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

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Speaker 1: Daybreak podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Tuesday, the seventh of January. Here in London.

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Speaker 1: I'm Caroline Hepke.

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Speaker 2: And I'm Stephen Carroll. Coming up today, Mark Karney says

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Speaker 2: he's considering running to succeed Justin Trudeau as Canada's Prime minister.

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Speaker 1: UK political parties come together to urge Trump to reconsider

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Speaker 1: his relationship with Elon Musk.

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Speaker 2: Plus Olaf Schultz's bid to reinvent Germany as a chip

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Speaker 2: superpower of flounders after a big setback from Intel, we

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Speaker 2: have a special report.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Mark Karney, the former governor of the Bank of England

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Speaker 2: and Bank of Canada, says he's considering entering the race

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Speaker 2: to replace Justin Trudeau as Canada's Prime minister. Karney, the

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Speaker 2: current chair of Bloomberg's Board of directors, said he's encouraged

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Speaker 2: by support from Liberal lawmakers and backers. Trudeau is i

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Speaker 2: as prime minister after more than nine years in office.

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Speaker 2: He cited his ability his inability to unite his Liberal

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Speaker 2: party while facing declining poll ratings under rebellion from within

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Speaker 2: the party.

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Speaker 3: I have always been driven by my love for Canada,

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Speaker 3: by my desire to serve Canadians, and by what is

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Speaker 3: in the best interest of Canadians. And Canadians deserve a

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Speaker 3: real choice in the next election, and it has become

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Speaker 3: obvious to me with the internal battles, that I cannot

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Speaker 3: be the one to carry the Liberal standard into the

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Speaker 3: next election.

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Speaker 2: Trudeau will remain as Prime Minister until the new leader

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Speaker 2: is selected, it will likely be in March. His decision

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Speaker 2: to step down comes amid mounting discontent over high inflation,

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Speaker 2: weak economic growth, under perceived mismanagement of immigration. Canada's Conservative

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Speaker 2: Party has built a twenty point lead in polls ahead

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Speaker 2: of an election due by October.

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Speaker 1: Nvidia's CEO Jensen Wong, has announced a range of new chips, software,

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Speaker 1: and services as the company looks to maintain its lead

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Speaker 1: in artificial intelligence. Interest in Nvidia's products has exploded as

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Speaker 1: companies rush to use more AI computing gear. Woe spoke

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Speaker 1: to a PACT Arena at the opening of the Consumer

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Speaker 1: Electronics Show in Las Vegas, and so when.

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Speaker 4: You see application after applications that are AI driven AI

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Speaker 4: native at the core of it. This fundamental concept is there.

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Speaker 4: Machine learning has changed how every application is going to

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Speaker 4: be built, how computing will be done, and the possibilities beyond.

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Speaker 1: And you can catch our interview with Nvidia CEO Jensen

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Speaker 1: Wong in a special edition of Bloomberg Technology tomorrow that's

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Speaker 1: at eleven thirty am Eastern Time or four thirty pm

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Speaker 1: here in London.

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Speaker 2: The US has blacklisted ten Cent and contemporary Amperex Technology

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Speaker 2: Limited not as Cattle for alleged links to the Chinese military.

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Speaker 2: Bloomberg's China correspondent minmn Loo says the move puts the

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Speaker 2: target on both China's top electric vehicle battery maker and

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Speaker 2: its most valuable company.

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Speaker 5: It is the heaviest way that's stock in the MSCI,

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Speaker 5: sixteen percent of the index. So any outside move there

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Speaker 5: we're really weigh down on the broader index. And of

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Speaker 5: course question is whether Tencent can recover from this because

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Speaker 5: in the past there has been companies like cell Me

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Speaker 5: for instance, her Size another one that has managed to

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Speaker 5: get themselves off that blacklist, so that is still a

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Speaker 5: possibility as well.

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Speaker 2: Men Menlo ads that both companies say their addition to

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Speaker 2: the blacklist is a mistake. The surprise move comes ahead

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Speaker 2: of Trump's presidency, which is expected to bring an array

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Speaker 2: of new tariffs. The President elect posted on truth Social

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Speaker 2: yesterday to deny a report that he might moderate any

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Speaker 2: plans for across the board tariffs.

