WEBVTT - Blockbuster UBS Results, Recession Odds & US Mulls Google Breakup

0:00:00.160 --> 0:00:09.879
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

0:00:09.920 --> 0:00:12.959
<v Speaker 1>Daymake You at podcast, available every morning on Apple, Spotify

0:00:13.080 --> 0:00:15.760
<v Speaker 1>or wherever you listen. It's Wednesday, the fourteenth of August.

0:00:15.800 --> 0:00:18.000
<v Speaker 1>Team in London. I'm Caroline Hitkat.

0:00:17.800 --> 0:00:21.280
<v Speaker 2>And I'm Stephen Carroll coming up today. UBS reports blockbuster

0:00:21.360 --> 0:00:25.240
<v Speaker 2>results as profits beat estimates and inflows hit twenty seven

0:00:25.280 --> 0:00:26.119
<v Speaker 2>billion dollars.

0:00:26.400 --> 0:00:29.720
<v Speaker 1>Goldman Sachs and JP Morgan say markets are now pricing

0:00:29.760 --> 0:00:32.680
<v Speaker 1>in high odds of a US recession.

0:00:32.520 --> 0:00:35.680
<v Speaker 2>Plus the letter of the law. US authorities consider a

0:00:35.720 --> 0:00:40.280
<v Speaker 2>push to break up alphabets Google after a landmark competition ruling.

0:00:40.479 --> 0:00:42.479
<v Speaker 1>Let's start with a roundup of our top stories.

0:00:42.600 --> 0:00:45.720
<v Speaker 2>The Swiss banking giant UBS has reported double the profits

0:00:45.760 --> 0:00:48.360
<v Speaker 2>expected on the second quarter. Net income at the bank

0:00:48.400 --> 0:00:51.320
<v Speaker 2>came in at one point one billion dollars versus estimates

0:00:51.320 --> 0:00:54.760
<v Speaker 2>of five hundred and twenty million. UBS's key wealth management

0:00:54.760 --> 0:00:58.040
<v Speaker 2>business are strong client inflows, with twenty seven billion dollars

0:00:58.040 --> 0:01:00.640
<v Speaker 2>in net new assets in the period. A year after

0:01:00.640 --> 0:01:03.120
<v Speaker 2>completing the takeover of Credit Suite, the bank says it's

0:01:03.120 --> 0:01:07.200
<v Speaker 2>on track for pre merger levels of profitability. UBS also

0:01:07.240 --> 0:01:09.640
<v Speaker 2>says it expects to book another one point one billion

0:01:09.720 --> 0:01:14.039
<v Speaker 2>dollars and integration related expenses in the third quarter. It's

0:01:14.080 --> 0:01:16.880
<v Speaker 2>still planning up to a billion dollars in share buybacks

0:01:16.920 --> 0:01:17.360
<v Speaker 2>this year.

0:01:18.040 --> 0:01:21.280
<v Speaker 1>Wall Street Banks, JP Morgan and Goldman Sachs say that

0:01:21.319 --> 0:01:24.759
<v Speaker 1>the markets are pricing in HAGH odds of a US recession.

0:01:25.160 --> 0:01:27.480
<v Speaker 1>The calculations come in the wake of a sell off,

0:01:27.520 --> 0:01:32.360
<v Speaker 1>which briefly sparked fears across markets last week. Barta Manthi

0:01:32.560 --> 0:01:36.399
<v Speaker 1>Exty statistic City Group agrees. She says the evidence is

0:01:36.520 --> 0:01:40.039
<v Speaker 1>pointing towards an economic downturn, so.

0:01:39.959 --> 0:01:43.080
<v Speaker 3>We indeed, one of a few brokers we have a

0:01:43.160 --> 0:01:47.360
<v Speaker 3>recession penciled in for this and next quarter out of

0:01:47.400 --> 0:01:50.080
<v Speaker 3>the US, so we think the slowdown in the data

0:01:50.280 --> 0:01:53.720
<v Speaker 3>is much stronger than.

