --> 00:24:25,800 Speaker 12: range of companies pushing up wages too, especially smaller companies. Now, 447 00:24:25,840 --> 00:24:31,160 Speaker 12: there's an annual spring negotiation between companies and unions and 448 00:24:31,680 --> 00:24:34,359 Speaker 12: this is known as the Shunto, and the result is 449 00:24:34,440 --> 00:24:38,359 Speaker 12: due on March fifteenth. The initial result of these annual 450 00:24:38,400 --> 00:24:43,800 Speaker 12: wage negotiations, and some former BOJ executives are expecting the 451 00:24:43,800 --> 00:24:46,040 Speaker 12: figure to be as high as four percent this year 452 00:24:46,080 --> 00:24:49,520 Speaker 12: compared with three point five eight percent last year. And 453 00:24:49,560 --> 00:24:51,840 Speaker 12: if we have that kind of figure that I think 454 00:24:51,880 --> 00:24:54,840 Speaker 12: the BOJ is going to be in a position to move. 455 00:24:55,560 --> 00:24:58,520 Speaker 12: So then the question is would they move in March 456 00:24:59,080 --> 00:25:02,200 Speaker 12: or in a April. I think the result comes out 457 00:25:02,320 --> 00:25:05,000 Speaker 12: just a couple of days before the March meeting, so 458 00:25:05,040 --> 00:25:07,359 Speaker 12: it's maybe a little bit tight on the time. I 459 00:25:07,400 --> 00:25:10,080 Speaker 12: think the Bank of Japan will want to assess the 460 00:25:10,119 --> 00:25:15,760 Speaker 12: information and any updates showing gains for smaller companies and 461 00:25:15,960 --> 00:25:18,840 Speaker 12: make the decision in April, which is the start of 462 00:25:19,080 --> 00:25:22,880 Speaker 12: a new financial year. They'll also have new price forecasts. 463 00:25:23,080 --> 00:25:24,680 Speaker 12: The timing looks good for them. 464 00:25:25,080 --> 00:25:27,560 Speaker 2: So I'm wondering what the first step would be other 465 00:25:27,640 --> 00:25:31,720 Speaker 2: than preparing the market rhetorically and giving ample warning of 466 00:25:31,800 --> 00:25:35,520 Speaker 2: a move. I'm wondering whether or not it's yield curve 467 00:25:35,640 --> 00:25:39,680 Speaker 2: control again and a modest adjustment and leaving the negative 468 00:25:39,760 --> 00:25:42,960 Speaker 2: rate intact for a while longer, or maybe as early 469 00:25:43,000 --> 00:25:46,920 Speaker 2: as April. We're dealing with the removal of the negative rate. 470 00:25:46,960 --> 00:25:49,440 Speaker 2: Which do you think it is well. 471 00:25:49,520 --> 00:25:54,920 Speaker 12: I think this is another key question. I think there's 472 00:25:55,400 --> 00:25:58,000 Speaker 12: a lot of thought. They're trying to do everything at 473 00:25:58,040 --> 00:26:01,919 Speaker 12: the same time. I think this meeting in January, what 474 00:26:01,920 --> 00:26:05,040 Speaker 12: we're looking for is kind of verbal signaling from the 475 00:26:05,080 --> 00:26:07,960 Speaker 12: governor that we're getting closer to the target, not a 476 00:26:08,000 --> 00:26:10,600 Speaker 12: little bit closer, but closer to the target. I think 477 00:26:10,600 --> 00:26:14,400 Speaker 12: that would be a key steer. When we get to April, 478 00:26:15,000 --> 00:26:18,480 Speaker 12: would they get rid of all these yield curve control 479 00:26:21,080 --> 00:26:24,720 Speaker 12: this yield curve control formulation. Then there's a good chance 480 00:26:24,760 --> 00:26:27,159 Speaker 12: of that, But I think the main focus really is 481 00:26:27,200 --> 00:26:30,320 Speaker 12: on the negative rate, and I think that's likely to 482 00:26:30,359 --> 00:26:33,879 Speaker 12: go zero in April. And there is an