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Speaker 1: Facebook's parent company Meta has named three new directors to

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Speaker 1: its board. The list includes UFC CEO and staunch Trump

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Speaker 1: supporter Dana White, who introduced the President elect at this

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Speaker 1: summer's Republican National Convention. Meta founder Mark Zuckerberg has been

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Speaker 1: working to improve his firm's relationship with Donald Trump, including

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Speaker 1: dining with him at Tamara Lago estate in November. With

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Speaker 1: more on the other appointments his Bloomberg's Charlie Pellett.

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Speaker 6: Along with White, the social media company named Charlie Songhurst,

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Speaker 6: an investor and former Microsoft executive who already advises Meta

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Speaker 6: on artificial intelligence products, and John Elkhan, the CEO of Xor,

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Speaker 6: which is a holding company controlled by the Annelli family

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Speaker 6: that has stakes in European businesses including Ferrari Here in

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Speaker 6: New York, Charlie Pellett, Bloomberg Radio.

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Speaker 2: Senior politicians in three of the UK's major parties have

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Speaker 2: verged Donald Trump's allies to reconsider his relationship with Elon Musk.

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Speaker 2: The tech billionaire endorsed far right activist Tommy Robinson and

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Speaker 2: called for Prime Minister cair Starmer to be imprisoned. In

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Speaker 2: a series of posts online, Starmer says a line has

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Speaker 2: been crossed.

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Speaker 7: Those that are spreading lies and in misinformation as far

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Speaker 7: and as wide as possible. They're not interested in victims,

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Speaker 7: They're interested in themselves. Those were cheerleading Tommy Robinson. They're

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Speaker 7: supporting a man who went to prison for nearly collapsing

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Speaker 7: a grooming case.

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Speaker 2: As well as Timer's public rebuke, Bloomberg has learned figures

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Speaker 2: at the top of the Labor government, the Conservative opposition,

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Speaker 2: and the Reformed UK Party have all privately warned Trump's

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Speaker 2: circle that Mosk is damaging the incoming president's reputation in Britain.

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Speaker 2: The complaint is a rare show of unity in the

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Speaker 2: UK when it comes to US politics and Trump representing

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Speaker 2: a combined seventy two percent of the vote.

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Speaker 1: The UK's long term boring costs have come close to

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Speaker 1: their highest level in more than a quarter of a century.

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Speaker 1: That's ramping up pressure on Chancellor Rachel Reeves to keep

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Speaker 1: the market on side ahead of a raft of bond

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Speaker 1: sales this week. Bloomberg's James Walcock has more.

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Speaker 8: When the UK's debt management offer comes to market this morning,

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Speaker 8: it will be the first time since the days of

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Speaker 8: Gordon Brown when thirty year guilts are being issued with

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Speaker 8: an average yield above five percent. That's an eyewatering level

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Speaker 8: for Britain, one not seen since the nineteen nineties bar

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Speaker 8: a sudden spike in the trust era. It's also threatening

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Speaker 8: the government's fiscal rules. The higher cost of debt caused

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Speaker 8: in part by Rachel Reeves's budget and the interest rate

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Speaker 8: environment could force the Chancellor to break her promise and

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Speaker 8: be forced to raise more taxes in London. James Wilcock,

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Speaker 8: Bloomberg Radio.

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Speaker 2: And UK Guilty has closed yesterday at five point one

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Speaker 2: eight percent of the world's biggest hedge fund, Bridgewater Associates,

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Speaker 2: has dismissed seven percent of its workforce. In a letter

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Speaker 2: to investors, Bridgewater said the decision to cut around ninety

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Speaker 2: jobs had been made to maintain a dynamic ecosystem of

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Speaker 2: ideas and innovation. Founded by Ray Dalio, Bridgewater posted double

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Speaker 2: digit returns for most of its strategies last year, with

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Speaker 2: about one hundred and sixty billion dollar Doo's under management

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Speaker 2: as of July.

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Speaker 1: And those are some of our top stories for you

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Speaker 1: this morning. In terms of the markets this hour, so

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Speaker 1: the US dollar yesterday was weakened by nearly a full

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Speaker 1: percentage point after a Washington Post article claiming the limited

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Speaker 1: scope of Donald Trump's tariffs. This morning, the dollar is

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Speaker 1: down another tenth of one percent, and we mentioned in

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Speaker 1: the top stories that article was later denied by Donald Trump.