0:01:52.920 --> 0:01:57.120
<v Speaker 1>It looks like city groups are to Manthi. There speaking

0:01:57.280 --> 0:02:01.120
<v Speaker 1>to Bloomberg Radio, Goldman Sachs says that together equity and

0:02:01.160 --> 0:02:04.360
<v Speaker 1>bond markets are seeing a forty one percent probability of

0:02:04.400 --> 0:02:08.040
<v Speaker 1>a US recession. That's up from twenty nine percent in April.

0:02:08.320 --> 0:02:10.920
<v Speaker 1>The jump is being driven by market wages on a

0:02:10.960 --> 0:02:14.320
<v Speaker 1>more aggressive pace of rate cuts from the FED and

0:02:14.360 --> 0:02:19.160
<v Speaker 1>the lagging performance of stocks. JP Morgan has a similar model. Meanwhile,

0:02:19.200 --> 0:02:23.000
<v Speaker 1>the Atlanta Fed president Raphael Bostik says that he's still

0:02:23.040 --> 0:02:27.000
<v Speaker 1>looking for a little more data before supporting a reduction

0:02:27.200 --> 0:02:30.000
<v Speaker 1>in interest rates from the US Central Bank.

0:02:30.320 --> 0:02:33.640
<v Speaker 2>The former JP Morgan strastus, who departure sent shockwaves across

0:02:33.720 --> 0:02:36.480
<v Speaker 2>Wall Street, has resurfaced on social media. It's the first

0:02:36.480 --> 0:02:39.480
<v Speaker 2>time we've heard from Marko Kolanovitch since his exit in July.

0:02:39.600 --> 0:02:41.480
<v Speaker 2>Bloombrooks twa Adebayo has the story.

0:02:42.000 --> 0:02:44.960
<v Speaker 4>Once hailed as one of Wall Street's last remaining bears,

0:02:45.240 --> 0:02:48.799
<v Speaker 4>Marko Kolanovich made his name with stark warnings about stock

0:02:48.840 --> 0:02:50.840
<v Speaker 4>slumps and volatility blow ups.

0:02:51.200 --> 0:02:54.400
<v Speaker 5>S below twenty fifteen or call it twenty thirty to

0:02:54.520 --> 0:02:57.200
<v Speaker 5>twenty fifty range. And why I'm mentioning that range because

0:02:57.240 --> 0:03:00.760
<v Speaker 5>basically at that point, momentum turns negative and point also

0:03:00.840 --> 0:03:04.560
<v Speaker 5>option positioning will result into some outlaws outross some equities.

0:03:04.720 --> 0:03:08.520
<v Speaker 4>Kalanovitch they're speaking to Bloomberg back in twenty eighteen, but

0:03:08.639 --> 0:03:12.720
<v Speaker 4>when his more recent pessimistic views failed to materialize, the

0:03:12.800 --> 0:03:16.840
<v Speaker 4>strategist once called Gandalf parted ways with JP Morgan after

0:03:16.960 --> 0:03:21.359
<v Speaker 4>nineteen years. The abrupt change led many investors to wonder

0:03:21.400 --> 0:03:25.320
<v Speaker 4>if his exit foreshadowed a market top, comparing him to

0:03:25.440 --> 0:03:28.720
<v Speaker 4>Charles Cloff, who famously left Merrill Lynch in nineteen ninety

0:03:28.840 --> 0:03:32.760
<v Speaker 4>nine after maintaining his bearish stance before the dot com

0:03:32.800 --> 0:03:37.400
<v Speaker 4>bubble pop. Now, Kalanovich is back, armed with a fresh

0:03:37.400 --> 0:03:41.560
<v Speaker 4>social media handle and a new downbeat take, predicting increasing

0:03:41.600 --> 0:03:45.440
<v Speaker 4>bankruptcies and credit card delinquencies in London tiwa ad Abio

0:03:45.520 --> 0:03:46.440
<v Speaker 4>Bloomberg Radio.

0:03:47.000 --> 0:03:51.880
<v Speaker 1>The Justice Apartment is considering a breakup of alphabets Google.

0:03:52.000 --> 0:03:55.000
<v Speaker 1>We're told that it's one of the options being looked

0:03:55.000 --> 0:03:58.920
<v Speaker 1>at after a federal court found Google monopolized the online

0:03:58.960 --> 0:04:03.800
<v Speaker 1>search market. Who is Bloomberg's antitrust reporter Leah Nylen.

