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Speaker 1: Good morning. I'm Brian Curtiz and I'm Doug Krisner. Here

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Speaker 1: are the stories we're following today. It was on Sunday

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Speaker 1: in Israel the TA thirty five stock index was up

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Speaker 1: one point three percent. Now analyst over JP Morgan Chase

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Speaker 1: are estimating that the Israeli economy may shrink by eleven

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Speaker 1: percent on an annualized basis in the fourth quarter. This

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Speaker 1: report was released roughly twenty four hours before that ground

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Speaker 1: invasion began. Now, typically in a week where you have

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Speaker 1: a FED meeting, that would be the main event, Not

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Speaker 1: so much for this week. We've got earnings from Apple

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Speaker 1: that could get more attention. And another potential pressure point

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Speaker 1: is the Treasury's refunding announcement on Wednesday. Will take a

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Speaker 1: closer look at that momentarily. In terms of the FED, though,

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Speaker 1: policymakers are expected to hold that key rate steady in

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Speaker 1: a range of between five and a quarter to five

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Speaker 1: and a half percent. That, by the way, is a

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Speaker 1: twenty two year high. We also have Central Bank of

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Speaker 1: meetings in the week ahead in the UK and in Japan. Now,

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Speaker 1: crude oil in the New York session rallied on Friday,

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Speaker 1: when Israel did step up ground operations WTI finishing at

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Speaker 1: eighty five point fifty four. We're down right about eight

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Speaker 1: tens of one percent in the electronic session at eighty

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Speaker 1: four eighty five. And we'll take another look at market

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Speaker 1: action for you in about fifteen minutes.

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Speaker 2: Brian, thanks very much. Now it's time for Global news.

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Speaker 2: Let's see it right over to Ed Baxter in San Francisco.

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Speaker 2: Israel has deepened the war with Hamas. It's a war

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Speaker 2: that has seemingly no end inside.

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Speaker 3: Ed.

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Speaker 4: Yeah, exactly right, Brian. Prime Minister Benjamin Nett Yahoo calling

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Speaker 4: it phase two, sending troops and tanks into the northern

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Speaker 4: Gaza strip.

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Speaker 5: I mean the war inside the Gaza Strip will be

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Speaker 5: difficult and long, and we are prepared for it.

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Speaker 4: And Bloomberg's Henry Mayer in Tel Aviv says Israel is

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Speaker 4: using ground troops to gather information that Israel can then

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Speaker 4: use to refine air strike targets on Hamas.

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Speaker 6: Tamas is extremely well dug in in Gaza. It has

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Speaker 6: a network of hundreds of tunnels which extend across the

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Speaker 6: whole Godda strip. And you know these are very sophisticated

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Speaker 6: facilities which you allow them to move equipment and men around.

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Speaker 4: The US is standing with Israel. National Security Advisor to

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Speaker 4: the President Jake Sullivan on ABC has heard on Bloomberg.

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Speaker 7: Israel is trying to do is to ensure that Hamas

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Speaker 7: cannot again present the kind of strategic systemic threat that

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Speaker 7: it has been posing to the citizens of Israel.

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Speaker 4: But again, Sullivan says, a concern of safety of hostages

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Speaker 4: and civilians in Gudz as well.

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Speaker 7: Every innocent human life is sacred and every step must

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Speaker 7: be taken to protect human life, whether that be Palestinian

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Speaker 7: or Israeli or anyone else.

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Speaker 4: Along with the increase in military activity, there is a

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Speaker 4: call for discussion from the executive director of the Florida

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Speaker 4: Chapter of the Council on American Islamic Relations, Abdul Jabar.

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Speaker 8: When we're looking for a sea spar when we're looking

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Speaker 8: to even beyond the.

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Speaker 9: Call to pause so that you can have these discussions,

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Speaker 9: we're not even seeing that opportunity come up.

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Speaker 4: And the new Speaker of the House of Representatives, Mike Johnson,

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Speaker 4: says there will be work this week on funding for Israel.

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Speaker 4: He expects to have it by the end of the week.

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Speaker 4: With the GLP field narrowing for the presidential nomination. Mike

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Speaker 4: penns drops out. Chris Christy on CNN says the party

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Speaker 4: faces strong challenges as Donald Trump's legal woes are mounting. Christy,

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Speaker 4: let me find that for you. Here go Christy on CNN.

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Speaker 3: Donald Trump is not going to be able to beat

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Speaker 3: Joe Biden from a courtroom in Washington, d C. While

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Speaker 3: he's fighting his indictment on the January sixth case. And

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Speaker 3: let me tell you that indictement got much tougher for

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Speaker 3: him to beat when his own chief of staff has

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Speaker 3: now accepted immunity and will testify against him about the

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Speaker 3: lies he told in the aftermath of January sixth.