argument that 483 00:26:33,920 --> 00:26:36,680 Speaker 12: the boj might want to wait to see those wage 484 00:26:36,720 --> 00:26:41,320 Speaker 12: increases feed in to an optick into inflation and then 485 00:26:41,359 --> 00:26:44,000 Speaker 12: make the decision in July. But don't forget, we've got 486 00:26:44,040 --> 00:26:49,000 Speaker 12: the FED, the ECB, you know, considering possible rate cuts. 487 00:26:49,680 --> 00:26:52,040 Speaker 12: I think the effect on markets would be larger if 488 00:26:52,080 --> 00:26:54,720 Speaker 12: they wait until then. So again it's another sign that 489 00:26:54,800 --> 00:26:56,280 Speaker 12: April maybe is the month. 490 00:26:56,400 --> 00:26:58,679 Speaker 2: Well, I'm glad you brought up that point, because one 491 00:26:58,720 --> 00:27:00,879 Speaker 2: of the things I think markets have been struggling with 492 00:27:00,920 --> 00:27:04,360 Speaker 2: globally right now is perhaps the idea that maybe they 493 00:27:04,359 --> 00:27:07,879 Speaker 2: were a little too optimistic that the FED was going 494 00:27:07,920 --> 00:27:10,600 Speaker 2: to be aggressive in cutting rates. So we've had the 495 00:27:10,640 --> 00:27:13,000 Speaker 2: market kind of dialing back a bit from that notion, 496 00:27:13,160 --> 00:27:15,879 Speaker 2: and as a result, it's engendered a little bit of 497 00:27:15,880 --> 00:27:17,800 Speaker 2: strength here for the dollar. In the flip side of 498 00:27:17,840 --> 00:27:22,600 Speaker 2: that has created a tremendous weakness in the Japanese How 499 00:27:22,680 --> 00:27:27,280 Speaker 2: do you think that yen weakness will impact the boj's thinking. 500 00:27:27,480 --> 00:27:30,200 Speaker 12: Well, I think it needs to get a little bit weaker. Yet, 501 00:27:30,560 --> 00:27:34,120 Speaker 12: if you remember, in the latter part of last year, 502 00:27:34,640 --> 00:27:38,960 Speaker 12: we're getting very close to levels over one fifty to 503 00:27:39,480 --> 00:27:42,640 Speaker 12: close to one five to two, and I think that's 504 00:27:42,680 --> 00:27:44,720 Speaker 12: the kind of level we need to get to again 505 00:27:45,359 --> 00:27:50,439 Speaker 12: before the BOJ starts worrying about the yen levels. So 506 00:27:50,840 --> 00:27:53,520 Speaker 12: I think at the moment that isn't going to be 507 00:27:54,080 --> 00:27:57,760 Speaker 12: a key consideration, but if it continues in that direction, 508 00:27:58,480 --> 00:28:00,679 Speaker 12: sure that will become part of the calculus. 509 00:28:00,800 --> 00:28:03,600 Speaker 2: So you're in Tokyo I'm curious. We had the Tokyo 510 00:28:03,680 --> 00:28:07,720 Speaker 2: CPI reading a little while back. What is life like 511 00:28:07,760 --> 00:28:10,399 Speaker 2: in Tokyo right now? As consumers kind of moved through 512 00:28:10,840 --> 00:28:14,719 Speaker 2: the economy, are they concerned about inflation? Is it registering 513 00:28:14,840 --> 00:28:16,399 Speaker 2: high in people's minds? 514 00:28:17,080 --> 00:28:20,200 Speaker 12: Yes, it certainly is. I mean it's a novel concept 515 00:28:20,280 --> 00:28:25,840 Speaker 12: for many people who've never seen price rises like this before. 