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

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Speaker 2: This is the Bloomberg Day Bakut podcast. Good morning, It's Thursday,

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Speaker 2: the third of July. I'm Caroline hepkea in London.

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Speaker 3: And I'm Stephen Carol and Brussels coming up today. The

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Speaker 3: UK Prime Minister offers belated support for his chancellor after

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Speaker 3: images of Rachel Reeves's crying in Parliament sparked a market convulsion.

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Speaker 2: US President Donald Trump suggests House Republicans could pass his

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Speaker 2: multi trillion dollar tax cut and spending bill later today.

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Speaker 3: Plus till Wealth do us part. While the UK Supreme

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Speaker 3: Court's decision to back a former UBS banker in a

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Speaker 3: one hundred and thirty three million pounds divorce battle could

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Speaker 3: have far reaching consequences.

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

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Speaker 3: The UK Prime Minister, Kier Starmer says Rachel Reeves will

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Speaker 3: stay on as Chancellor for many years to come. The

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Speaker 3: comments come after Starmer failed to back reeveses and in

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Speaker 3: Parliament yesterday, creating a scene as a visibly upset Chancellor

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Speaker 3: was sitting behind him and appeared to be crying. Starmar

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Speaker 3: later spoke to the BBC's Nick Robinson. To express his

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Speaker 3: full support for Reeves and say her tears were not

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Speaker 3: about politics.

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Speaker 4: It was a personal matter for the Chancellor, and I've

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Speaker 4: been absolute clear with You've got nothing to do with politics,

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Speaker 4: nothing to do with any discussion between me and Rachel,

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Speaker 4: nothing to do with the matters of this week. She'll

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Speaker 4: still be chancellor by the time this interview's broadcast in

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Speaker 4: full in a few years, be chancellor by time this

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Speaker 4: is broadcast, would be chancellor for a very long time

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Speaker 4: to come. Because this project that we've been working on

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Speaker 4: to change the late pod, to win the election, change

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Speaker 4: the country, that is a project which the Chancellor I've

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Speaker 4: been working on together.

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Speaker 3: So yes, Kers Starmer there speaking to BBC Radio four

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Speaker 3: is Political Thinking podcast. Starmar's latest difficulty has come only

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Speaker 3: a day after he had to make a humiliating U

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Speaker 3: turn on his government's flagship well Fare Bill. Tomorrow, the

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Speaker 3: Labor government will market its first year anniversary since winning power.

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Speaker 2: Well Keir Starmer's words of support last night came too

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Speaker 2: late for markets. Global bond inverse has reacted swiftly to

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Speaker 2: the Prime Minister's earlier failure to back his chancellor from

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Speaker 2: the dispatch box in Parliament. Thirty year guilt yields surged

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Speaker 2: nineteen basis points, the biggest jump since April, as stocks

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Speaker 2: slid and the pound tumbled. The sharp moves come as

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Speaker 2: traders speculated that Starmer may try to plicate his labour

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Speaker 2: MPs by replacing his chanceller with someone more open to

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Speaker 2: increase spending and borrowing. This as the government faces a

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Speaker 2: widening fiscal hole ahead of the autumn budget, driven by

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Speaker 2: a five billion pound climbed down over Starmer's flagship welfare

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Speaker 2: reforms and a one point two five billion pound reversal

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Speaker 2: on winter fuel payments for pensioners.

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Speaker 3: A new survey of central bank manager says the weaponization

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Speaker 3: of foreign exchange is becoming a growing headache. Bloomberg's Ewan

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Speaker 3: Parts has the details.

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Speaker 5: Almost half of central bank managers around the world now

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Speaker 5: say the geopolitical weaponization offex reserves is an investment risk

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Speaker 5: for them. The finding comes from a UBS survey of

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Speaker 5: nearly forty central banks completed last month, and those citing

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Speaker 5: weaponization was up sharply from just fourteen percent two years ago.

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Speaker 5: Ubsa the concern is a key factor driving central bank

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Speaker 5: purchases of goals, which it says is much safer from

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Speaker 5: being targeted by sanctions in London, I'm you In parts

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Speaker 5: of Bloomberg Radio.

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Speaker 2: President Trump says that the House is ready to vote

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Speaker 2: tonight on his Big Beautiful bill. In a post on

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Speaker 2: truth Social Trump said that he had meetings with Republican

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Speaker 2: congressional members and that they are united. But despite the comments,

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Speaker 2: House Republican leaders have struggled to find the final votes

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Speaker 2: to advance the President's multi trillion dollar tax and spending package.