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Speaker 4: And he says the party needs to get rid of

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Speaker 4: Trump move on to debate between the parties strong leaders.

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Speaker 4: China's foreign Minister Wang Yi says a road to San

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Speaker 4: Francisco's summit will not be a smooth one. This is

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Speaker 4: a reference to the expected meeting between President Shi Jimping

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Speaker 4: and US President Joe Biden. This after his meeting with

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Speaker 4: US Secretary of State Blank and the end of last

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Speaker 4: week they did agree to work together to make it happen,

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Speaker 4: and the US is saying it will come together Global

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Speaker 4: news twenty four hours a day and whenever you want

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Speaker 4: it with Bloomberg News Now in San Francisco. I'm Ed Baxter.

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Speaker 4: This is Bloomberg Brian Ed.

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Speaker 2: Thanks very much. Let's get to some of the top

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Speaker 2: stories here. Egypt saying that his natural gas imports have

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Speaker 2: ground to a halt. It reflects the impact of the

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Speaker 2: Gaza conflict on the North African nation. It could also

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Speaker 2: dash hopes of a resumption of exports to Europe. The

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Speaker 2: halt in gas imports appears linked to a decision earlier

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Speaker 2: this month by Israel to shut down the offshore Temar

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Speaker 2: gas field. That's amid concerns that the field could be

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Speaker 2: damaged by the fighting between Israel's military and Hamas in

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Speaker 2: the Gaza Strip. Chevron operates the Tamar field. It could

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Speaker 2: not be reached for immediate comment. However, the company did

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Speaker 2: say on Friday it has continued to honor some of

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Speaker 2: its contracts with Egypt well.

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Speaker 1: The Fed's decision on Wednesday may take a backseat to

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Speaker 1: another potential market moving event, speaking here of the Treasury's

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Speaker 1: new borrowing plan, the so called quarterly Refunding announcement. It's

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Speaker 1: due just hours before the Fed's decision, and this will

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Speaker 1: detail how the Treasury intends to ramp up sales of

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Speaker 1: longer term government debt as of funding a wider budget deficit.

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Speaker 1: Christopher Harvey is the head of equity strategy at Wells Fargo.

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Speaker 10: If the Treasury announces and they don't need as much

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Speaker 10: paper as people suspect, or they come in line with expectations,

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Speaker 10: that's a good thing. If the FOMC plays ball and says, okay,

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Speaker 10: we're done, We're good here for now, that could stabilize

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Speaker 10: the markets.

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Speaker 1: That is Christopher Harvey from Wells Fargo. By the way,

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Speaker 1: Bloomberg Intelligence is projecting growths coupon auction amounts will rise

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Speaker 1: by between one to two billion dollars across the curve

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Speaker 1: over the next six months, with the exception of the

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Speaker 1: twenty and thirty year bonds.

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Speaker 2: Brian well Stillantis has reached a tentative deal with the

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Speaker 2: United Auto Workers, ending the union six week old strike

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Speaker 2: with the company. The deal reached on Saturday, includes a

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Speaker 2: twenty five percent hourly pay raise plus cost of living allowances.

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Speaker 2: It matches the agreement reached with Ford earlier last week.

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Speaker 2: In a video posted on x uaw president Sean Fain

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Speaker 2: praised the deal.

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Speaker 9: Once again, we've achieved what just weeks ago we were

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Speaker 9: told was impossible. The power of the stand up strike

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Speaker 9: cannot be understated. Over the forty four days we were

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Speaker 9: on strike, Stillanus more than doubled the total value of

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Speaker 9: the proposals they had on the table.

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Speaker 2: Sean Fain, the union said that on top of Stillantis

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Speaker 2: reopening the plant, the company would also add more than

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Speaker 2: a thousand jobs at a new battery plant in Belvidere

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Speaker 2: in Illinois. Stillantis is now negotiating to head off a

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Speaker 2: strike at his Canadian operation.

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Speaker 1: Australia has walked away from negotiations on a free trade

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Speaker 1: deal with the European Union for the second time in

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Speaker 1: three months. More from Bloomberg's Paul Allen in Sydney.

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Speaker 11: A free trade deal between Australia and the European Union

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Speaker 11: has been on the table for five years now, and

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Speaker 11: while his broad agreement over almost everything, a couple of

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Speaker 11: small sticking points have proven insurmountable. Australia wants it greater

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Speaker 11: access for its beef, mutton and sugar. Last week, Australia's

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Speaker 11: National Farmers Federation called the deal as it stands a dud.

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Speaker 11: Europe meanwhile, wants Australia to stop using geographical indicators like prosecco,

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Speaker 11: parmesan and feta to describe some of its wine and cheese's.

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Speaker 11: Australia's Trade minister says negotiations will continue and he hopes

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Speaker 11: someday a deal can be signed. Paul Allen Bloomberg.

