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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. They say it's the

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Speaker 1: Bloomberg Daybreak.

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Speaker 2: Youurate podcast available every morning on Apple, Spotify or wherever

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Speaker 2: you listen. It's Thursday, the twenty second of August in London.

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Speaker 2: I'm Stephen Carroll coming up today. Exclusive reporting finds some

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Speaker 2: banks got crucial US jobs data first after the report's

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Speaker 2: publication was delayed. Tim Walls delivers a pep talk for

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Speaker 2: enthusiastic Democrats as he accepts the party's nomination for vice president.

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Speaker 2: And we have a special report on the shadow fleet

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Speaker 2: of tankers ferrying Russia's oil through the Baltic as concerns

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Speaker 2: grow over ships dubbed piles of junk. Let's start with

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Speaker 2: a round up of our top stories. Crucial US job

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Speaker 2: data was released to some banks half an hour before

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Speaker 2: the official publication yesterday. The incident has added to questions

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Speaker 2: over the procedures for releasing some of the world's most

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Speaker 2: sensitive economic information. Bloombergs tiwa at a Bio has more.

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Speaker 3: The euro of Labour Statistics was due to post the

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Speaker 3: highly anticipated revised payrolls data at ten am New York time,

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Speaker 3: but while many on Wall Street were left refreshing the

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Speaker 3: web page for another thirty minutes. Bloomberg has learned that

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Speaker 3: at least three banks, Mizuho, BNP, Pariber and Namura were

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Speaker 3: able to get the numbers from the government agency by phone.

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Speaker 3: When the data was finally released, it showed the steepest

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Speaker 3: markdown since two thousand and nine, sparking a rally in

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Speaker 3: stocks and bonds. The incident has sparked outrage among some

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Speaker 3: market participants, and comes after another mishap in May, when

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Speaker 3: the BLS inadvertently published inflation data thirty minutes early. In response,

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Speaker 3: the agency told Bloomberg that it was reviewing its procedures

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Speaker 3: in London. To te were added Bayo Bloomberg.

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Speaker 2: Radio minutes of the latest Federal Reserve meetings show several

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Speaker 2: officials saw a case for a rate cut in July.

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Speaker 2: The vast majority view day September reduction is more appropriate,

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Speaker 2: demonstrated by the unanimous vote to keep borrowing cast stead

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Speaker 2: at the last meeting, but some policymakers observed that inflation

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Speaker 2: progress and unemployment increases provided a plausible case for a

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Speaker 2: twenty five basis point move last month. Bloomberg's economics editor

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Speaker 2: Michael McKee says there's still some divergence among officials.

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Speaker 4: You've got some people who were suggesting they wanted to wait,

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Speaker 4: like Raphae al Bastik, who has now said he's open

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Speaker 4: to cutting rates in September. In that case, it's probably

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Speaker 4: going to be the August jobs report that we get

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Speaker 4: at the beginning of next month that will make the

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Speaker 4: decision for them of how much they cut. It does

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Speaker 4: look like they are on track to cut.

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Speaker 1: That's memberg's Mike McKee speaking there.

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Speaker 2: Feed Charter Own pials due to speak about the economic

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Speaker 2: outlook at the Center Bank Symposium in Jackson Hole, Wyoming tomorrow.

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Speaker 2: Democratic vice presidential nominee Tim Wallas used his speech at

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Speaker 2: the party's convention to appeal to swing state voters. Speaking

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Speaker 2: in Chicago, was introduced himself to the nation as a teacher,

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Speaker 2: coach and a veteran with bipartisan credentials and leaning heavily

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Speaker 2: into a message of freedom and service. He made a

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Speaker 2: clear pitch two undecided voters.

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Speaker 5: That family down the road. They may not think like

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Speaker 5: you do, they may not pray like you do, they

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Speaker 5: may not love like you do, but they're your neighbors

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Speaker 5: and you look out for them, and they look out

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Speaker 5: for you, everybody belong and everybody has a responsibility to contribute.

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Speaker 5: For me, it was serving in the Army National Guard.

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Speaker 5: I joined up two days after my seventeenth birthday, and

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Speaker 5: I proudly wore our nation's uniform for twenty four years.

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Speaker 2: Wells's comments on his military service come as Republican sees

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Speaker 2: on the suggestion that the Minnesota governor overstated elements of

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Speaker 2: his records while in the National Guard. Current Vice President

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Speaker 2: Kamala Harris will close out the Democratic National Convention tonight,

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Speaker 2: as poles continue to show a tight race for the

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Speaker 2: White House between her and former President Donald Trump. Four

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Speaker 2: bodies have been found by divers searching the wreckage of

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Speaker 2: Mike Lynch's yacht Entrepreneur, and five others are missing, with

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Speaker 2: authorities saying they were likely trapped and died inside the

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Speaker 2: vessel off the coast of Sicily. Marine investigator James Wilkes

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Speaker 2: says the fifty meter depth makes any diving very hard.