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Speaker 2: Republican con Gusman Jim Jordan says that while holdouts may

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Speaker 2: have genuine concerns, they should still vote for the bill.

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Speaker 1: I hope it passes. I think it will, and frankly,

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Speaker 1: I think it should because this is a good piece

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Speaker 1: of legislation. I always say, you know, it's a good

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Speaker 1: piece of legislation because the Democrats hated so much. They

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Speaker 1: don't like it, because it actually empowers families by you know,

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Speaker 1: let them keep more of their money, giving them school choice,

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Speaker 1: making sure our border stays secure, and make ingable body

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Speaker 1: people in our wellfer system.

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Speaker 3: Now have to work.

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Speaker 2: Representative Jim Jordan of Ohio there the White House so

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Speaker 2: far hasn't been entertaining changes to the bill to win

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Speaker 2: over House Republicans. If changes are made to secure a majority,

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Speaker 2: it would then force the Senate to vote again on

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Speaker 2: the bill, blowing President Trump's fourth of July deadline and

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Speaker 2: adding weeks of potential delay to his flagship measure.

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Speaker 3: The Trump administration has lifted curbs on chip designed software

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Speaker 3: sales in China as Washington and Beijing implement a trade

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Speaker 3: agreement for both countries to ease restrictions on critical technologies.

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Speaker 3: US Commerce Department informed the world's three leading chip design

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Speaker 3: software providers that they no longer need government licenses to

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Speaker 3: do business in China. Ziemans says it has restored full

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Speaker 3: access to its software and technology for Chinese consumers, while

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Speaker 3: Synopsis and Cadence say they're in the process of doing so.

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Speaker 3: It's part of a deal to ease restrictions introduced during

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Speaker 3: the escalation of trade tensions after Trump's so called April

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Speaker 3: Liberation Day.

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Speaker 2: President Trump has also announced a trade deal with Vietnam.

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Speaker 2: It includes a twenty percent tariff on Vietnamese exports to

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Speaker 2: the US and a forty percent levey on goods deemed

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Speaker 2: to be transshipped through the country. In return, Trump said

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Speaker 2: that Vietnam had agreed to drop all levies on US

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Speaker 2: imports following weeks of intense diplomacy. In a social media post,

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Speaker 2: he said there would be zero tariff on US products

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Speaker 2: sold to Vietnam. Greta Pish, who is former General Counsel

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Speaker 2: to the Office of the US Trade Representative, said that

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Speaker 2: the agree raises a number of questions.

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Speaker 6: You know, the devil will be in the details, as

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Speaker 6: they say, the truth social post by the President was

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Speaker 6: pretty broad brush. It will be interesting to see, you know,

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Speaker 6: are all products treated the same? Are these across the

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Speaker 6: board tariff treatments? Are there any non tariff barriers that

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Speaker 6: are addressed?

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Speaker 2: Gotta Paish. Speaking there to bloombergs, Joe Matthew and Kaylie

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Speaker 2: lyons as the deal with Vietnam risks provoking retaliatory steps

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Speaker 2: on China. Ran A Sajedda from Bloomberg Economics rights that

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Speaker 2: Beijing has made clear that it would respond to deals

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Speaker 2: that came at the expense of Chinese interests. She as

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Speaker 2: the decision to agree to a higher tarif on goods

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Speaker 2: quote trans shipped through Vietnam would fall into that category.

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Speaker 3: Those are your top stories on the markets. The MSCI

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Speaker 3: ASH Specific Index this morning is trading two tenths of

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Speaker 3: one percent higher. Eurostos fifty futures are currently up by

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Speaker 3: two tenths of one percent as well. Looking at the

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Speaker 3: currency markets, the pound, after weakening yesterday down at the

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Speaker 3: tenth of one percent today at one thirty six twenty seven.

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Speaker 3: That's as the Bloomberg Dollar Spot Index is a tenth

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Speaker 3: of one percent higher. We'll be watching very closely to

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Speaker 3: see how guilts open up today after we've had that

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Speaker 3: statement of support from the Prime Minister for his Chancellor

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Speaker 3: Rachel Reeves yesterday, just as a reminder of the tenure,

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Speaker 3: guilt shield sixteen basis points higher four point six one percent,

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Speaker 3: the thirty year yield nineteen basis points higher. Today in trading,

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Speaker 3: US treasuries are at dinner basis point at four point

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Speaker 3: two six on the tenure.