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Speaker 1: The US dollar recovered somewhat it ended the session, though

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Speaker 1: we can zero point six percent yesterday and again we're

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Speaker 1: down this morning. So that on the dollar. In terms

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Speaker 1: of stop futures this morning, they are looking softer for

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Speaker 1: the US certainly for the NASDAT futures they're down almost

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Speaker 1: two tenths of one percent. Shrugging off a keynote speech

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Speaker 1: from the Nvidia boss Jensen one overnight at CES in

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Speaker 1: Las Vegas, the Hang saying is down this morning one

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Speaker 1: point nine percent and ten cent slumping at seven point

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Speaker 1: four percent this morning. This as the Japanese yen is

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Speaker 1: weak at and EU opinion still futures of down four

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Speaker 1: ten percent in.

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Speaker 2: A moment we'll bring you more on the Canadian politics,

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Speaker 2: plus tell you why German dreams of becoming a semiconductor

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Speaker 2: superpower are now fading. But in the story that caught

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Speaker 2: our eye this morning about Carolyn, we you know, we

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Speaker 2: have a thing about tracking watch prices on this program.

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Speaker 2: Some people are very interested in the prices of the

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Speaker 2: top watch brands.

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Speaker 1: I'm just wondering whether you've got a bonus. Maybe that's

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Speaker 1: spanning a hole in your pocket. Yam told me about.

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Speaker 2: I have a Warner watched since two thousand and six.

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Speaker 6: I love mine.

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Speaker 1: Yeah, look, we do always like to track it blue

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Speaker 1: Big Subdal Watch index. Of course, the news is that

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Speaker 1: the most sought after used watches like you know, Relax

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Speaker 1: and Patic, Philippe and so on, they fell again in

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Speaker 1: twenty twenty four.

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Speaker 2: Yeah indeed, and looking at you know the level, the

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Speaker 2: lowest level in three years from any of the popular

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Speaker 2: models as well. So I mean Rolex models down about

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Speaker 2: five percent during the year. Patok Polipe price is down

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Speaker 2: about four percent as well. This is all based on

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Speaker 2: the sort of the sub dial what trading platform that

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Speaker 2: the tracts the price for the second hand watches as well,

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Speaker 2: So I mean over two years. You're talking about Bloomberg

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Speaker 2: subdial index being dead about thirteen percent.

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Speaker 1: Yeah, significant job. I suppose there was a big bump

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Speaker 1: also post pandemic. During the pandemic, I suppose, and lockdowns

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Speaker 1: of people looking for those time pieces. Anyway, nice story

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Speaker 1: on the Bloomberg terminal.

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Speaker 2: That's bringing more now. In our top story this morning,

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Speaker 2: Mark Carney says he's considering running to succeed Justin Trudeau,

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Speaker 2: who is resigning as Canada's Prime minister after more than

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Speaker 2: a year of week polling numbers. Other potential candidates include

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Speaker 2: Christia Freeland and Dominique LeBlanc, who replaced her as Finance minister.

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Speaker 2: Joining us now to discuss is Bloomberg's executive editor for Canada,

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Speaker 2: Derek d'cluet, who's in Toronto for US. Derek, thanks for

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Speaker 2: joining us. Who then has the best chance of succeeding

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Speaker 2: Justin Trudeau.

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Speaker 9: It's bitterly to say, and it's hard to know, but

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Speaker 9: the biggest names in this race would seem be Mark Carney,

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Speaker 9: as you mentioned, and Christian Freeland, who is the former

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Speaker 9: Finance minister and the former deputy Prime minister who really

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Speaker 9: set today's events in motion. Just before Christmas when she

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Speaker 9: resigned and published this scathing resignation letter that essentially accused

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Speaker 9: Trudeau of not taking Donald Trump's trade threats seriously enough,

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Speaker 9: and that is something from which Trudeau could not recover.

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Speaker 9: So those are the biggest names, but there are other

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Speaker 9: members of Trudeau's cabinet who will be taken seriously in

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Speaker 9: the Liberal leadership contest. One of them is the Foreign Minister,

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Speaker 9: Melanie Jolie. It's been involved in, you know, lots of

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Speaker 9: hot files, like the Ukraine obviously, the Israel Gaza conflict.

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Speaker 9: Dominic LeBlanc is a very well respected Liberal who's now

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Speaker 9: the Finance minister who replaced Christian Freeland, is thought to

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Speaker 9: be interested. And then there are some even lesser known

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Speaker 9: candidates such as Chris D. Clark, who's the ex Premier

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Speaker 9: of British Columbia but had a fairly successful run at

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Speaker 9: that in charge of that province and is said to

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Speaker 9: be exploring this. So there will be there will be

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Speaker 9: a lot of interest because it's not a job that

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Speaker 9: comes open very often.