516 00:28:26,600 --> 00:28:31,919 Speaker 12: There's a lot of confusion about it, bewilderment, surprise, and 517 00:28:32,000 --> 00:28:34,520 Speaker 12: so I think in terms of the expectations of Hey, 518 00:28:35,000 --> 00:28:37,520 Speaker 12: I want my job. I don't want to be risking 519 00:28:37,560 --> 00:28:39,880 Speaker 12: a job, so I don't mind having not much of 520 00:28:39,920 --> 00:28:42,680 Speaker 12: a pay raise too. No, no, no, I want my 521 00:28:42,760 --> 00:28:45,480 Speaker 12: job and I want a decent pay raise this year. 522 00:28:45,640 --> 00:28:47,560 Speaker 2: We'll have to see what happens this week when the 523 00:28:47,560 --> 00:28:50,240 Speaker 2: BOJ conducts its meeting. Paul, thanks so much for being 524 00:28:50,240 --> 00:28:54,080 Speaker 2: with us, Paul Jackson, Bloomberg Economy editor in Tokyo, helping 525 00:28:54,160 --> 00:28:57,000 Speaker 2: us preview the BOJ meeting. I'm Doug Krisner. You can 526 00:28:57,080 --> 00:29:00,520 Speaker 2: join Brian Curtison myself weekdays here for Bloomberg Day Acasia, 527 00:29:00,840 --> 00:29:04,040 Speaker 2: beginning at nine am in Hong Kong eight pm on 528 00:29:04,200 --> 00:29:05,400 Speaker 2: Wall Street. Tom. 529 00:29:05,640 --> 00:29:07,760 Speaker 1: Thank you, Doug and coming up here on Bloomberg day 530 00:29:07,760 --> 00:29:11,239 Speaker 1: Break weekend. The Iowa caucuses are over. Now it's on 531 00:29:11,360 --> 00:29:15,240 Speaker 1: to New Hampshire for the Republican presidential hopefuls. Who's in 532 00:29:15,280 --> 00:29:18,800 Speaker 1: the lead will the granted states independent voters change the 533 00:29:18,880 --> 00:29:23,160 Speaker 1: trajectory of the race. I'm Tom Busby, and this is Bloomberg. 534 00:29:33,240 --> 00:29:35,640 Speaker 1: This is Bloomberg day Break Weekend, our global look ahead 535 00:29:35,640 --> 00:29:37,720 Speaker 1: at the top stories for investors in the coming week. 536 00:29:37,920 --> 00:29:41,600 Speaker 1: I'm Tom Busby in New York. The New Hampshire GOP primary, 537 00:29:41,640 --> 00:29:44,280 Speaker 1: the first in the nation, is this Tuesday, and it 538 00:29:44,360 --> 00:29:47,640 Speaker 1: could be a make or break contest for Nicky Haley 539 00:29:47,920 --> 00:29:48,880 Speaker 1: or Ron DeSantis. 540 00:29:49,120 --> 00:29:49,480 Speaker 7: For more. 541 00:29:49,560 --> 00:29:51,959 Speaker 1: Let's head to our Bloomberg ninety nine one news room 542 00:29:52,000 --> 00:29:55,800 Speaker 1: in Washington and Bloomberg Balance of Power co host Kaylee Lines. 543 00:29:56,280 --> 00:29:59,280 Speaker 4: That's right, Tom, Iowa brought us the first real contest 544 00:29:59,360 --> 00:30:01,880 Speaker 4: in the race for the twenty twenty four Republican presidential 545 00:30:01,920 --> 00:30:05,640 Speaker 4: nomination and to blow out victory for former President Donald Trump. 546 00:30:06,040 --> 00:30:08,920 Speaker 4: But that was a caucus. New Hampshire brings us the 547 00:30:08,960 --> 00:30:12,520 Speaker 4: first in the nation primary, and it also maybe could 548 00:30:12,560 --> 00:30:16,000 Speaker 4: bring former UN Ambassador Nicki Haley's last real chance to 549 00:30:16,040 --> 00:30:19,760 Speaker 4: eat into the front runner's domination. Bloomberg senior national politics 550 00:30:19,760 --> 00:30:22,040 Speaker 4: reporter Nancy Cooke will be making the trip up to 551 00:30:22,120 --> 00:30:25,040 Speaker 4: Manchester with me to cover it, and she's joining me now, 552 00:30:25,120 --> 00:30:28,760 Speaker 4: So Nancy first, Nicki Haley is framing this as essentially 553 00:30:28,760 --> 00:30:32,720 Speaker 4: a two person race between her and Trump. There's a 554 00:30:32,720 --> 00:30:35,000 Speaker 4: lot of buzz out there about her ability to potentially 555 00:30:35,080 --> 00:30:37,440 Speaker 4: upset Trump in the state of New Hampshire, but the 556 00:30:37,440 --> 00:30:40,520 Speaker 4: polling we have seen over this past week suggests she's 557 00:30:40,600 --> 00:30:43,760 Speaker 4: still lagging behind