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

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Speaker 2: This is the BlueBag Day BAQ podcast. Good morning, It's Tuesday,

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Speaker 2: the third of February. I'm Caroline Hepga in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today the one

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Speaker 3: point twenty five trillion dollar moonshot marriage. Elon Musk combines

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Speaker 3: SpaceX and Xai in a bet on the future of

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Speaker 3: artificial intelligence.

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Speaker 2: The UK government warns the EU's made in Europe push

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Speaker 2: could cost British firms billions plus.

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Speaker 3: Nigel Farage has long struggled in pro EU Scotland, but

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Speaker 3: his populist Reform UK Party is gaining traction. We have

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Speaker 3: a special report.

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Speaker 4: Let's start with the roundup of our top stories.

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Speaker 3: Elon Musk has announced that he's combining SpaceX and Xai

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Speaker 3: in a deal that values the enlarged entity at one

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Speaker 3: point two five trillion dollars. In a statement on SpaceX's

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Speaker 3: website signed by Musk, the rocket firm said it required

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Speaker 3: XAI to form the quote most ambitious vertically integrated innovation

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Speaker 3: engine on and off Earth. The deal brings together two

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Speaker 3: of the largest closely held companies in the world. Brook's

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Speaker 3: m and A correspondent Ryan Gould says it's possible Mosk

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Speaker 3: could also be eyeing a tie up with Tesla in

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Speaker 3: the future.

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Speaker 5: Elon's view is that we're going to have data centers

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Speaker 5: in space, and part of this is about putting compute

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Speaker 5: and the idea of space exploration and sort of expression

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Speaker 5: of the universe together. This is clearly part of his vision.

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Speaker 5: There is a very good quote that kind of encapsulates

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Speaker 5: a lot of this, which is what he wrote, i

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Speaker 5: think late last year, which is that in some ways

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Speaker 5: his companies, his three companies, Tesla, SpaceX, and Xai, are

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Speaker 5: going to come together. Theyre going to convert and maybe

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Speaker 5: this is kind of the first leg of the store

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Speaker 5: that we're now.

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Speaker 3: Seeing spin Brooks Ryan Gould. The combined SpaceX firm is

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Speaker 3: still expected to go public later this year. As the

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Speaker 3: world's richest man looks too increasingly costly bets on artificial

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Speaker 3: intelligence and space exploration.

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Speaker 2: President Trump and Prime Minisiner Andramodi, I've agreed a surprise

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Speaker 2: deal to slash US tariffs on India. American levies on

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Speaker 2: Indian goods are being cut from twenty five down to

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Speaker 2: eighteen percent, while an additional twenty five percent punitive duty

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Speaker 2: tied to purchases of Russian oil is being scrapped. Writing

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Speaker 2: on social media, President Trump said India had agreed to

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Speaker 2: buy five hundred billion dollars of US goods and holds

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Speaker 2: creude purchases from Russia as part of the deal. Speaking

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Speaker 2: to Bloomberg, India's Chief Economic advisor, Ananta Nagazwaran, hailed the

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Speaker 2: boost to Indian markets and the economy.

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Speaker 6: This was something that was one big stumbling blot of

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Speaker 6: sentiment in the capital market and also for the Indian lup,

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Speaker 6: as you pointed out. So I'm not surprised that the

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Speaker 6: reaction is very positive in both these markets.

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Speaker 7: And I mean, at the end of the day, it

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Speaker 7: is the.

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Speaker 6: World's biggest consumption market twenty one trillion dollars of GDP,

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Speaker 6: and therefore to be able to have access to it

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Speaker 6: is important.

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Speaker 2: That was India's chief economic advisor and nagus Warren. At

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Speaker 2: eighteen percent, India's tariff is now lower than most Southeast

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Speaker 2: Asian countries.

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Speaker 3: Precious metals are recovering some of their losses today after

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Speaker 3: plunging from record highs over the past few days. Spot

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Speaker 3: gold climbed as much as four point two percent after

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Speaker 3: falling by close to five percent yesterday, silver rising as

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Speaker 3: much as eight point one percent, erasing the previous day's

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Speaker 3: loss before pairing those gains. Bloomberg's Brandan Fagan says, it

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Speaker 3: appears the worst of the selloff is over.

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Speaker 8: The constructive thing is holding those key moving averages. It

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Speaker 8: may suggest that systematic traders are stepping in to start

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Speaker 8: nibbling after quite the washout we had, but like I said,

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Speaker 8: you never really want to catch a falling knife here,

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Speaker 8: so there could be more to come. But it seems

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Speaker 8: like the worst is behind us and where we held

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Speaker 8: is relatively constructive.