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Speaker 1: Absolutely, I suppose why did Trudeau resign in the end.

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Speaker 1: I mean, the polling numbers have been bad for a

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Speaker 1: long time, but what do you think sort of pushed

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Speaker 1: him too that final decision.

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Speaker 9: Well, his party essentially forced him to. I mean, it's

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Speaker 9: one thing when your polling numbers are bad and it's

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Speaker 9: two years till the next election. It's another thing when

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Speaker 9: the polling numbers are bad and it's only a few

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Speaker 9: months till the next election. There are one hundred and

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Speaker 9: fifty three Liberal members of Parliament and dozens wanted him gone,

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Speaker 9: and some of them were quite open about it. One

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Speaker 9: member of parliament said he would be delusional if he stayed.

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Speaker 9: Others said it would it was totally not tenable for

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Speaker 9: him to try to run another election, and so essentially

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Speaker 9: the political support that he had within his own party

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Speaker 9: had just leached out from underneath him and there was

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Speaker 9: there was no way he could carry on.

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Speaker 2: This is happening, of course, when we are also watching

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Speaker 2: events across the border in the United States and the

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Speaker 2: inauguration of Donald Trump due in the next couple of weeks.

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Speaker 2: I mean, what are likely to be the big issues

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Speaker 2: in this leadership race, and is the threat of tariff's

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Speaker 2: likely to be high among them?

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Speaker 9: I think it's probably the number one issue. I mean,

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Speaker 9: it is hard to think of a of a current

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Speaker 9: economic issue that is more pressing than that one twenty

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Speaker 9: five percent tariffs, if the Trump administration were to carry

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Speaker 9: that through, would be very harmful of the Canadian economy,

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Speaker 9: and which you know about seventy five percent roughly. If

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Speaker 9: Canadian exports, you know, go to the US, and there

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Speaker 9: are a whole bunch of pretty important sectors for which

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Speaker 9: there's not a lot of alternatives. The vast majority of

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Speaker 9: the cars that cars and trucks the Canada builds, you know,

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Speaker 9: go to the US, the vast majority of the oil,

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Speaker 9: and you know a lot of the natural resources. Just

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Speaker 9: the geographic proximity is such that Canada has become very

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Speaker 9: reliant on this trade. So it's it's going to be

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Speaker 9: the number one issue, I think, particularly as Trump seems

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Speaker 9: so serious about carrying out with his tariff threats.

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Speaker 1: Yeah, indeed, And so what is going to happen next

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Speaker 1: you think in terms of that leadership race, as you say,

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Speaker 1: many months away from the deadline to hold a national

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Speaker 1: election in Canada. So where do you think things are

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Speaker 1: going to go now?

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Speaker 9: Well, I mean the Liberal Party has to set out

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Speaker 9: rules in a date and a process and for how

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Speaker 9: they're going to choose the new leader, and then all

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Speaker 9: these candidates I mentioned, they're going to have to make

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Speaker 9: decisions really fast. Typically, when when the Liberal Party is

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Speaker 9: not in power and it wants to choose a new leader,

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Speaker 9: it will take like a year to do. So it's

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Speaker 9: only got a couple of months to get the job done,

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Speaker 9: to have debates and for these candidates to center the

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Speaker 9: platform of why people should vote for them and sort

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Speaker 9: of return to the Liberal brand it is. It's a

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Speaker 9: big challenge. So they will have to have that leadership

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Speaker 9: contest by probably the middle of March, and we could

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Speaker 9: be into a national election as early as potentially April

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Speaker 9: or May.

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Speaker 2: Okay, Derek, thanks so much for joining us. That's Direktor

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Speaker 2: Clue out there in Toronto, Bloomberg's executive editor for Canada.

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Speaker 1: Now, let's send our attention to Germany. Olaf Schultz's aim

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Speaker 1: to reinvent Germany as a chip superpower is foundering after

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Speaker 1: a big setback from Intel. Now voters are expected to

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Speaker 1: punish his failure to build firm foundations for economic growth

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Speaker 1: in the country. It's the subject of a deep dive

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Speaker 1: on the Bloomberg terminal today and joining us now as

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Speaker 1: Bloomberg's German Finance and Economy ministry reporter Camille Kevi who

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Speaker 1: joins US. Now, Camille, great to have you on this story.

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Speaker 1: Why did you give this story to sort of highlight

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Speaker 1: the issues of Earl of Schultz's government.