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Speaker 2: Radio Evergrind will face a make or break moment today

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Speaker 2: at a court hearing on liquidation in Hono. Bloomberg's Joan

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Speaker 2: Wong has that story from Hong Kong.

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Speaker 5: The lawsuit here in Hong Kong has been lingering for

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Speaker 5: almost seventeen months. That's after multiple delays requested by Evergrand.

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Speaker 5: A group of creditors that have previously supported the firm's

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Speaker 5: restructuring plan is now wavering. The so called at HOWC

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Speaker 5: Block has yet to decide whether it'll speak out against

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Speaker 5: the winding up request. That's despite the fact they did

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Speaker 5: so previously. The creditors hold more than six billion dollars

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Speaker 5: of the builder's nineteen billion dollars of offshore notes. If

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Speaker 5: a wind of order is delivered, Evergrand could become the

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Speaker 5: biggest ever developer to face such a fate under Hong

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Speaker 5: Kong law in Hong Kong. Join Wang Bloomberg Radio.

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Speaker 2: This is Bloomberg Daybreak Asia. I'm Brian Curtis along with

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Speaker 2: Rishad Salamat and our guest is Kirsten Fountain Rose, president

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Speaker 2: of Red six Solutions. Kristin, thanks very much for being

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Speaker 2: with us here live on the program. So Israel's push

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Speaker 2: into northern Gaza is perhaps a little more cautious than

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Speaker 2: was feared by some, but it's still coming under quite

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Speaker 2: a lot of criticism. How real is it in your

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Speaker 2: mind that the spread of this war continues.

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Speaker 12: The spread is very likely, but escalation is a separate issue.

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Speaker 12: So we're seeing activity by groups that are also backed

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Speaker 12: by Iran that constitute spread because they're happening on different fronts.

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Speaker 12: They're happening in Lebanon or drones are being fired from Yemen,

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Speaker 12: for example, But that doesn't necessarily mean we're looking at

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Speaker 12: escalation to a wider war. What this does look like

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Speaker 12: is that these groups, again backed by Iran, are trying

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Speaker 12: to spread Israel thin. They are trying to spread Israel's

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Speaker 12: capabilities to respond on multiple fronts, very very thin, to

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Speaker 12: force them to stay vigilant on all these different fronts,

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Speaker 12: spreading out their forces, spreading out their defensive technology systems

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Speaker 12: to make it easier for Hamas to fight them. So

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Speaker 12: it may not mean that these groups are getting involved

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Speaker 12: full scale into a regional war. It does though definitely.

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Speaker 12: We mean that they're trying to make the fight harder

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Speaker 12: for Israel at home against Hamas well.

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Speaker 8: Also here when we look at what's going on in

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Speaker 8: the region, you say spreading it, and Kristen, I mean

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Speaker 8: the role of Hezballah will be very important in the

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Speaker 8: future with regards to this and also very central to

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Speaker 8: what Iran has been saying of late.

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Speaker 12: Extremely important to your point, Hesbellah is a greater threat

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Speaker 12: than Hamas's to Israel. The US Treasury has designated over

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Speaker 12: sixteen hundred individuals and entities that are linked to terrorism

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Speaker 12: and terrorist financing by the Iranian regime, and it's milicious

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Speaker 12: across the Middle East, and Hasbela is the prominent one.

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Speaker 12: Iran gives roughly seven hundred million dollars a year to

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Speaker 12: support terrorist groups, including Hezbolah, and up to one hundred

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Speaker 12: million dollars annually to Hamas and other Palestinian terrorist groups.

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Speaker 12: So with the involvement of something like Hasbulah as you

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Speaker 12: see getting seven times the amount of annual support from Iran.

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Speaker 12: They have stockpiled weapons and capabilities in tech anologies that

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Speaker 12: the other groups do not have, so they would be

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Speaker 12: a much more formidable foe if they chose to get involved.

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Speaker 12: This is why the US has said if they do

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Speaker 12: get involved in a way that Israel can't handle on

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Speaker 12: its own, the US could then potentially be pulled in,

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Speaker 12: which can then trigger something larger the regional escalation you're

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Speaker 12: talking about.

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Speaker 2: I wonder if other groups might feel a little different

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Speaker 2: given that Israel's stated goal here is a little different

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Speaker 2: than before. In the past, Hamas was often damaged but

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Speaker 2: left standing. This time, Israel is talking about destroying Hamas

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Speaker 2: once and for all. Is that realistic and does it

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Speaker 2: send a strong message to groups like Hesbelah?

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Speaker 12: It certainly does send a strong message and it impacts

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Speaker 12: their calculus. One of the things we don't know per

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Speaker 12: group is how it impacts it. There's two potential potential ways.

