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

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Speaker 2: This is the Bloomberg Day ba Q and podcast. Good morning,

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Speaker 2: It's Monday, the ninth of February. I'm Caroline Hepgat in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today, Kirstarmer's position

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Speaker 3: as UK Prime Minister hangs in the balance after the

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Speaker 3: resignation of his chief of staff.

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Speaker 2: Japan Sana teke Ich triumphs with the biggest post war

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Speaker 2: election victory in the country's history.

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Speaker 3: Plus swatches tough time, the Swiss Watch Giants, and Battle

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Speaker 3: CEO strikes back at activists and skeptics.

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

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Speaker 3: Ker Starmer's advisors are bracing this morning for cabinet ministers

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Speaker 3: to call on the UK Prime Minister to step down.

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Speaker 3: According to officials in Downing Street who spoke to Bloomberg,

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Speaker 3: ministers are likely to threaten resignation if the Prime Minister

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Speaker 3: ignores private appeals to step aside. The increasingly precarious state

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Speaker 3: of Starmer's premiership follows the resignation of his chief of

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Speaker 3: staff yesterday. Morgan McSweeney said he took full responsibility for

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Speaker 3: advising that Peter Mandelson should be appointed as the UK's

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Speaker 3: ambassador to the United States. That's despite Mandelson's known ties

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Speaker 3: to the convicted pedophile financier Jeffrey Epstein. Labor MP Katherine

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Speaker 3: Atkinson says she still supports the Prime Minister.

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Speaker 4: I don't think you come from the humble working class

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Speaker 4: a background that he had become the Director of Public

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Speaker 4: Prosecutions and the Prime Minister by being someone who is weak.

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Speaker 4: I don't think that he will be pushed around. I

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Speaker 4: think that he is focused on the job and I

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Speaker 4: think that he isn't going anywhere.

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Speaker 3: Despite those words from Katherine Atkinson, one advisor to a

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Speaker 3: cabinet minister told Bloomberg it's now fifty to fifty whether

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Speaker 3: Starmer will last the week. The prospect is likely to

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Speaker 3: be focused for guilt markets this morning. Traders could react

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Speaker 3: negatively to a risk as the Prime Minister could be

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Speaker 3: replaced with a leader more inclined towards higher borrowing.

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Speaker 2: The UK's top spies are warning political parties of the

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Speaker 2: dangers posed by foreign interference, ranging from financial donations to honeytraps.

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Speaker 2: Bloomberg's un Pots has the details.

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Speaker 5: First of its kind security briefing was held for officials

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Speaker 5: from all UK political parties last week, led by the

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Speaker 5: director of MI five and the heads of the National

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Speaker 5: Cybersecurity Center. According to the Cabinet Office, political leaders were

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Speaker 5: told how foreign players can deploy funding and investments as

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Speaker 5: tools to gain influence while hiding their true motives, as

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Speaker 5: well as using other tactics including coercion and sex. The

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Speaker 5: briefing comes amid growing concerns about the vulnerability of the

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Speaker 5: UK's democracy to foreign donations and bribes. In London, I'm

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Speaker 5: youwing Pots Bloomberg Radio, Boberger.

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Speaker 3: Has learned the Chinese regulators have advised financial institutions to

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Speaker 3: rein in their holdings of US treasuries, citing concerns over

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Speaker 3: concentration risks and market filatility. The guidance, which was communicated

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Speaker 3: verbally to some of the biggest Chinese banks in recent weeks,

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Speaker 3: reflects growing wariness among officials that large holdings of US

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Speaker 3: government debt may expose banks to sharp swings. The move

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Speaker 3: was framed around diversifying Marcus risk, rather than anything to

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Speaker 3: do with geopolitical maneuvering or a fundamental loss of confidence

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Speaker 3: in US credit worthiness. The directive doesn't apply to China's

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Speaker 3: stateholdings of US treasuries.

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Speaker 2: Now, when it comes to Japan, the Prime Minister of

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Speaker 2: Sanai Takarichi, has secured a historic election triumph, marking her

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Speaker 2: as the most powerful leader in the country's post war era.

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Speaker 2: Takichi's Liberal Democratic Party won a two third supermajority in

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Speaker 2: Sunday's Lower House election, according to the public broadcaster NHK.

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Speaker 2: William Cho from the Hudson Institute says it's a personal

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Speaker 2: mandate for Takichi.

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Speaker 6: Very a large super majority victory ensures that there's at

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Speaker 6: least stability and consistency in her economic policy going forward,

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Speaker 6: and you're now going to see these constant, weavering policies.

