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

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Speaker 1: Bloomberg Daybreak youurate podcast, available every morning on Apple, Spotify

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Speaker 1: or wherever you listen. It's Thursday, the tenth of April

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Speaker 1: in London. I'm Stephen Carroll coming up today. Just hours

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Speaker 1: after coming into Forrest, Trump announces a ninety day pause

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Speaker 1: on hired tariffs for dozens of countries. The US President

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Speaker 1: offers no reprove for China, imposing even higher levies that

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Speaker 1: now total one hundred and twenty five percent, plus liberation

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Speaker 1: day for markets. The S and P five hundred gains

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Speaker 1: almost ten percent as the tariff pause drives the best

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Speaker 1: dock rally since two thousand and eight. Let's start with

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Speaker 1: a roundup of our top stories. Donald Trump has an

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Speaker 1: aunceday surprise ninety day pause on higher tariffs that hit

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Speaker 1: dozens of trading partners while raising duties on China to

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Speaker 1: one hundred and twenty five percent. The President also says

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Speaker 1: he's going to take a look at tariff exemptions for

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Speaker 1: some US companies and will decide quote on instinct. It

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Speaker 1: all comes thirteen hours after the extra duties on fifty

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Speaker 1: six countries and the European union took effect. Trump was

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Speaker 1: asked why he decided to back off.

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Speaker 2: I thought that people were jumping a little bit out

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Speaker 2: of line. They were getting yippie, you know, they were

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Speaker 2: getting a little bit yippy, a little bit afraid.

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Speaker 1: President Trump, speaking there as the White House confirmed that,

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Speaker 1: with the exception of China, countries hit with higher duties

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Speaker 1: will now face a ten percent baseline levy Instead. US

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Speaker 1: tariffs on steel, aluminium, and automobiles remain at their current rates,

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Speaker 1: alongside separate tariffs on Canadian and Mexican goods. Bloomberg has

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Speaker 1: learned that China's top leaders are meeting today to discuss

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Speaker 1: additional economic stimulus in response to the latest tariff salvo.

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Speaker 1: On Wednesday, Trump further escalated the tariff battle between the

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Speaker 1: world's two largest economies. A one hundred and twenty five

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Speaker 1: percent tariff on Chinese goods took effect at five am

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Speaker 1: London time. The move follows Beijing's announcement that it will

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Speaker 1: raise its tariff's on US products to eighty four percent.

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Speaker 1: Despite the rising tensions, the US president expects the two

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Speaker 1: countries to begin negotiations over trade.

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Speaker 3: China wants to make a deal, They just don't know

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Speaker 3: how quite to go about it.

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Speaker 2: You know, it's one of those things they don't know

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Speaker 2: quite the proud people and.

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Speaker 1: President she's a proud man. I know him very well,

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Speaker 1: and they don't.

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Speaker 4: Know quite how to go about it.

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Speaker 1: But they'll figure it out.

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Speaker 3: In the process of figuring out.

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Speaker 1: But they want to make a deal. Trump says he

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Speaker 1: doesn't believe he'll need to raise rates any further to

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Speaker 1: bring China to the negotiating table. Despite the latest escalation

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Speaker 1: between Washington and Beijing, markets are viewing Trump's tariff for

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Speaker 1: pre for other countries as a major positive. The S

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Speaker 1: and P five hundred sword on the news, regaining more

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Speaker 1: than seventy percent of the losses since the so called

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Speaker 1: Liberation Day announcement last week. In all, more than thirty

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Speaker 1: billion shares worth one point five trillion dollars changed hands

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Speaker 1: across US venues, a level of activity not seen since

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Speaker 1: two thousand and eight, but some, including TPW Investment Management

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Speaker 1: CEO J Pulaski, believe the damage has already been done.

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Speaker 3: This has been an immense own goal by the US administration.

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Speaker 3: We have basically proven ourselves to be not good partners,

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Speaker 3: not good business partners. And I think that was reflected

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Speaker 3: in the treasury market and reflected in the dollar. And

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Speaker 3: so for us, you know, we have been and continue

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Speaker 3: to be of the view that we are early in

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Speaker 3: a secular change of leadership away from US equities, which

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Speaker 3: have been the leader since the bottom of O nine,

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Speaker 3: to the rest of the world. J.