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Speaker 12: One is that these groups could say Israel has threatened

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Speaker 12: to completely destroy this organization that is a critical cog

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Speaker 12: in our network. We can't let that happen. So if

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Speaker 12: it looks like we're heading in that direction, we will

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Speaker 12: get involved. We will risk it all because we together

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Speaker 12: need to be a fighting force. This would be unprecedented,

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Speaker 12: so it would be unlikely. There's another option where they

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Speaker 12: would say, because Israel has decided they want to destroy

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Speaker 12: this organization, we have quite a bit to lose. Has

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Speaker 12: Bella right now runs a country. It is the power

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Speaker 12: behind the government in Lebanon, and Lebanon has a failed economy,

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Speaker 12: it is not in a good place, but it still

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Speaker 12: sits at the head of the state in that government.

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Speaker 12: That would be quite a lot to risk if you're Hasbela,

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Speaker 12: do you want to put that on the line to

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Speaker 12: go to war with Israel and potentially the US, knowing

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Speaker 12: you could then lose everything for an organization that is

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Speaker 12: not necessarily critical to your survival or your own goals.

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Speaker 12: So we are trying to figure out constantly what do

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Speaker 12: each of these groups think is in it for them

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Speaker 12: to enter this fight more robustly.

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Speaker 8: I mean, you know, we talk about these military responses,

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Speaker 8: but you know it's the same old playbook of violence,

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Speaker 8: begetting more violence. Surely there's a better way of dealing

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Speaker 8: with there must be an intelligent solution long term, rather

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Speaker 8: than this this circle we find ourselves in in the Middle.

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Speaker 1: East, you would hope.

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Speaker 10: So.

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Speaker 12: Unfortunately, one of the lessons we believe some of these

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Speaker 12: groups are learning is that terrorism works. So if you

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Speaker 12: allow Hamas to succeed, if you allow them to conduct

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Speaker 12: a strike like they did on October seventh and murder

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Speaker 12: as many civilians as they did in such a way,

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Speaker 12: and then you say we are going to answer that

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Speaker 12: with a calm that does not in any way impede

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Speaker 12: its ability to do that kind of strike again, then

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Speaker 12: you have sent them the message that you get what

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Speaker 12: you want by using terrorism. That's one of the things

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Speaker 12: that the US, Israel, and European and other governments are

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Speaker 12: thinking about. Now, how do we stop the bloodshed without

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Speaker 12: sending the message This has been an effective tactic on

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Speaker 12: the part of Hamas to draw more attention to the

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Speaker 12: grievances they had inside Israel. Can't let that end. So

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Speaker 12: and then making this more difficult, as I'm sure you've

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Speaker 12: discussed many times, is Hamas's use of humans for shields

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Speaker 12: making it very difficult for Israel to complete its stated

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Speaker 12: goals of going in and eliminating the leadership and their

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Speaker 12: ability to conduct terrorism from Israel. They build their bunkers

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Speaker 12: under hospitals and schools and mosques, so there will be

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Speaker 12: collateral damage when you go in to try to upgrade them.

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Speaker 5: So how do you balance that?

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Speaker 12: How much risk is any country willing to take with

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Speaker 12: their own civilians and with hostages from other countries. It's

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Speaker 12: very tough as well.

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Speaker 5: Right now.

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Speaker 2: It begs the question kirston if even though this is

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Speaker 2: a more limited response by Israel, it's starting to stretch

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Speaker 2: other countries sort of patients on this. Is Israel kind

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Speaker 2: of losing some of the the goodwill that it had

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Speaker 2: in the beginning of this.

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Speaker 12: They are losing some of the goodwill, and part of

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Speaker 12: that is because of a massive disinformation campaign that's been

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Speaker 12: quite effective by not only Iron and its proxies, but

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Speaker 12: also other adversaries of the US and the West that

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Speaker 12: are simply enjoying the luxury of amplifying some of that

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Speaker 12: disinformation because it makes their adversaries here in the West

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Speaker 12: look poorly. So you're seeing usage of footage from previous conflicts,

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Speaker 12: for instance, then attributed to Israeli IDF forces inaccurately. You're

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Speaker 12: seeing stories that are made up. There's enough bag going

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Speaker 12: on on the ground that this doesn't need to be done,

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Speaker 12: but we're seeing it. And this is then contributing to

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Speaker 12: this lack of empathy for Israel, and people are forgetting

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Speaker 12: what happened on October seventh, forgetting that Hamas threw this

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Speaker 12: first punch. It's also a David and Goliath thing. You know,

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Speaker 12: Israel is more capable, it is more militarily supported, so

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Speaker 12: it always looks like, you know, the underdog is always

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Speaker 12: the one you feel some sympathy for, and that does

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Speaker 12: make it hard. And then Hamas very well knew that

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Speaker 12: by bunkering themselves underneath places where civilians would be gathered,

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Speaker 12: like mosques and schools and hospitals, it would make it

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Speaker 12: really hard.

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