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Speaker 2: Jo ads that the resounding win means large amounts of

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Speaker 2: funding for structural changes to Japan's economy, but it might

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Speaker 2: rattle bond markets. Japan's stocks rallied to recordize on the news,

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Speaker 2: and the Japanese yen edged away from the danger zone

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Speaker 2: for intervention.

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Speaker 3: The Italian bank UniCredit has announced plans to return around

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Speaker 3: fifty billion euros to investors over the next five years.

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Speaker 3: It reported fourth quarter net profits which beat expectations of

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Speaker 3: just under two point two billion euros. The bank says

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Speaker 3: it's targeting around eleven billion euros and net profits for

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Speaker 3: the full year this year and thirteen billion by twenty

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Speaker 3: twenty eight.

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Speaker 2: Iran's president Masud Pozeshkian described Friday's nuclear talks with the

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Speaker 2: United States as a step forward. In an online post,

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Speaker 2: The leader said that dialogue has always been our strategy,

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Speaker 2: but added that the regime would not be intimidated. US

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Speaker 2: President Donald Trump has in recent weeks moved large amounts

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Speaker 2: of military power to the region and threatened strikes. Trump

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Speaker 2: called Friday's tours quote very good and said another meeting

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Speaker 2: was set for early this week.

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Speaker 3: And Seattle Seahawks have won the Super Bowl, beating the

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Speaker 3: New England Patriots twenty nine to thirteen. Seattle's running back

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Speaker 3: Kenneth Walker was named MVP following the win. The victory

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Speaker 3: comes in their first Super Bowl appearance since the twenty

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Speaker 3: fourteen season, when they lost to the Patriots twenty eight

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Speaker 3: to twenty four. Meanwhile, the Grammy winning Puerto Rican artist

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Speaker 3: Bad Bunny headlined a visually stunning halftime performance and NBC

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Speaker 3: that also featured appearances by Lady Gaga and Ricky Martin.

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Speaker 3: God bless America. The performance appeared to give only a

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Speaker 3: subtle nod to political tensions, with the rapper holding a

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Speaker 3: football inscribed with the phrase Together We Are America. Writing

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Speaker 3: on social media, US President Donald Trump says that the

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Speaker 3: show was an affront to the greatness of America.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: Let's get to the markets, where the dollar is edging

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Speaker 2: lower on the China Bank story, the Treasury exposure report,

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Speaker 2: and the discussion around limiting Chinese Bank's exposure to US treasuries. Meanwhile,

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Speaker 2: the nick has been surging up this morning by four

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Speaker 2: point three percent after the landslide victory by Takehi. The

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Speaker 2: Japanese yen also strengthening four tenths of one percent. European

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Speaker 2: stop futures are up by half of one percent. Hedge

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Speaker 2: funds are ramping up bearish bets against the pound. S

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Speaker 2: and P five hundred evenily futures are also higher after

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Speaker 2: US stocks roared back on Friday. Remember the S and

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Speaker 2: P five hundred rows by two percent, But goldber Sachs

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Speaker 2: traders warning that US stocks may be face further selling

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Speaker 2: this week. Gold right now is up by one and

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Speaker 2: a half percent. Teny treasury yields adding a basis point

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Speaker 2: to four point two two percent. Those are the markets.

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Speaker 3: In a moment, we're bringing the latest on the political

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Speaker 3: crisis facing cair Starmer, plus the battle for the future

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Speaker 3: of Swatch. But another story that caught our this morning,

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Speaker 3: what determines if you live to one hundred even if

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Speaker 3: you might feel one hundred years old? On this Monday morning,

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Speaker 3: a Blue Opinion columnist FT flams and writing about a

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Speaker 3: recent study which shows that longevity is roughly fifty percent

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Speaker 3: genetic and fifty percent environmental. And that's substantially higher contribution

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Speaker 3: from your genes that earlier research had indicated. So that

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Speaker 3: this doesn't mean you can give up now and essentially

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Speaker 3: stop living well. FT rights that for most of us,

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Speaker 3: it is still a healthy diet, regular exercise, and adequate

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Speaker 3: sleep that will dramatically improve the chances of a longer

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Speaker 3: and crucially healthier life as well. But there are this

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Speaker 3: small group of people who have a combination of genes

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Speaker 3: that slow the aging process, make them less susceptible to

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Speaker 3: diseases like heart disease and cancer as well, and they

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Speaker 3: might be the few that have the chances of living longer. Also,

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Speaker 3: there's a distinction between living well gets you to your eighties,

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Speaker 3: but if you want to make it to one hundred,

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Speaker 3: you know, teens pay a much bigger part.

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Speaker 7: Yeah. I love that story.