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Speaker 1: Pilowski speaking there is Asian stocks are on course for

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Speaker 1: their biggest jump in two years, while European stock futures

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Speaker 1: appointing to significant gains at the open. Meanwhile, the yield

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Speaker 1: on to your treasury is jumped by as much as

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Speaker 1: thirty basis points on the tariff pause, some calling us

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Speaker 1: a no win market. There have been fears about this

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Speaker 1: to be of the world's biggest death market and its

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Speaker 1: status as a safe haven. Tonald Trump acknowledged he had

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Speaker 1: been watching the moves.

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Speaker 2: I was watching the bond market.

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Speaker 3: That bond market is very tricky.

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Speaker 1: I was watching it.

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Speaker 5: But if you look at it now, it's it's beautiful.

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Speaker 1: President's action caused a major reversal of the curve steepening

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Speaker 1: trade as traders unwound bets on swift interest rate cuts.

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Speaker 1: The S and P five hundred ended yesterday nine point

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Speaker 1: five percent of its biggest one day gain since two

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Speaker 1: thousand and eight. It took just minutes to reverse much

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Speaker 1: of the past week's lasses.

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Speaker 4: Bloomberg Exchange.

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Speaker 1: Wilcock has the story.

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Speaker 2: Is it real? That was how traders on the New

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Speaker 2: York Stock Exchange reacted as words spread of Trump's U turn.

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Speaker 2: Then you sparked a stunning relief rally as trillions of

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Speaker 2: dollars moved into equities in minutes. Goldman Sachs reversed their

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Speaker 2: forecast for a US recession, which they'd published only two

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Speaker 2: hours before. But even as the rush hit where he remains.

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Speaker 2: Some investors who spoke to Bloomberg say it's still hard

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Speaker 2: form a fundamental view of what the Trump administration actually wants.

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Speaker 2: In their view, the volatility is by no means over

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Speaker 2: in London, James Wilcock, Bloomberg Radio.

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Speaker 1: And there's a new warning of the UK housing market

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Speaker 1: risks being blown off course by the US trade war.

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Speaker 1: The Royal Institution of Chartered Surveyors measure of buyer demand

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Speaker 1: hit its lowest since September twenty twenty three last month,

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Speaker 1: with activity expected to dip further in the next three months.

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Speaker 1: They are index of house prices dropped by nine percentage

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Speaker 1: points to well below the median expectation of economists. While

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Speaker 1: the outlook for next year is more positive, Rix warrants

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Speaker 1: that this could change if the turmoil unleashed by Trump's

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Speaker 1: tariff salvo escalates. Those are your top stories on the markets.

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Speaker 1: The Mscish Pacific Index up five point two percent, on

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Speaker 1: track for its biggest jump in more than two years.

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Speaker 1: The nickey in Tokyo is eight point five percent higher.

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Speaker 1: European stock Future is pointing to a strong open in Europe.

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Speaker 1: Eurostrucks fifty up eight point one percent for one hundred

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Speaker 1: futures five and a half percent stronger. Dak's features up

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Speaker 1: by almost eight percent as well. On treasury markets, the

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Speaker 1: ten year yeld down another five basis points this morning

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Speaker 1: to four point two nine percent. The thirty year yeld

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Speaker 1: down five basis points as well to four point six

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Speaker 1: nine percent. On currency markets, the Bloomberg Dollar Spot Index

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Speaker 1: is four tenths weeker. The Euros trading at one oh

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Speaker 1: nine eighty three against the dollar. The pound is at

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Speaker 1: one twenty eight fifty nine.

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Speaker 6: Well.

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Speaker 1: In a moment, we'll bring up to date on all

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Speaker 1: of the latest tariff headlines, plus dig into the major

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Speaker 1: rally that we're seeing on markets as a result. But

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Speaker 1: we have a great read on Bloomberg this morning detailing

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Speaker 1: the inside story of Trump's tariff reversal, Justin Sank and

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Speaker 1: his team, writing that within fourteen hours, Trump executed one

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Speaker 1: of the biggest economic policy reversals in modern presidential history.

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Speaker 1: The piece has some fascinating insights how Trump was watching

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Speaker 1: the bond markets, how he placed particular weight on commentary

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Speaker 1: from JP Morgan's Jamie Diamond who so who had said

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Speaker 1: it was perfectly reasonable to conclude that global trade was unfair,

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Speaker 1: but also warned that a recession was the likely outcome

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Speaker 1: of Trump's movement, that businesses were cutting back amid the uncertainty.