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Speaker 3: Bloomberg's brandan Fagan was speaking after investors had been piling

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Speaker 3: into gold and silver over recent weeks, driven by renewed

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Speaker 3: concerns about geopolitical upheaval, currency debasement, and threats to the

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Speaker 3: federal reserves independence.

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Speaker 2: The UK's Metropolitan Police says that it's reviewing reports that

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Speaker 2: Peter Mandelson committed misconduct in public office following the latest

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Speaker 2: release of Epstein files. Documents appeared to show that the

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Speaker 2: former UK ambassador to the US leaked sensitive government information

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Speaker 2: to the convicted sex offender while serving as a minister

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Speaker 2: in Gordon Brown's labor government with more his Bloomberg's Chris Pitt.

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Speaker 7: The file suggests Mandelson emailed Epstein about the European Union's

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Speaker 7: rescue facility for struggling member states, telling him the deal

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Speaker 7: should be announced tonight. The emails are dated May ninth,

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Speaker 7: twenty ten. The following day, European policymakers announced a five

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Speaker 7: hundred billion euro loan plan, which prompted the Euro's biggest

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Speaker 7: rally in two years. The documents also show that in

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Speaker 7: two thousand and nine, mandelsoen forwarded internal Downing Street emails

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Speaker 7: about tax policy proposal to Epstein. Mandelsson has not responded

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Speaker 7: to the latest delegations, however. In an interview with The

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Speaker 7: Times carried out last week but published on Monday, he

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Speaker 7: referred to a quote handful of misguided historical emails which

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Speaker 7: he deeply regrets sending in London Chris Pitt Bloomberg Radio.

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Speaker 3: The latest revelations from the Epstein files come as a

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Speaker 3: lawyer for Bill and Hillary Clinton said they will now

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Speaker 3: appear before a congressional committee investigating the disgraced financier. A

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Speaker 3: full vote in the US House of Representatives had been

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Speaker 3: planned this week to hold the former president and former

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Speaker 3: Secretary of State in criminal contempt if they continued to

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Speaker 3: defy subpoenas in their inquiry. Pul Clinton has previously stated

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Speaker 3: that he parted ways with Epstein many years before his

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Speaker 3: death and he has no knowledge of his crimes.

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Speaker 2: France's Parliament has adopted a budget for twenty twenty six

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Speaker 2: after the prime minister survived to no confidence votes. The

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Speaker 2: new legislation has smaller spending cuts and tax increases than

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Speaker 2: earlier proposals, meaning that the deficit for the year will

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Speaker 2: be larger than initially planned, but the concessions mean that

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Speaker 2: Prime Minister Sebasil l'cornu has avoided the fate of his predecessors,

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Speaker 2: who were both forced to resign by the National Assembly

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Speaker 2: in disagreements over austerity measures. The French budget adoption is

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Speaker 2: expected to bring more political calm as opposition parties shift

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Speaker 2: their focus to municipal elections in March and then the

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Speaker 2: French presidential vote in twenty twenty seven.

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Speaker 3: The British government is becoming concerned that a protectionist push

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Speaker 3: being discussed by the European Union could exclude British companies.

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Speaker 3: The UK is lobbying the EU against restricting market access

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Speaker 3: and encouraging cooperation. Bluebriks Tea Adebayo has the story.

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Speaker 9: Made in europe An initiative designed to transform the EU's

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Speaker 9: manufacturing sector, but one that could be costing British firms

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Speaker 9: billions of pounds. The Prime Minister and his government are

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Speaker 9: stepping in for fears possible industrial policy changes could damage

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Speaker 9: firms with sites in both Britain and Europe. Bloomberg understands

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Speaker 9: carmakers Delantis, BMW and Volkswagen could all be affected. It's

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Speaker 9: thought the fresh concerns have driven Keir Starmer's recent bid

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Speaker 9: to take the UK closer to the EU Single Market.

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Speaker 9: The fears are likely to have been at the top

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Speaker 9: of the agenda when the European Commissions, Trade and Economy

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Speaker 9: chiefs visited London yesterday for meetings in London. Teaware at

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Speaker 9: a bio Bloomberg Radio.

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Speaker 2: And those were a few of our top storys for

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Speaker 2: you this morning. Right, Let's get to the markets right now.