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Speaker 2: I mean, I'm pretty wary of all the stuff around

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Speaker 2: kind of biohacking and clean eating and blood transfusions and

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Speaker 2: the kind of extremes that people seem to be going

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Speaker 2: to maybe within a bit of an obsession in terms

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Speaker 2: of immortality, at least amongst the super super wealthy. So

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Speaker 2: I like this data because in some ways.

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Speaker 7: It's about moderation.

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Speaker 2: You can have an impact on longevity, but you know,

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Speaker 2: some things you can't control.

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Speaker 3: Yeah, I mean, the question of you might as well

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Speaker 3: live well if you're going to try and live long

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Speaker 3: as well is a different debate that we'll have another day,

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Speaker 3: I'm sure, but a great piece three this morning Blueberg

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Speaker 3: dot com for it, slash Opinion, and we'll put a

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Speaker 3: linked in our podcast show Notes.

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Speaker 2: Now let's bring you more on the pressure on the

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Speaker 2: British Prime Minister. King Starmer's job is hanging in the

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Speaker 2: balance after his chief of staff resigned over the appointment

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Speaker 2: of Peter Manderson, the UK's ambassadors to the United States.

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Speaker 2: One senior advisor told Bloomberg that it was fifty to

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Speaker 2: fifty whether Sarma would last this week are UK politics

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Speaker 2: Whoreporter James Wilcock joins us now for more what happened

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Speaker 2: over the weekend then that actually led to Morgan McSweeney resigning.

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Speaker 8: I mean, the weight of the Epstein scandal that we

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Speaker 8: have imported to the UK via Peter Madison, the former

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Speaker 8: years ambassador, simply became too.

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Speaker 7: Much to bear.

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Speaker 8: I mean, as a sign of that, all of the

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Speaker 8: UK press bar none have led on this resignation this morning,

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Speaker 8: with many saying it may not be enough to save

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Speaker 8: Starmer's job. And this scandal has come on the back

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Speaker 8: of waves of labor party anger towards Morgan McSweeney from

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Speaker 8: day one. He has his most loyal fans inside the party,

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Speaker 8: but he has always had detractors who argue he is

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Speaker 8: factional and ruthless. And added to that kind of built

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Speaker 8: in reservoir of anger is the promise of more to

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Speaker 8: come as more documents involved in the hiring process and

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Speaker 8: Manderson are set to come out over the next few weeks.

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Speaker 8: That would have further implicated McSweeney, who is star was

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Speaker 8: Starmer's chief of staff which led to over the weekend

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Speaker 8: McSweeney writing that he has resigned and telling Bloomberg among others,

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Speaker 8: that he takes full responsibility for giving the Prime Minister

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Speaker 8: the advice, amongst others to hire Pieter Manderson in the

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Speaker 8: first place.

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Speaker 3: So where does that leave the Prime Minister? Then this

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Speaker 3: Monday morning, James.

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Speaker 8: His job is on a knife edge. I mean as

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Speaker 8: a disclaimer, Stephen, as a journalist, I often feel we

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Speaker 8: shouldn't be sort of pouring fuel on the fire these

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Speaker 8: kind of things. But as someone who's covered when Boris

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Speaker 8: Johnson left office and Liz Truss in Westminster, when you

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Speaker 8: have no cover, in a febrile environment, when your MP's

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Speaker 8: are extremely unhappy, things can move extraordinarily quickly. And McSweeney

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Speaker 8: was the soul of the star More operation. Talking to

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Speaker 8: starm allies last night, one said to me that Starmer

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Speaker 8: has quote no cover. Now, another, who again is Starmer Backer, says,

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Speaker 8: let's see how long for Starmer. In words to me

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Speaker 8: last night and then to our political editor Alex Wickham,

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Speaker 8: he said a to a cabinet minister says it's fifty

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Speaker 8: to fifty Starma last week and number ten officials told Wickham,

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Speaker 8: a political editor, that they are bracing now for cabinet

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Speaker 8: ministers to walk into Number ten and say to Starmer

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Speaker 8: it's time to go. Whether that happens, we're not yet sure.

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Speaker 8: That's just this week. If he makes it through this week,

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Speaker 8: you then have a by election in Manchester in a

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Speaker 8: few weeks time and the local actions which are promising

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Speaker 8: to be disastrous for Labor, and we're already seen as

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Speaker 8: a moment which Starmer's leadership would be put to the test.

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Speaker 2: It was interesting, though, over the weekend I was reading

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Speaker 2: the US press, who are fascinated and slightly scratching their

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Speaker 2: heads as to the impact of the Epstein scandal here

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Speaker 2: in the UK versus in the US. Why is it

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Speaker 2: that the Epstein scandal, which Starmer has nothing to do with,

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Speaker 2: really that appears to have put Starmer more at risk

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Speaker 2: than ever before.