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Speaker 1: That's a message that seems to have gotten through to

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Speaker 1: the US President. Donald Trump also tempted by the overtures

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Speaker 1: that he'd had from trading partners looking for deals after

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Speaker 1: the tariffs were mooted, apparently offering concessions on issues like

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Speaker 1: non trade barriers that hadn't been in play before. The

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Speaker 1: social media post itself, with the announcement drafted by Trump,

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Speaker 1: Howard Lutnick, and Scott Bessen without any of Trump's legal

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Speaker 1: team present. In fact, some people in the White House

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Speaker 1: only found out about it at the same time as

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Speaker 1: everyone else. Meanwhile, Trump's trade chief Jemison Greer was testifying

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Speaker 1: before Congress as all of this was happening. Here he

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Speaker 1: is being questioned by the Democratic Representative Stephen Harsford, how

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Speaker 1: many days?

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Speaker 3: How many weeks?

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Speaker 4: I understand it's ninety days.

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Speaker 5: I haven't spoken to the present since I so the

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Speaker 5: trade representative hasn't spoken to the President of the United States.

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Speaker 4: About a global reordering of trade. Yes, I have, and

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Speaker 4: yet hearing with you. So yet he announced it on

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Speaker 4: a tweet. W t H. Who's in charge? The President

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Speaker 4: of United States is in charge.

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Speaker 1: That's right, Representative Jemeerson Greer there giving you an insight

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Speaker 1: of perhaps how quickly this story was changing. You can

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Speaker 1: read justin Singk's full account of how the decision came

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Speaker 1: about on Bloomberg dot Com and on the terminal Well.

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Speaker 1: The tariffs, the higher tariff have been paused for many countries,

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Speaker 1: including members of the European Union, but China still facing

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Speaker 1: this massive levee now of one hundred and twenty five percent.

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Speaker 1: Let's bring in our senior US Government editor Derek Wellbank

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Speaker 1: for more on this story, Derek, The focus of course

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Speaker 1: now on very much what's happening between the US and China.

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Speaker 1: How much more escalation could we be in line?

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Speaker 4: For Well, we've gotten signals that this is as high

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Speaker 4: as the US wants to go. But never say never, right,

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Speaker 4: because the original rate for this was going to be

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Speaker 4: thirty four percent on top of the twenty four or

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Speaker 4: on top of the twenty that had already been levied, right,

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Speaker 4: So somewhere in that fifty four range, But then there

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Speaker 4: was an additional fifty and now that that's been plussed

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Speaker 4: up in we're at one hundred and twenty five. So

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Speaker 4: we really have to say a bit of never saying ever,

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Speaker 4: even though the initial read is this is as high

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Speaker 4: as we're going with China, the latest moves sort of

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Speaker 4: put us into a place where from here forward you

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Speaker 4: are looking at a very sort of bifurcated trade posture

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Speaker 4: from the United States. Right, you have a massive one

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Speaker 4: hundred and twenty five percent tariff on all Chinese goods,

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Speaker 4: and let's be clear, the US is defining China as

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Speaker 4: not just the mainland but also Hong Kong and Macau,

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Speaker 4: and then for the rest of the world, a. Generally speaking,

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Speaker 4: there are a couple of here and theres generally speaking

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Speaker 4: a global ten percent minimum. So that is a very

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Speaker 4: very different world that you're talking about here, we're something

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Speaker 4: like that to hold. You can see a clear case

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Speaker 4: where the move toward trying to get a supply chains

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Speaker 4: to move from China to other countries, your vietnams, et cetera,

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Speaker 4: is very much still in play.

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Speaker 1: And of course this opens the door then for negotiations

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Speaker 1: that these countries, many countries we've been told have made

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Speaker 1: overtures to the White Eyes to try and get concessions

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Speaker 1: in that process. Are they going to be encouraged even though,

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Speaker 1: as you point out, many of these countries are facing

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Speaker 1: the ten percent basedline levy? Still, are they going to

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Speaker 1: be encouraged by this move to perhaps make more attractive

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Speaker 1: offers to the US President.