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Speaker 10: Yeah, well, the hi guys. Firstly, good morning from Berlin. Well,

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Speaker 10: the starting point of the story is kind of the

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Speaker 10: largest foreign investment ever made in Germany. Were pretty billion euros, right,

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Speaker 10: so at least that's what everyone thought. It's the US

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Speaker 10: company Into announced to build one of its chip factories

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Speaker 10: in eastern Germany. It's a structurally weak region that was

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Speaker 10: under Soviet occupation quite some time, and we decided we

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Speaker 10: decided for this story. It is because all of Schultz,

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Speaker 10: Germany's chancellor. He put a lot of political capital on

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Speaker 10: this project, and there was a lot of taxpayers money,

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Speaker 10: like we're ten billion, and there was hardly a speech

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Speaker 10: in which he didn't mention this, this this investment in Germany.

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Speaker 6: And rightly so.

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Speaker 10: I mean, chips are essential for our digitalized squad rides

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Speaker 10: and they are building in everyday devices like washing machines, cars,

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Speaker 10: smart forms, and are also essential for the future like

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Speaker 10: technology AI. Yeah, but that and in some points the

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Speaker 10: news broken and Intel announced that due to its economic problems,

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Speaker 10: it would pass the construction of the factory in Germany.

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Speaker 10: And and almost everyone in the industry says that the

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Speaker 10: company wants continue to build it and that was the

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Speaker 10: end of the chancellor stream to build a chip cluster

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Speaker 10: in eastern Germany.

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Speaker 2: So is this can the blame for those really be

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Speaker 2: pinned on Olaf Schaltz then, or is this just an

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Speaker 2: economic decision being made by Intel?

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Speaker 10: Intel CEO had Gelsinger. He miscalculated and he actually had

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Speaker 10: to leave the company, as you may know, and the

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Speaker 10: chip industry, like many others, is dependent on economic cycles,

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Speaker 10: right one them to dem and the hire for chips

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Speaker 10: on tim lower. But it's it's not only but that

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Speaker 10: there were like a few of red flags right that

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Speaker 10: the industry, you knew about the problems that that Intel had.

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Speaker 10: They had found technology behind technologically compared to its competitors

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Speaker 10: like C and And secondly, it was also very very

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Speaker 10: hard decision, let's say, seen by the German media very

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Speaker 10: critically that that he paid. He was ready to pay

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Speaker 10: ten billion euros for just one US company and in

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Speaker 10: times of really tight budgets, I mean they had to

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Speaker 10: cut costs for social spending at some point or they

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Speaker 10: planned to that was within the negotiation, and then you

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Speaker 10: paid like ten billion for one company. And so it

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Speaker 10: was a very very critical view of debt. Yeah.

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Speaker 1: Absolutely, But with the loss of this what does it

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Speaker 1: mean for Germany and for Europe? We know the difficulties

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Speaker 1: that the German industry has been under. Are there alternatives?

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Speaker 1: What are the next steps?

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Speaker 10: Yes, it's definitely a major setback for Germany. It was

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Speaker 10: the great jobs and then to to cushion the loser

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Speaker 10: of the former industries like the coal mining. And we

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Speaker 10: also have to think of the security issues. For example,

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Speaker 10: think of the Corona crisis, which which led to supply

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Speaker 10: chain problems and major comkers very important for Germany's economy,

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Speaker 10: like Volkswagen, BMW and the UDI. They have been unable

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Speaker 10: to complete the cars because of of the lack of

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Speaker 10: JIP supply and and or thing of Taiwan. You never

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Speaker 10: know if when or if China will attack it. And

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Speaker 10: then there's the headquarters of TSMC, the biggest chip producing

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Speaker 10: the world. So it's not only an issue of of

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Speaker 10: of growth. Germany is like not growing as the second

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Speaker 10: conserve here in four. So it's also a security issue

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Speaker 10: and that's bad for Germany, it's bad for Europe.

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Speaker 2: What about the subsidies that were involved in this Ten

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Speaker 2: billion euros had been allocated for this Intel project, and

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Speaker 2: I suppose does it leave any alternatives for the German

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Speaker 2: government in trying to find somebody else to make this

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Speaker 2: sort of investment.

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Speaker 10: Yeah, they're trying, but with less money because they don't

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Speaker 10: have it anymore. They actually use the ten billion to

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Speaker 10: plug budget holes. Actually it was so practical that we're

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Speaker 10: into we're drawing was good for Shorts in a way

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Speaker 10: that he was able to plug some budget holes. But

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Speaker 10: you know that's just short term and not long term perspective.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 5: Europe