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Speaker 8: I think the first reason is muchally easy, which is

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Speaker 8: that there is already a ground sort of angermux Labor

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Speaker 8: MPs around the direction of Starmar's government policy. U turns

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Speaker 8: the fact he's the most unpopular prime minister in modern

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Speaker 8: political polling, the sort of party management and the approach

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Speaker 8: taken towards it so in many ways that was kind

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Speaker 8: of the sort of oil reservoir that was lit on

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Speaker 8: fire by the scandal. But the reason why the scandal

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Speaker 8: has driven a knife into the heart of star War's

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Speaker 8: government is Starmer Majeor's reputation as the squeaky clean change

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Speaker 8: of like the routine from Boris Johnson. He was the Director

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Speaker 8: of Public Prosecutions, he was a lawyer. He sort of

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Speaker 8: was visibly disgusted by party Gate and the Conservatives, and

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Speaker 8: he was going to be ethics and that that was

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Speaker 8: going to be his entire pitch for prime ministership. In

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Speaker 8: appointing Peter Madison, he overrode the civil service process. He

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Speaker 8: didn't pick a sort of career diplomat. He picked a

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Speaker 8: party loyalist, a politician. He did so against the advice

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Speaker 8: of many of his peers at the time, and in

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Speaker 8: doing so that has then unraveled in a way that

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Speaker 8: seems to be a political decision in a way that

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Speaker 8: for many labor MPs, their biggest fear was always being

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Speaker 8: seen as more of the same, and this scandal has

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Speaker 8: taken that and crystallized it into the sharpest possible repudiation

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Speaker 8: of what Starmer claims to have stood for That is

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Speaker 8: why this morning his own MPs are worrying about his future.

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Speaker 3: Okay, James are uka politic supporter James Wilcock, Thank you,

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Speaker 3: stay with us. More from Bloomberg Daybreak Europe coming up

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Speaker 3: after this.

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Speaker 2: Now, the family that controls the Swiss watch Chance Swatch,

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Speaker 2: which owns Omega, Harry Winston and Laugeen, is resisting an

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Speaker 2: activist campaign amid a challenging market. Joining us now is

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Speaker 2: Switzerland reporter Allegra Katelli on this story. Allego, good to

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Speaker 2: speak to you. Firstly, who is the activist investor then?

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Speaker 2: And why are they focused on Swatch?

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Speaker 1: Hi, Caroline, thanks for having me so. Stevid Wood is

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Speaker 1: an American activist investor. He previously successful campaign at the

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Speaker 1: Italian defense company Leonardo.

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Speaker 7: He's basically arguing that change is needed.

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Speaker 1: He sees value in the company with so many of

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Speaker 1: the iconic brands that you mentioned, but also basically says

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Speaker 1: that the family has an over proportional influence on decision

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Speaker 1: making with forty four percent of voting powers, and he's

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Speaker 1: been in a raw with the company for the past

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Speaker 1: two years trying to change that and trying to represent

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Speaker 1: what are called bearer shareholders onto the board, which right

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Speaker 1: now is you know, most of the members on there

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Speaker 1: have been on there for more than fifteen years. So

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Speaker 1: he's trying to change the highkagemony on the on the group.

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Speaker 7: Now.

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Speaker 3: Nick Kayak is the son of Swatch's founder, benefits from

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Speaker 3: a dual class share listing and he's fighting back.

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Speaker 1: How Yeah, so lately the family has been fighting back.

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Speaker 7: For sure. Last year would try to get on the board.

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Speaker 7: They rejected him on.

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Speaker 1: The premises that he was American and that he's on

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Speaker 1: the board of another company, leonardad as I mentioned earlier,

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Speaker 1: and that didn't really work.

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Speaker 7: Uh, would then suit Swatch on.

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Speaker 1: These premises, saying that that wasn't acceptable and wasn't legal.

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Speaker 7: But yeah, the family has been fighting back.

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Speaker 1: And the latest changes seen this year, including the very.

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Speaker 7: The big reaction.

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Speaker 1: That the market has seen following the results and the

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Speaker 1: bullish outlook that Nick gave for the watch industry, which

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Speaker 1: isn't so widely shared by others in the in the

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Speaker 1: watch market, but also Swatched after after the results, proposed

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Speaker 1: the appointment of a new board member, Andrea as Rickenbacher,

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Speaker 1: to be voted throughout the next AGM in May.

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Speaker 7: That's the first edition to the Board in.

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Speaker 1: That the that the that the company makes in over

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Speaker 1: ten years. After a lot of pushback about the independence

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Speaker 1: of Switch as a board, so it's a little bit

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Speaker 1: more difficult for Wood to argue.

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

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 7: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carroll. Join us again tomorrow morning for all

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Speaker 3: on Bloomberg day Break Europe.