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Speaker 4: Well, the last time that you and I talked, we

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Speaker 4: talked about how no country had figured out how to

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Speaker 4: move the president off of his signature economic policy. And

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Speaker 4: now we've gotten an indication because what we said at

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Speaker 4: that time was when you first get that move, that's

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Speaker 4: going to sort of give clarity about how to do

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Speaker 4: it in future. Now I'm not sure that the exact

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Speaker 4: way that that's happened is exactly clarity. But one of

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Speaker 4: the things that the White House did make clear that

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Speaker 4: I think everyone's going to be paying attention to, is

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Speaker 4: that there's a difference between China, which very stridently responded,

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Speaker 4: and a lot of the other countries which didn't. Right,

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Speaker 4: we had been mentioning a lot of these countries were

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Speaker 4: in weight and sea posture didn't necessarily immediately retaliate. Some

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Speaker 4: of that was because they wanted to do talks instead,

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Speaker 4: and we're racing to Washington to try and do that.

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Speaker 4: Some of it candidly. The European Union is a great

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Speaker 4: example of this. They were still talking about what they

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Speaker 4: wanted to do even as they were being pushed by

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Speaker 4: some friends in Germany to respond harder. The events sort

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Speaker 4: of completed a cycle before they got to it. In

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Speaker 4: any case, that kind of weight out wound up being

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Speaker 4: a strategy that resulted in lower terraff for people. And

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Speaker 4: as they say, we're very early days in a four

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Speaker 4: year administration, but everyone is taking notes about how to

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Speaker 4: move this president.

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Speaker 1: The other story, the next step in the story we're

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Speaker 1: watching as well is our reporting that China's top leaders

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Speaker 1: are preparing their own economic response to this as well,

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Speaker 1: and the potential for more stimulus to counter the effects

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Speaker 1: of the trade war. What do we know about the

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Speaker 1: options they're considering.

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Speaker 4: Well, that's exactly right. We're we're understanding understanding that top

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Speaker 4: leaders are meant to meet today to discuss additional stimulus items.

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Speaker 4: You're talking about support measures for consumer spending, uh, technology, housing,

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Speaker 4: things of that nature. So it's a lot of kind

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Speaker 4: of domestic support is kind of where we're hearing uh

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Speaker 4: for for China. That would that would track with a

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Speaker 4: lot of what China has been trying to do sort

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Speaker 4: of broader in their in their economic strategy over the

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Speaker 4: last several years. You know, one of the things that

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Speaker 4: we've seen is that some flagship companies really do have

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Speaker 4: an x US strategy. B y D, Huawei are great

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Speaker 4: examples of this. They don't really have any US presence

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Speaker 4: to speak of, but they've still managed to find an

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Speaker 4: awful lot of success. And so this would be an

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Speaker 4: example of China sort of doubling down on itself. An

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Speaker 4: analogy I have heard is that a river may be

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Speaker 4: quite turbulent, but the ocean is a great leveler, right

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Speaker 4: and all water flows into the ocean. China's economy is

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Speaker 4: an ocean to itself.

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Speaker 1: Derek Wellbanker, Senior US Government editor, thank you very much

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Speaker 1: for joining us as we are watching for further developments

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Speaker 1: on this story. Well Trump's announcement sparked a dramatic reversal

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Speaker 1: on market. Stocks on Wall Street swords and NASDAK having

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Speaker 1: its best day in twenty four years, Treasuries rallying to

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Speaker 1: Asian shares, our higher futures pointing to a jump at

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Speaker 1: the open in Europe as well. Let's bring in our

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Speaker 1: markets live stretch. Just Mary Nicola for more. Mary, how

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Speaker 1: should we be thinking about this turnaround on markets? Is

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Speaker 1: this a full reversal of the recent selloffs or is

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Speaker 1: it investors jumping on any good news.

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Speaker 5: I think it's probably more of the latter, that we're

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Speaker 5: just jumping on any good news because the fact is

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Speaker 5: that teriff's are they're less punitive. Yes, but there is

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Speaker 5: still some concern over a recession of some kind. And

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Speaker 5: sure inflation has abated, but it still doesn't completely erase

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Speaker 5: a lot of the global growth woes that have really

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Speaker 5: gripped the markets to begin with. We still have tariffs

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Speaker 5: that are in place, and they're at historically high levels.