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Speaker 2: Well, in a moment, we'll bring you more on the

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Speaker 2: future of the UK Chancellor Rachel Reeves, plus what we

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Speaker 2: learn from a Supreme Court ruling in a divorce case

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Speaker 2: involving a former UBS executive that in a moment, look, yes,

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Speaker 2: dam's pretty extraordinary when it comes to UK politics. Having

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Speaker 2: said that, we'll get into the details. Maybe we should

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Speaker 2: talk about something a little light at Wimbledon, cheering us

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Speaker 2: all up. But Lisa are still some home favorite, some

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Speaker 2: Brits in contention, Stephen.

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Speaker 3: Yeah, indeed. And there's also some people are making massive

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Speaker 3: amounts of money out of this event as well, as

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Speaker 3: I've learnedly about fitting reporting from our colleagues Elliott Burne

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Speaker 3: and Jamie Nimmo have been talking about the Wimbledon debentures,

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Speaker 3: which are these essentially season tickets is a fancy term

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Speaker 3: for season tickets, as you buy a five year stretch

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Speaker 3: of a good seat on Center Court and Number one court.

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Speaker 3: And the one perk perhaps that I didn't know about,

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Speaker 3: is that when you have one of these seats, you

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Speaker 3: can sell the tickets to the days you can't go.

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Speaker 3: They're the only exchangeable tickets available for Wimbledon, and that's

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Speaker 3: become so profitable because of the amount that you can

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Speaker 3: sell them for that Actually, these debentures are now being

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Speaker 3: treated as a tradeable asset. People are buying them for

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Speaker 3: seasons to come and then selling them on at massive markups.

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Speaker 3: So the current ones for the period from twenty twenty

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Speaker 3: six to twenty thirty are changing hands at over two

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Speaker 3: hundred thousand pounds. That's a profit of about seventy five

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Speaker 3: percent of what people had played from the originally. Apparently

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Speaker 3: this is a lot of US buyers really interested in

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Speaker 3: these premium seats. You also get access to the lounges

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Speaker 3: and the VIP areas as well. But also good for

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Speaker 3: the club as it's in a way that they can

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Speaker 3: invest on things.

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Speaker 1: You know.

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Speaker 3: The retracting roof over Center Court was something that was

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Speaker 3: paid for by these dementsire fees as well. But it's

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Speaker 3: certainly a hot market this time of year.

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Speaker 7: Yeah.

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Speaker 2: No, they've always been a tradeable asset, haven't they for

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Speaker 2: a long time, the dimensions, But yes they are super

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Speaker 2: popular and yeah you get to swan in and swe out,

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Speaker 2: don't you. So you can see the appeal maybe one

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Speaker 2: summer day AnyWho. That's one of the pieces that we've

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Speaker 2: been reading about and thinking about this morning for you.

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Speaker 2: But as I say that, the politics was dramatic yesterday

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Speaker 2: for Britain, the UK Prime Minister now saying that Rachel

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Speaker 2: Reeves will stay on as Chancellor for many years to come.

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Speaker 2: This after the bond markets sell off yesterday, you saw

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Speaker 2: the guilt yield, the guilt curve steepened pretty dramatically because

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Speaker 2: of the speculation about her future. So let's bring in

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Speaker 2: our UK politics were brought to James Wilcock today what

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Speaker 2: happened yesterday that spooked the bond markets in such a

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Speaker 2: big way?

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Speaker 8: James, Well, appearances mass are in politics and so yesterday

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Speaker 8: prime Minister's questions the first day after a major humiliating

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Speaker 8: you turn from Stamer. He has his Deputy Prime Minister

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Speaker 8: Andrew in the left and his chancell Rachel Reeves on

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Speaker 8: the right as a way of showing support the whole

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Speaker 8: bench in front of them. But instead what we and

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Speaker 8: the guilt markets were treated to was this bizarre scene

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Speaker 8: where the Prime Minister carries on answering these questions while

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Speaker 8: his chancellor is visibly upset and a couple of points

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Speaker 8: shares a few tears as the session goes on, with

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Speaker 8: the Leader of the Opposition, Kenny Badenock at one point

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Speaker 8: questioning if she would still be in office as Chancellor

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Speaker 8: by the time in the next election, and then Starmer

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Speaker 8: refusing to answer that question. And what's interesting to me

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Speaker 8: is the U turned themselves on Tuesday and Welfare didn't

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Speaker 8: actually seem to scare or spook the markets, but at

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Speaker 8: the moment of the markets watching this kind of tearful exchange,

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Speaker 8: they clearly thought something was wrong in the chancery and

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Speaker 8: also with Number ten, and the sell off started from there.