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Speaker 2: So after a volatile three days in gold markets, we

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Speaker 2: actually see Spot billion prices up this morning by three

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Speaker 2: and a half percent. India's sen Sex after the trade

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Speaker 2: agreement between Mody and Trump up three percent this morning

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Speaker 2: and Barney Group seeing some relief. South Korean stocks also

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Speaker 2: hitting a record high on Tuesday, Samsung Electronics having the

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Speaker 2: biggest gain, as much as eleven percent, the biggest game

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Speaker 2: since two thousand and nine. RBA down in Australia, the

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Speaker 2: Central Bank there raised interest rates. So some disparate stories

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Speaker 2: to think about, but really important as we look at

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Speaker 2: stock futures for Europe which are reasonably positive, off about

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Speaker 2: three tens of one percent, and we have a softer

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Speaker 2: dollar US dollar on the Blomberg Dollar Spot Index a

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Speaker 2: week at about two tenths of one percent.

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Speaker 3: Stephen Well in a moment more on Elon Musk's deal

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Speaker 3: to merge SpaceX and Xai, plus why Nigel Faraj has

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Speaker 3: reform UK parties hoping for a breakthrough in Scotland's upcoming

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Speaker 3: parliamentary elections. But in the story that caught our eye

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Speaker 3: this morning, on the rise of the martini. Good morning

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Speaker 3: if you're just listening to us as you've gotten out

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Speaker 3: of bed and you're already thinking about drinks. Catodell has

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Speaker 3: been writing about Bloomberg. Writing for Bloomberg, pursueds about how

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Speaker 3: martinis are appearing on more menus than ever, not just

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Speaker 3: New York. It's a London phenomenon to Hawksmore has its

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Speaker 3: own martini bar in one of its London locations as well,

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Speaker 3: and this is even though people are drinking less overall.

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Speaker 3: The restauranteurs that Cat spoke to said that it's when

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Speaker 3: people are drinking they want to both make it count

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Speaker 3: and have something that's particularly good. So she's been looking

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Speaker 3: at some of the you know, the twists that these

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Speaker 3: restaurants are offering, ginger and jalapeno chili, Brian and coriander,

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Speaker 3: a splash of sherry partly.

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Speaker 4: Rarely for that.

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Speaker 2: Yeah, no, it's too early for that in the morning,

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Speaker 2: I think, and what and slightly weird additions. I suppose

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Speaker 2: that maybe they're quite easy to make. The martinis is

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Speaker 2: the point, and you know, quick to serve, and they've

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Speaker 2: probably got a sizeable mark up. But yeah, I don't

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Speaker 2: think I fancy Brian Martini.

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Speaker 7: I mean it could work.

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Speaker 3: I'm a Martini fan and I had my favorite spots

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Speaker 3: in London, so I'm still on serving. I have a

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Speaker 3: very good friend coming to visit who loves of Martini.

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Speaker 3: As we'll be checking out some of the Brussels options

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Speaker 3: in the coming days as well. But you can read

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Speaker 3: Catodell's piece at Bloomberg dot com and we'll put a

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Speaker 3: link to in our podcast show notes.

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Speaker 2: Now, let's bring you more and what's happening on the

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Speaker 2: market then today with equities were regaining their footing after

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Speaker 2: yesterday's sell off, gold and silver prices of covering too,

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Speaker 2: and we've had the big news of that merger in

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Speaker 2: the AI space elon Musk's SpaceX and Xai combining our markets.

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Speaker 2: Live Managing Editor Christina Quino joins us now in the

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Speaker 2: London radio studio.

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Speaker 4: Nice to see you.

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Speaker 10: Thank you for having me, Caroline.

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Speaker 2: So let's start on the deals new SpaceX acquiring Xai,

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Speaker 2: these two companies in the Musk universe. What is the

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Speaker 2: significance of this deal? It is huge numbers.

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Speaker 10: Yeah, absolutely, Caroline.

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Speaker 1: I mean I suppose, because you point it out that

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Speaker 1: it is all in the Musk universe is perhaps quite

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Speaker 1: symbolic more than anything. But I think this really just

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Speaker 1: speaks to you, this idea that if you're involved in

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Speaker 1: anything AI at the moment, then investors will be paying

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Speaker 1: attention in you know, especially with a figure this much,

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Speaker 1: one point twenty five trillion.

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Speaker 10: Dollars, right.

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Speaker 1: I mean this probably has a lot of implications for

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Speaker 1: Elon Musk specifically because you know, he'sa need a world's

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Speaker 1: richest person at the moment, and so kind of this

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Speaker 1: opportunity to consolidate resources and perhaps get more of a

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Speaker 1: solid footing into the AI space could be beneficial for him,

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Speaker 1: and certainly investors are likely to take that as a

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Speaker 1: positive at least at first.

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Speaker 10: Blush.