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Speaker 6: It's beyond scuba depts, so we understand that the dives

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Speaker 6: have got a very limited amount of bottom time in

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Speaker 6: which to work something around ten minutes, and if there

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Speaker 6: are blocks to passageways, there are things getting in the

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Speaker 6: way of the divers doing their job. Then you know

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Speaker 6: they're going to have to risk assess every single dive

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Speaker 6: before they go down.

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Speaker 2: Marine investigator James Wilkes. Their Italian prosecutors are investigating how

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Speaker 2: the art, which was built to withstand hurricanes, sank within minutes.

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Speaker 2: Norway's vast natural gas industry is about to start its

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Speaker 2: annual repair season right as prices see intense volatility. Country

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Speaker 2: has grown to supply thirty percent of the continent's LNG,

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Speaker 2: so the three week stop will see Europe go without

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Speaker 2: the gas that would fuel a country size of Italy

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Speaker 2: or France. Some traders are bracing for a perfect storm

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Speaker 2: where an escalation in the Middle East and Ukraine's incurtain

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Speaker 2: into Russia mean multiple other sources of gas disappear and

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Speaker 2: PWC's China unit is expected to be given a six

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Speaker 2: month ban from operating in the country. Bloomberg has learned

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Speaker 2: the decision is expected within weeks as part of a

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Speaker 2: punishment over its audit of failed property giant Evergrand. If

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Speaker 2: the penalty is handed down, it's expected to stop China

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Speaker 2: PwC from signing off on financial results, restructurings and initial

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Speaker 2: public offerings. More than thirty publicly tested mainland firms of

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Speaker 2: dropped PwC as their auditor this year after scrutiny of

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Speaker 2: its role at Evergrand.

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Speaker 1: The company has declined to comment.

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Speaker 7: Well.

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Speaker 2: In a moment, we'll bring you more details on how

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Speaker 2: some banks got early access to the US jobs data,

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Speaker 2: plus why Nordic and Baltic countries are worried about the

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Speaker 2: shadow fleet transporting Russian oil. But first, I've been reading

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Speaker 2: the latest Top Shelf Society drinkslet letter from our colleagues,

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Speaker 2: who this week are looking at a celebrity backed whiskey.

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Speaker 2: But not just any celebrity. It's Beyonce's take on American

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Speaker 2: rye so she's part of at lvmh on Sir Davis,

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Speaker 2: named after her great grandfather, and our reviewer Brad Jaffe

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Speaker 2: is impressed.

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Speaker 1: I didn't know this appartly.

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Speaker 2: Beyonce's loves high end whiskey, so she had a very

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Speaker 2: specific idea of how she wanted this one to taste

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Speaker 2: as a cross apparently between a scott and a Japanese

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Speaker 2: single malt. So Brad is impressed, and he does if

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Speaker 2: you're interested to take a quick review of some other

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Speaker 2: celebrity indoor drinks and how they didn't go down quite so. Well,

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Speaker 2: you'll find the full piece on Bloomberg dot com and

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Speaker 2: on the terminal. Well, that's bringing more now in our

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Speaker 2: top story, how at least three banks managed to obtain

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Speaker 2: US payrolls data before the rest of Wall Street Our

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Speaker 2: markets live stratt as Mary Nicola joins us now for more. Mary,

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Speaker 2: great to have you with us. How significant is it

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Speaker 2: that this data release appears to have gone to some firms?

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Speaker 8: First, Yeah, it does create a bit of an uneven

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Speaker 8: playing field, unfair advantage, especially when you're talking about free

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Speaker 8: and available data in a free market. So obviously we

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Speaker 8: know that information is absolutely key and should be equally

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Speaker 8: available to everyone. So that but you know, as mentioned

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Speaker 8: in the reports as well, it shouldn't come as a

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Speaker 8: surprise given the series of recent mishaps that we saw,

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Speaker 8: especially with the reporting of CPI data thirty minutes ahead

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Speaker 8: of its release back in May. And then you also

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Speaker 8: had the BLS commenting answering inquiries from Wall Street firms

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Speaker 8: the month before. Just shows a little bit leaning towards

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Speaker 8: incompetence there.

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Speaker 1: What has the BLS said about this incident?

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Speaker 8: So it does look like they've apologized, and obviously because

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Speaker 8: the integrity of the data releases and of course the

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Speaker 8: impact that it can have on markets is absolutely critical, right,

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Speaker 8: So that's going to be consistent in terms of how

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Speaker 8: they try and figure this out. And of course there's

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Speaker 8: going to be a lot more pressure from Wall Street

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Speaker 8: firms that this doesn't happen again, so they will have

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Speaker 8: to step up their game a lot more.