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Speaker 5: And then of course you have tensions between the world's

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Speaker 5: largest economies coming still elevated, so a substantial balance may

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Speaker 5: be harder to come by, and we're likely to see

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Speaker 5: that over the coming days.

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Speaker 1: We also have the story that Derek Ballbank was just

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Speaker 1: telling us about the potential for China's stimulus as a

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Speaker 1: response to perhaps the damage from this. Of course, China

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Speaker 1: very much being punished by the increase in levees that

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Speaker 1: have now come into force on its imports as well.

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Speaker 1: How are markets parsing this bad news and potentially good

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Speaker 1: news from stimulus.

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Speaker 5: Yeah, what we've seen this morning is that China assets

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Speaker 5: are just essentially ignoring these punitive levees on from the US,

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Speaker 5: and what the focus has been on is just on stimulus.

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Speaker 5: So obviously as tensions rise, there's expectations higher expectations of

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Speaker 5: more stimulus. You noted the news of that policymakers are meeting,

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Speaker 5: and so of course that is all putting just putting

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Speaker 5: hopes that more is coming sooner rather than later. And

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Speaker 5: then of course we had the disappointment from the price

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Speaker 5: data this morning, which essentially highlights that there is a

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Speaker 5: need for more stimulus, even when you're ignoring what is

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Speaker 5: happening on the external side, because the domestic challenges are

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Speaker 5: still quite strong. So you still have deflation, you have

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Speaker 5: a property malaise, and you have weak consumption, and what's

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Speaker 5: happening externally just compounds it.

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Speaker 1: How is this all playing out on the Chinese yuan,

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Speaker 1: because it's something been watching very closely how the People's

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Speaker 1: Bank of China has been managing its daily fix for

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Speaker 1: the currency.

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Speaker 5: Yeah, the yuan. Essentially, we saw that the fix has

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Speaker 5: was weakened today and we're going to see a gradual

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Speaker 5: weakening in the currency. There had been recent calls that

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Speaker 5: you we would get a sharper depreciation in the currency,

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Speaker 5: but that's unlikely, especially with the market volatility, especially with

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Speaker 5: how high the dollar CEE and why volatility remains, and

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Speaker 5: of course the prospects of triggering outflows is still a

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Speaker 5: threat when you if you decide to make such a

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Speaker 5: one off depreciation, and of course you don't want to

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Speaker 5: when when you're under the spotlight like China is right now,

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Speaker 5: you don't want to draw the attention and be a

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Speaker 5: bad actor in this environment. So I think China is

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Speaker 5: going to continue to see UH to play by the

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Speaker 5: rules and sense of not doing anything aggressive on currency policy,

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Speaker 5: to ensure that it just has its credibility.

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Speaker 1: Mary this time yesterday, a lot of the focus was

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Speaker 1: on the moves that we were seeing in treasury markets.

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Speaker 1: This massive job, particularly at the long end, and curving

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Speaker 1: yields a reversal of that, as we've seen rallies across

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Speaker 1: treasuries as well as equities on the back of this.

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Speaker 1: Can we say that treasury markets have returned to normal?

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Speaker 6: Now?

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Speaker 1: Are they vulnerable to further shifts in policy?

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Speaker 5: I wouldn't know about normal, but I think you do

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Speaker 5: get reprieved. Absolutely, So normalcy might be a little bit

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Speaker 5: far fetch, especially when you look at where volatility stands.

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Speaker 5: So if you look at the move index, the move

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Speaker 5: index still remains very elevated. So obviously there's still a

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Speaker 5: lot of jitters in the bond market. But one thing

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Speaker 5: is interesting, and it does seem that it's the bond

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Speaker 5: market that caused Trump to blink rather than the stock market.

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Speaker 5: But of course the erratic moves that we saw just

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Speaker 5: prompted him to shift gears and so, but what we're

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Speaker 5: seeing overall is that if with the delay in these tariffs.

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Speaker 5: We are going to see a delay in a more

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Speaker 5: wait and see approach from the Fed that still keeps

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Speaker 5: yields elevated. But overall, I think also you still have

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Speaker 5: discussions on the tax cuts coming through and a tax

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Speaker 5: bill that's still in the pipeline, so I wouldn't say

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Speaker 5: that we're out of the woods completely on the bond market.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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