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Speaker 3: Yeah, if you're interested about where SpaceX and XAI could

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Speaker 3: be working together, we have an episode of the Year's

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Speaker 3: Why podcast looking at data centers in space that's available

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Speaker 3: for download now. But Christine, let's turn to the broader

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Speaker 3: moves that we're seeing on markets. Recovery in precious metals

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Speaker 3: today and Asian equities rallying too. It looks like we're

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Speaker 3: coming back from that cliff we were plunging over yesterday.

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Speaker 10: Yeah, absolutely, Steven.

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Speaker 1: I mean January was really just such a challenging time

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Speaker 1: for risk sentiment and risk assets generally, and coupled with

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Speaker 1: the rally that we've seen in metals, where we sort

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Speaker 1: of saw this phenomenon where gold and silver, usually seen

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Speaker 1: as a haven asset suddenly acting more like risk assets

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Speaker 1: just because of the speculative speculative trade there has gotten

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Speaker 1: really really hot, and so yeah, we saw kind of

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Speaker 1: toward the end of January a bit of an upheaval

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Speaker 1: in that space, rippling across the rest of the market's complex.

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Speaker 1: But a little bit of normalization now, especially also as

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Speaker 1: markets have had some time to digest now things like

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Speaker 1: the Kevin Walsh nomination for the FED chair and what

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Speaker 1: could that mean moving forward for the rates path in

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Speaker 1: the US and beyond.

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Speaker 2: We've also been talking about President Trump slashing tariffs on India.

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Speaker 4: What is the market reaction to that beane?

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Speaker 1: I mean, obviously a positive again at first glance, especially

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Speaker 1: because the US India relationship has not been without their

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Speaker 1: issues over the past year, and that's something of course

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Speaker 1: that both countries, particularly India, was probably keen on getting

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Speaker 1: settled sooner rather than later, and so the fact that

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Speaker 1: there seems to be an initial accord here definitely a positive.

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Speaker 1: We're certainly seeing that in the Indian stock market today.

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Speaker 10: Of Course, as always with these trade.

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Speaker 1: Deals, the devil will be in the details in terms

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Speaker 1: of the time frame for the actual implementation what that's

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Speaker 1: going to look like. As we know from the UK

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Speaker 1: Zone experienced, trade deals actually take years to negotiate in

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Speaker 1: and settle, and so even though we do have some

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Speaker 1: initial pronouncements from President Donald Trump as well as injured

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Speaker 1: Prime Minister Modi on social media, there's a few more

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Speaker 1: steps between there and an actual trade deal.

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Speaker 3: Okay, Christine, thanks so much for joining us. Christina Quino,

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Speaker 3: our Markets Live managing editor, Stay with us. More from

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Speaker 3: Bloomberg Daybreak Europe coming up after this.

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Speaker 2: We are building up to the May elections here across

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Speaker 2: the UK, including in Scotland, the parliamentary elections in May,

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Speaker 2: which are shaping up to be the first major test

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Speaker 2: of Najafarager's ability to sort of translate his popularity in

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Speaker 2: to vote. Reform UK has vaulted to the top of

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Speaker 2: the opinion polls. It's a really big question and I

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Speaker 2: just fascinated by the piece that Jacob Reid has put

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Speaker 2: out this morning on the elections to Holyrood, which is

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Speaker 2: the parliament in Scotland on the seventh of May. It's

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Speaker 2: going to be a massive test for Farage to see

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Speaker 2: whether he can do better with Reform UK than the

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Speaker 2: Conservatives and the Labor Party. I mean, trying to challenge

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Speaker 2: the SMP. The Scottish National Party is potentially going to

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Speaker 2: be very difficult to beat them, but it will be

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Speaker 2: quite an interesting moment. So that's why we thought it

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Speaker 2: would be interesting to speak to James Ludden, who is

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Speaker 2: our newsdesk managing editor and joins us now from Edinburgh.

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Speaker 2: Very good to speak to you, James. So how has

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Speaker 2: Reform actually been performing in Scotland and what are their

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Speaker 2: ambitions for this election. Farage has been very pointed in

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Speaker 2: saying how important these May elections are.

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Speaker 11: Yes, it's a first genuine test, you could say, for

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Speaker 11: far in the current cycle Scotland, as you say, go

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Speaker 11: see elections in May, and it's the first time he

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Speaker 11: really has to put his credentials on the table. So

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Speaker 11: here in Scotland eighteen months ago his party was nowhere

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Speaker 11: in the general election. But what's changed since is that

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Speaker 11: Labor has kind of created really and Farass party is

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Speaker 11: tapping into that sense of malaise that people just don't

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Speaker 11: think they're being listened to. And h he's a very

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Speaker 11: skilled operator and that he's talking the people's language, but

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Speaker 11: he's short on policies. But when it comes to emotion

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Speaker 11: it seemed to be resonating.