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Speaker 9: So.

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Speaker 2: It was, in the end, a big revision in this

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Speaker 2: number that had been so keenly awaited. What was the

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Speaker 2: reaction on markets to us?

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Speaker 8: Yeah, so, I mean, obviously there was a big revision,

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Speaker 8: and everyone's focused now on the labor market because that's

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Speaker 8: going to be basically the straw that breaks the camel's

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Speaker 8: back when it comes to the FED cutting interest rates.

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Speaker 8: So when you see such a downward revision, you realize

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Speaker 8: that there are cracks within the labor market, and these

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Speaker 8: cracks in the labor market are going to lead the

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Speaker 8: FED FED to start easing. And we already saw in

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Speaker 8: the FOMC minutes that there was a bias with some

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Speaker 8: of the members to cut in July. This just adds

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Speaker 8: fuel to the fire that September becomes almost a guarantee.

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Speaker 2: Yeah, of course those minutes had been very interesting to

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Speaker 2: parse the detail of because although there was a unanimous

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Speaker 2: vote to hold at the last meeting, as you say,

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Speaker 2: some doubts creeping in from some pop makers, but whether

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Speaker 2: they could have actually cut in July as well. Mary,

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Speaker 2: This is all bringing us towards hearing from Jerome Powell

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Speaker 2: at Jackson Hole. Bloomberg's going to be speaking to a

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Speaker 2: range of FOMC policymakers over the next couple of days

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Speaker 2: as well. What are sort of the key questions that

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Speaker 2: we want to get answers from them on now.

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Speaker 8: Yeah, and it really will come down to the employment

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Speaker 8: Employment report and there what the view is of the

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Speaker 8: labor market. We always have to go back to what

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Speaker 8: is the dual mandate of the FED, and the dual

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Speaker 8: mandate of the Fed is still both inflation and the

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Speaker 8: labor market. Inflation is showing signs of easing, but it's

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Speaker 8: the cracks in the labor market that is starting to

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Speaker 8: worry a lot of the some of the members of

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Speaker 8: the FOMC, which we heard that they are concerned about

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Speaker 8: the labor market. So it's a lot of what's happens

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Speaker 8: next and the size of the rate cuts and how

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Speaker 8: aggressive the FED is going to be will be dependent

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Speaker 8: on the labor market report in the upcoming months. My

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Speaker 8: would be because there are still members within the FOMC

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Speaker 8: who would like to take a more cautious approach and

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Speaker 8: who are concerned about inflation and they don't want to

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Speaker 8: reneg Let's say they start cutting and then they have

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Speaker 8: to pair back and hike again. I think what you

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Speaker 8: start getting is a more cautious approach. So a twenty

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Speaker 8: five basis point cut in September rather than a supercize

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Speaker 8: cut in line with what the market was expecting.

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Speaker 1: How does that play out on markets?

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Speaker 2: I mean, do they end up getting very disappointed if

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Speaker 2: we only get twenty five basis points given the massive

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Speaker 2: swings we've had in terms of bets on what the

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Speaker 2: Fed's going to do in September.

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Speaker 8: Yeah, I mean we've had these sways in the market

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Speaker 8: before and then the repricing as well, so we've moved

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Speaker 8: from nearly fifty basis points of cuts to about thirty

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Speaker 8: basis points of cuts in the market now for September,

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Speaker 8: and really it's about how aggressive the FED goes thereafter,

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Speaker 8: because the market is pricing in quite aggressive cuts over

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Speaker 8: the next few months, and that's going to again be

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Speaker 8: very dependent on what happens in the labor market and

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Speaker 8: how things unfold there, but they will have But remember,

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Speaker 8: just much like what we're seeing in the rest of

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Speaker 8: the G tens. Amongst G ten central banks, they're taking

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Speaker 8: on a more cautious approach where they're saying we're going

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Speaker 8: to cut first, and none of them really have. In

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Speaker 8: terms of let's say the ECB, the BOE. Inflation isn't

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Speaker 8: in line with their target, but yet they've started cutting,

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Speaker 8: and I think that's a lot of it is indicative

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Speaker 8: of the fact that they don't need to have policy

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Speaker 8: as restrictive as it was, But inflation is still a

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Speaker 8: little bit sticky. Take for example, in the UK where

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Speaker 8: services inflation is still high, and they're going to still

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Speaker 8: be cautious in the US as well in case you know,

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Speaker 8: some pockets of inflation still remain a little bit sticky.

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Speaker 8: So I think going forward it really will depend on

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Speaker 8: just how how bad or how the the labor market

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Speaker 8: unfolds and how and because because we have to, the

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Speaker 8: FED really wants to ensure a soft landing.