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Speaker 3: James, what can we say on Thursday morning about Rachel

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Speaker 3: Reeves's position. We've had these reassurances now from the Prime

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Speaker 3: Minister care of Starmer.

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Speaker 8: Yeah, I mean, various spokespeople have been out in the

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Speaker 8: afternoon saying there was absolutely no risk at all to

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Speaker 8: the chance to position. They said it was a personal

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Speaker 8: issue that was nothing to do with the politics. A

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Speaker 8: few MPs spoke to Bloomberg and said there's also an

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Speaker 8: issue going on with the Speaker. But then it's very

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Speaker 8: hard to sort of ignore that this came immediately after

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Speaker 8: this very serious downturn in sort of the government's fortunes

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Speaker 8: after the welfare decision, I think, after Starmer's had his

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Speaker 8: second going out and back in the chance from the

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Speaker 8: later few the BBC over night, Let's see how the

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Speaker 8: market's open this morning for guilts. But the questions Number

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Speaker 8: ten will be asking themselves this morning are if someone

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Speaker 8: else is going to do that job as a chance

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Speaker 8: to what realistically is going to change about both the

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Speaker 8: government policy and the UK fiscal position. Reeves is quite

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Speaker 8: widely seen by the market, says the most market friendly

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Speaker 8: chance that Labor have on offer effectively at the front bench,

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Speaker 8: although there are betting odds going now on Cabinet Office

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Speaker 8: Minister Pat McFadden and Home Secretary of At Cooper. Anyone

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Speaker 8: who comes in is going to face the same sort

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Speaker 8: of fiscal set of problems. And the downside for Starmer

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Speaker 8: is Rachel Reeves has been a core central I can't

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Speaker 8: stay it enough part of his political project. She has

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Speaker 8: been the sort of name on the tin for fiscal

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Speaker 8: stability and credibility for this Labor government and losing her

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Speaker 8: would be one of the most serious negative symbols of

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Speaker 8: his administration. One can imagine.

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Speaker 2: Yeah, they were in lockstep, as the Prime Minister has

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Speaker 2: talked about in trying to woo the city and speak

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Speaker 2: to investors and represent UKPLC. But as you say, it's

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Speaker 2: the fiscal challenges that the UK government is facing that

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Speaker 2: you know will perhaps hear more on at Mansion has

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Speaker 2: and then in the autumn budget.

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Speaker 8: I think the question now for the Labor Party as

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Speaker 8: a whole, because as we're finding out from this week,

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Speaker 8: the MPs increasingly have a large amount they want to

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Speaker 8: say about the direction of the party is who is

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Speaker 8: the winner here is Reaves the chance for physical credibility

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Speaker 8: and this week has been a major setback for her

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Speaker 8: on the welfare spending or is it labor and ps

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Speaker 8: and their bids for changes to two child benefit caps,

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Speaker 8: further pushers on welfare and willingness to have wealth taxes

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Speaker 8: in the autumn as well. The normal arbiter of these

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Speaker 8: things is the Prime Minister, Kids Starmer. He's set to

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Speaker 8: speak later this morning. I think many people in both

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Speaker 8: the markets and wider Westminster politics will be watching to

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Speaker 8: see where he comes down on those two decisions.

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Speaker 3: Okay, James Wilcock, a UKA Politics supporter, thank you very much.

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Speaker 2: Well, there's another story here in the UK that we

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Speaker 2: want to talk about today. This is the Supreme Court

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Speaker 2: which has ruled that a former UBS executive can hold

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Speaker 2: on to the majority of his one hundred and thirty

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Speaker 2: feet million pound wealth. This after a court ruling on

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Speaker 2: his divorce. Clive stand who was the CFO at the

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Speaker 2: Swiss Bank, has been embrailed in a more than five

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Speaker 2: year long dispute with his former wife Anna and our

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Speaker 2: legal reporter Luca de Powley, joins us Now for more

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Speaker 2: on this story. Look at why did this fight go

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Speaker 2: on for so long?