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Speaker 3: Yeah, and for this piece, our team hasn't speaking to

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Speaker 3: voters in the fishing port of Peterhead as well. And

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Speaker 3: this is the question of fishing, of course, was central

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Speaker 3: to the brags of debate and Scotland overwhelmingly voted to

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Speaker 3: remain in the EU. But how is Nigel Farage and

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Speaker 3: his party helping to gain popularity in that area.

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Speaker 11: Yeah, it's an interesting case because it is the largest

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Speaker 11: fishing port that this country has, and you do think

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Speaker 11: that if for ours can't cut it in Peterhead, then

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Speaker 11: he probably can't cut it anywhere in Scotland. It looks

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Speaker 11: very much like it's running neck and neck between Reform

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Speaker 11: UK and the SNP. And again, as I was saying,

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Speaker 11: it's not so much an immigration kind of calling card

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Speaker 11: that he's letting on people's doorsteps. It's more again it's

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Speaker 11: a sense of God, you know, no one listens to us.

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Speaker 11: We're stuck in the northeast Scotland and nothing's a really happening,

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Speaker 11: and it's a powerful cocktail for sort of disaffected people.

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Speaker 5: You know.

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Speaker 11: Is he going to translate that nationally in Scotland that's

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Speaker 11: the big question. I mean, there are a couple of

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Speaker 11: factors that you should remember about Pharaohs. One, he's obviously

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Speaker 11: English and that doesn't necessarily go down particularly brilliantly with

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Speaker 11: some people in Scotland. And he's very much also part

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Speaker 11: of the establishment, even though he might claim that he's not.

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Speaker 11: He's a privately education guy from the Home Counties and

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Speaker 11: that also doesn't necessarily translate so well. But you know

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Speaker 11: he is talking the local language. Yes they did. It

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Speaker 11: was the strongest pro Brexit part of Scotland, which in

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Speaker 11: the country of Scotland was very much anti Brexit. So yeah,

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Speaker 11: you do think that if he can get it going

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Speaker 11: in Peterhead, should I say, if he can't win in Peterhead,

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Speaker 11: then he's probably toast elsewhere.

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Speaker 2: Yeah, that's really interesting, isn't it. The kind of contrast there.

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Speaker 2: What do you think it means then for the SNP

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Speaker 2: and for labor, Because as you say, tapping into kind

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Speaker 2: of dissatisfaction maybe cost of living issues or job issues

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Speaker 2: or you know, those kind of bread and butter voter

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Speaker 2: issues is one thing. What does it mean for the

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Speaker 2: Scottish National Party and for labor.

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Speaker 11: I'll start with this labor first. I mean, there has

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Speaker 11: been some chat that the last thing that the Labor

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Speaker 11: Party here needs is for Starma to come up and

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Speaker 11: help campaigning, because he doesn't resonate at all up here

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Speaker 11: at the moment, and you could argue even elsewhere in

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Speaker 11: the UK. And part of the reason that people don't

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Speaker 11: necessarily go for Starma and therefore the Labor Party is

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Speaker 11: again that Starma is a child of the Home Counties.

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Speaker 11: He's from Reigate, which you know is hundreds of miles away.

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Speaker 11: And it's that sort of again idea that theyby isn't

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Speaker 11: really a party that looks after me. The SMP they

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Speaker 11: are the people in power and there is always a

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Speaker 11: thought that SMP will give people a voice. They might

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Speaker 11: not necessarily agree with their independence to remit, but this

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Speaker 11: idea that they do actually have the voice of Scotland

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Speaker 11: is quite a powerful one. Again, if you think back

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Speaker 11: to eighteen months or so before the last election, the

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Speaker 11: general election, the SMP was the third biggest party in

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Speaker 11: Parliament and that gave them a certain voice and it

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Speaker 11: did mean that, for instance, when Sunak was on the

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Speaker 11: dispatch box in the House of Commons, then the SMP

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Speaker 11: had the right to reply and would make stand up

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Speaker 11: and make comments. That was very popular with a hardcore

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Speaker 11: or Scott because you're sticking it to England a bit

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Speaker 11: so recently hasn't had a huge successful time up here

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Speaker 11: when it comes to managing the economy. The economy isn't

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Speaker 11: doing great, but again you could argue that's the same

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Speaker 11: for maybe the North of England or central England, but

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Speaker 11: they do have that reputation of having the average Scott's

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Speaker 11: interest very much at heart.

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Speaker 3: This is Bloomberg Daybreak Europe. You're morning brief on the

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