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Speaker 2: Okay, Mary Nicola, our market's live Macrostrastus. Thank you very

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Speaker 2: much for joining US now. Officials and environmental organizations in

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Speaker 2: Nordic and Baltic countries are raising the alarm over a

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Speaker 2: growing shadow fleet that's helping to transport Russian oil to

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Speaker 2: global markets. Joining US now for more details. Our Copenhagen

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Speaker 2: reporter Sana Vas Sana, great to have you with us

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Speaker 2: on the program. Can you remind us, first of all,

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Speaker 2: what the shadow fleet is and why has it got

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Speaker 2: people worried?

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Speaker 7: Yeah, good morning all. The shadow fleet.

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Speaker 10: It consists of hundreds of tankers that Russia has assembled

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Speaker 10: in response to sanctions and as you say, helps to

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Speaker 10: keep Russia all flowing.

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Speaker 7: So they're mostly all vessels.

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Speaker 10: They often have undeclared owners and questionable insurance, and then

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Speaker 10: they sail on the flags of countries with poor safety records,

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Speaker 10: so it means that there are huge question marks around

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Speaker 10: whether they meet safety standouts and also whether anyone could

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Speaker 10: be held accountable if an accident were to happen.

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Speaker 7: So of course this has gotten.

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Speaker 10: People worried because well, in part because the oil revenues

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Speaker 10: helped to fund Russia's war in Ukraine, but there's also

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Speaker 10: this growing worry from officials and environmental organizations that the

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Speaker 10: rise of the shadow fleet could at some point result

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Speaker 10: in an accident and a potential oil spill because of

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Speaker 10: the age and poor.

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Speaker 7: Condition of these ships.

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Speaker 10: And that's especially big worry in the Baltic Sea, where

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Speaker 10: every day these tankers move Russian all through what is

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Speaker 10: very very shallow sea.

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Speaker 7: And one that's very vulnerable to human impact.

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Speaker 2: Yeah, you've been reporting about the concerns in Denmark and

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Speaker 2: all of this. Why is Denmark such a key part

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Speaker 2: of this story.

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Speaker 7: Yeah, Denmark.

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Speaker 10: It's basically a transit point for when ships have loaded

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Speaker 10: crude in Russia and they want to exit the Baltic Sea,

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Speaker 10: they have to sail through these very narrow straits, which

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Speaker 10: are Danish territorial waters. So some critics believe that Denmark

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Speaker 10: should be doing more to block these tankers in transit,

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Speaker 10: or at the very least demand that they have.

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Speaker 7: A proper insurance.

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Speaker 10: Denmark, on the other hand, has been quite clear that

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Speaker 10: it won't do anything on its own. So back in

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Speaker 10: the nineteenth century they signed a treaty where the Danes

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Speaker 10: committed to allow free passage through its waters, and this

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Speaker 10: authority say prevents them from intervening in any traffic going through.

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Speaker 10: And even if theoretically Denmark could make demands on ships

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Speaker 10: for environmental reasons, it would be practically impossible for it

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Speaker 10: to enforce. And Denmark also risks triggering some form of

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Speaker 10: retaliation from Russia. So there's really very little that the

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Speaker 10: Danish government can do on its own.

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Speaker 2: The you've booke and some of the people who have

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Speaker 2: been on board these tankers, who are they and what

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Speaker 2: have they told you?

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Speaker 10: Yeah, and now I said, there's very little Denmark can

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Speaker 10: do on its own. But one thing that it is

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Speaker 10: doing is to offer pilotash in transit. So Danish state

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Speaker 10: pilots they bought these ships once they near the Danish

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Speaker 10: waters and they help navigate the.

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Speaker 7: Ships through the straits.

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Speaker 10: So for this for our latest feach to I spoke

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Speaker 10: to several of these pilots. It's it's really quite a

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Speaker 10: fascinating jobs and a job and they get a front

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Speaker 10: row view of Moscow's floating all economy nearly every day

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Speaker 10: they go to work and they paint a picture of

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Speaker 10: poorly maintained vessels. Some struggle with outdated maps and very

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Speaker 10: old equipment, and they also report filthy living conditions and

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Speaker 10: crew that's often poorly trained. But what's even worse is

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Speaker 10: that many of the Russian Shadow Fleet tankers they refuse

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Speaker 10: this pal attached.

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Speaker 7: They don't have to accept it.

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Speaker 10: So my sources, the pilots, they might not even have

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Speaker 10: seen the worst of it. And the fact that many

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Speaker 10: ships go through Denmark unassisted, that is increasingly worrying because

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Speaker 10: the route is very difficult for those unfamiliar with it,

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Speaker 10: and of course that's increasing the risk of an accident happening,

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Speaker 10: and we've already seen a collision happening earlier this year,

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Speaker 10: so that is a major warrior at the moment.

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