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Speaker 7: I guess the simple answer is that there was so

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Speaker 7: much to fight over. Not all divorces are worth taking

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Speaker 7: all the way to the Supreme Court and incurring all

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Speaker 7: those fees. But this is a divorce where one of

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Speaker 7: the assets up for grabs was this huge farm in

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Speaker 7: Australia which had nearly five thousand cattle and about five

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Speaker 7: seven hundred marino sheep. So it's worth paying all of

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Speaker 7: these expensive lawyers to go and fight for them. There's

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Speaker 7: also a few sort of thorny legal issues that were

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Speaker 7: at play here and particular circumstances which made it which

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Speaker 7: made it worth fighting over.

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Speaker 3: Basically, so what did the Supreme Court decide?

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Speaker 2: Then?

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Speaker 3: How are the assets going to be di up?

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Speaker 7: So at the heart of this dispute there is about

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Speaker 7: eighty million pounds worth of assets which were transferred from

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Speaker 7: Clive Standish to his wife Anna in twenty seventeen, not

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Speaker 7: long about three years before the marriage really began to

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Speaker 7: fall apart. The whole point of the transfer was to

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Speaker 7: avoid paying inheritance tax so that they were to die,

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Speaker 7: it would be put into a trust. His wife was

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Speaker 7: a non domicile tax payer, so that meant that they

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Speaker 7: wanted to do this. A lower court ruled that effectively

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Speaker 7: all of those assets were a joint part of the

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Speaker 7: marriage because they had been quote unquote matrimonialized to borrow

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Speaker 7: return from the judges ruling the main source of the

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Speaker 7: wealth might have been the husband, but once it had

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Speaker 7: been gifted to the wife, then it was to be

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Speaker 7: split fifty to fifty. The Supreme Court ruling goes against

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Speaker 7: that and says it's important what the source of the

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Speaker 7: wealth was, but also what the intention was. The intention

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Speaker 7: was to gift the assets to it would be better

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Speaker 7: for their children, not to benefit Anna Standish, And as

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Speaker 7: a result, the husband gets a much large share of

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Speaker 7: the divorce settlement than the wife. The wife only ends

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Speaker 7: up with twenty five million pounds.

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Speaker 2: But it's also why it's an interesting ruling, isn't it

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Speaker 2: that idea of the kind of sourcing of the wealth.

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Speaker 2: But also, I mean, we know London is a setting

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Speaker 2: for a lot of these high net worth divorce cases.

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Speaker 2: Why do people still choose this jurisdiction to have these long,

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Speaker 2: difficult battles.

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Speaker 7: So I guess although this sort of case might go

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Speaker 7: against that, on the whole, London's a really good space

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Speaker 7: for the non earning spouse, much better than a lot

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Speaker 7: of other courts around the world. So if you're looking

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Speaker 7: to take a case, London is a great place to

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Speaker 7: do it from that reason. I mean, the largest divorce

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Speaker 7: settlement we've had in London was four hundred and fifty

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Speaker 7: million pounds, so that was to the non earning spouse,

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Speaker 7: So I mean that's a huge part of why we

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Speaker 7: do here. There's also a load of lawyers here who

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Speaker 7: are set up to do this kind of stuff, and

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Speaker 7: a lot of a lot of billionaires in Mayfair who

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Speaker 7: fall out and then have to go and argue the

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Speaker 7: stuff at the High Court.

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Speaker 3: Look At what does this ruling mean for other divorce

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Speaker 3: cases in the UK? Will it have wider ramifications?

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Speaker 7: So I guess. So, I guess it's kind of hard

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Speaker 7: to imagine how something with one hundred and thirty three

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Speaker 7: million quid might affect a broader group of people. But

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Speaker 7: there's sort of practice of trying in your marriage to

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Speaker 7: avoid incurring too much tax is something that people probably

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Speaker 7: do quite frequently. I mean a lot of people I

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Speaker 7: know they divide up their ice allowances, which is only

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Speaker 7: twenty grand, not one hundred and thirty three million. But

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Speaker 7: so it affects that the ruling didn't bring as much

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Speaker 7: clarity as some lawyers are a hope. Lawyers thought they

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Speaker 7: might get clarity on when marital homes are matrimonialized, and

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Speaker 7: that didn't really come through. So the ruling kind of

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Speaker 7: empowers judges to look at things on a case by

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Speaker 7: case basis, which is important if you think you know,

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Speaker 7: marriages last for different lengths of time, marriages are different

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Speaker 7: forms of partnerships. It's probably no bad thing that judges

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Speaker 7: have discretions to make decisions on a case by case basis.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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