him by a not insignificant margin. So 558 00:30:44,200 --> 00:30:46,400 Speaker 4: how hard is this really going to be for her 559 00:30:46,440 --> 00:30:47,040 Speaker 4: to pull off? 560 00:30:48,560 --> 00:30:51,120 Speaker 13: It's going to be hard to pull off, honestly. I 561 00:30:51,160 --> 00:30:53,560 Speaker 13: mean the polling is a little bit all over the place, 562 00:30:53,800 --> 00:30:57,160 Speaker 13: So the margin between them is anywhere from seven percentage 563 00:30:57,200 --> 00:31:00,880 Speaker 13: points to like sixteen percentage points, depend on which recent 564 00:31:00,920 --> 00:31:04,240 Speaker 13: poll you look at. But the takeaway is she's still 565 00:31:04,280 --> 00:31:07,120 Speaker 13: behind in all of these polls and Trump is leading her. 566 00:31:07,880 --> 00:31:11,520 Speaker 13: The New Hampshire electorate does favor her because you know, 567 00:31:11,640 --> 00:31:16,480 Speaker 13: it's moderates, it's centrist Republicans, it's independents and Democrats who 568 00:31:16,600 --> 00:31:19,440 Speaker 13: can switch party affiliation to vote. They would have already 569 00:31:19,440 --> 00:31:22,680 Speaker 13: had to have done that in the primary, and that's 570 00:31:22,720 --> 00:31:25,680 Speaker 13: a group that she has really targeted with her candidacy. 571 00:31:26,240 --> 00:31:31,200 Speaker 13: But similar to Iowa, Trump's grip on GOP, the Republicans 572 00:31:31,240 --> 00:31:35,080 Speaker 13: in New Hampshire is still really really strong and Haley 573 00:31:35,320 --> 00:31:37,280 Speaker 13: just hasn't sort of been able to chip into that. 574 00:31:37,320 --> 00:31:39,800 Speaker 13: So what she's doing is she's bringing new voters into 575 00:31:39,840 --> 00:31:43,000 Speaker 13: the Republican primary, like the Independence and the Democrats, but 576 00:31:43,040 --> 00:31:45,600 Speaker 13: she's having a hard time sort of making inroads into 577 00:31:45,640 --> 00:31:48,320 Speaker 13: his base of support. And that's what she will need 578 00:31:48,360 --> 00:31:50,000 Speaker 13: to do to actually win. 579 00:31:50,320 --> 00:31:53,840 Speaker 4: If she doesn't win in New Hampshire, could Trump essentially 580 00:31:53,920 --> 00:31:57,800 Speaker 4: have the nomination in the bag by Wednesday morning, Well, 581 00:31:57,800 --> 00:31:58,320 Speaker 4: I mean. 582 00:31:58,160 --> 00:32:00,640 Speaker 13: That's really what they're hoping, you know. So they are 583 00:32:00,680 --> 00:32:03,120 Speaker 13: hoping to have, you know, they had a blowout victory 584 00:32:03,160 --> 00:32:05,160 Speaker 13: in Iowa, They're hoping to have a blowout victory in 585 00:32:05,160 --> 00:32:08,320 Speaker 13: New Hampshire. He pulling shows that he is completely dominant 586 00:32:08,360 --> 00:32:11,040 Speaker 13: in South Carolina, her home state where she was governor, 587 00:32:11,120 --> 00:32:13,520 Speaker 13: and so they just want to sort of kick off 588 00:32:13,560 --> 00:32:17,400 Speaker 13: these first four contests including Nevada, and just showed that 589 00:32:17,440 --> 00:32:21,280 Speaker 13: they're totally dominant and basically have the nomination wrapped up 590 00:32:21,320 --> 00:32:24,360 Speaker 13: by mid March after Super Tuesday, and that would mean 591 00:32:24,400 --> 00:32:26,760 Speaker 13: sort of him earning enough delegates along the way from 592 00:32:26,760 --> 00:32:28,400 Speaker 13: all these garist contests to win it. 593 00:32:28,640 --> 00:32:31,200 Speaker 4: Ron DeSantis technically is still in the race as well, 594 00:32:31,360 --> 00:32:33,840 Speaker 4: after he came in number two in Iowa, but it 595 00:32:33,880 --> 00:32:36,920 Speaker 4: seems like he's kind of writing off New Hampshire since 596 00:32:36,960 --> 00:32:41,400 Speaker 4: he's pulling so low. They're diverting resources to South Carolina. 597 00:32:41,440 --> 00:32:43,400 Speaker 4: Are we even really going to be talking about him 598 00:32:43,720 --> 00:32:44,560 Speaker 4: in the Kranit state? 599 00:32:44,960 --> 00:32:47,120 Speaker 13: Well, so he is having events. One of the super 600 00:32:47,160 --> 00:32:50,280 Speaker 13: PACs supporting his candidacy called Never Back Down, is having 601 00:32:50,320 --> 00:32:52,680 Speaker 13: events in New Hampshire. I think they're having some today, 602 00:32:52,720 --> 00:32:55,440 Speaker 13: they're having some over the weekend. But New Hampshire is 603 00:32:55,480 --> 00:32:58,640 Speaker 13: not really Ronda Santa's fistine, and it hasn't been for months. 604 00:32:58,920 --> 00:33:01,440 Speaker 13: You know, he's never really advertise there. He doesn't have 605 00:33:01,480 --> 00:33:04,800 Speaker 13: a big contingent there. You know, after he won the 606 00:33:04,880 --> 00:33:07,680 Speaker 13: i after he came in third or second excuse me, 607 00:33:07,720 --> 00:33:10,719 Speaker 13: in the Iowa caucuses, he went directly to South Carolina. 608 00:33:11,240 --> 00:33:15,360 Speaker 13: You know, it's just not an electorate that really goes 609 00:33:15,400 --> 00:33:17,880 Speaker 13: with his ideology. You have to remember in Florida he 610 00:33:17,960 --> 00:33:21,720 Speaker 13: signed a six peek abortion van and that's not something 611 00:33:21,760 --> 00:33:25,200 Speaker 13: that New Hampshire voters the majority of them like or 612 00:33:25,240 --> 00:33:28,080 Speaker 13: are interested in and so policy wise, he doesn't really 613 00:33:28,120 --> 00:33:30,480 Speaker 13: match up there. And one of the most recent polls 614 00:33:30,480 --> 00:33:33,960 Speaker 13: I saw had him pulling at like six percent with it, 615 00:33:34,000 --> 00:33:36,440 Speaker 13: whereas Trump is over fifty. So you can just tell, 616 00:33:36,520 --> 00:33:38,320 Speaker 13: I mean, he just doesn't have a lot of juice there. 617 00:33:38,520 --> 00:33:41,400 Speaker 4: Well, I certainly am looking forward to hopefully not having 618 00:33:41,400 --> 00:33:44,720 Speaker 4: to break out my heated gloves like I did in Iowa. 619 00:33:44,800 --> 00:33:48,600 Speaker 4: Nancy Gug Bloomberg Senior national politics reporter, thank you so much, 620 00:33:48,640 --> 00:33:51,080 Speaker 4: and Tom, keep your eye on the Granite State. 621 00:33:51,360 --> 00:33:51,680 Speaker 1: Thank you. 622 00:33:51,760 --> 00:33:52,080 Speaker 2: Kaylee. 623 00:33:52,120 --> 00:33:54,760 Speaker 1: That was Bloomberg Balance of Power co host Kaylee Lines 624 00:33:54,800 --> 00:33:57,560 Speaker 1: reporting from our Bloomberg ninety nine to one newsroom in Washington. 625 00:33:57,960 --> 00:34:00,720 Speaker 1: And you can hear Balance of Power weaked noon to 626 00:34:00,760 --> 00:34:04,120 Speaker 1: two pm on Bloomberg Radio. And that does it for 627 00:34:04,160 --> 00:34:06,520 Speaker 1: this edition of Bloomberg Day Break Weekend. Join us again 628 00:34:06,560 --> 00:34:08,560 Speaker 1: Monday morning at five am Wall Street Time for the 629 00:34:08,640 --> 00:34:11,640 Speaker 1: latest on the markets, overseas and the news you need 630 00:34:11,680 --> 00:34:14,520 Speaker 1: to start your day. I'm Tom Busby. Stay with us. 631 00:34:14,680 --> 00:34:18,640 Speaker 1: Top stories and global business headlines are coming up right now.