0:04:04.280 --> 0:04:06.920
<v Speaker 6>The Justice Department is supposed to come up with a

0:04:06.960 --> 0:04:10.480
<v Speaker 6>plan for how it would resolve the alleged illegal conduct

0:04:10.480 --> 0:04:13.520
<v Speaker 6>by Google. Last week at federal judge found that they

0:04:13.560 --> 0:04:16.799
<v Speaker 6>had monopolized the markets for online search and also search

0:04:16.880 --> 0:04:18.640
<v Speaker 6>text dads. Those are the ones that appear at the

0:04:18.640 --> 0:04:21.560
<v Speaker 6>top of the search results whenever you Google for something,

0:04:22.200 --> 0:04:25.520
<v Speaker 6>and so the Justice Department is mulling a bunch of possibilities,

0:04:25.560 --> 0:04:28.880
<v Speaker 6>but sources tell us that a breakup is definitely on

0:04:28.920 --> 0:04:29.360
<v Speaker 6>the table.

0:04:29.960 --> 0:04:34.440
<v Speaker 1>Bloomberg's Leah Nylon the move would be Washington's first attempt

0:04:34.480 --> 0:04:38.520
<v Speaker 1>at dismantling a company for illegal monopolization since efforts to

0:04:38.560 --> 0:04:42.160
<v Speaker 1>break up Microsoft two decades ago. Shares of Apple were

0:04:42.200 --> 0:04:44.200
<v Speaker 1>down as much as two percent in late trading.

0:04:45.680 --> 0:04:49.080
<v Speaker 2>Ukraine's president Vajemya Zelenski has tasked his top commander with

0:04:49.160 --> 0:04:52.560
<v Speaker 2>working on next steps as the army continues its encouragion

0:04:52.560 --> 0:04:55.919
<v Speaker 2>into Russian territory. The surprise military offensive has changed the

0:04:56.000 --> 0:04:59.000
<v Speaker 2>narrative around the war, which has what some had seen

0:04:59.120 --> 0:05:03.000
<v Speaker 2>ending in Ukraine inevitable loss. Now, three people close to

0:05:03.080 --> 0:05:06.599
<v Speaker 2>Russia's defense ministry tell Bloomberg the Kremlin is struggling to

0:05:06.640 --> 0:05:10.360
<v Speaker 2>recruit enough new fighters. The sources say regional officials are

0:05:10.360 --> 0:05:13.960
<v Speaker 2>missing more than a third of their recruitment Quotas Russia's

0:05:13.960 --> 0:05:17.719
<v Speaker 2>president Vladimir Putin has vowed to secure his country's borders,

0:05:18.080 --> 0:05:23.360
<v Speaker 2>Ukraine's Foreign Ministry spokesperson Gyorghi Tiki says they're not interested

0:05:23.480 --> 0:05:24.560
<v Speaker 2>in keeping the land.

0:05:24.960 --> 0:05:26.520
<v Speaker 5>Sure this could be situe.

0:05:27.520 --> 0:05:30.840
<v Speaker 7>Ukraine controls about one thousand square kilometers in this operation.

0:05:31.160 --> 0:05:34.359
<v Speaker 7>I can also emphasize here unlike Russia, Ukraine does not

0:05:34.440 --> 0:05:37.279
<v Speaker 7>need other people's territory. Ukraine is not interested in taking

0:05:37.360 --> 0:05:39.760
<v Speaker 7>over the territory of the Curse region, but we want

0:05:39.800 --> 0:05:41.120
<v Speaker 7>to protect the lives of our people.

0:05:42.160 --> 0:05:44.120
<v Speaker 2>Yorgi Tiki from the Ukraine Foreign Ministry.

0:05:44.120 --> 0:05:44.360
<v Speaker 8>There.

0:05:44.360 --> 0:05:47.320
<v Speaker 2>Western allies have so far given their blessing to the

0:05:47.440 --> 0:05:50.600
<v Speaker 2>use of donated weapons inside Russian territory.

0:05:51.680 --> 0:05:54.359
<v Speaker 1>The US has approved the sale of up to fifty

0:05:54.560 --> 0:05:57.640
<v Speaker 1>f fifteen fighter jets to Israel in a deal valued

0:05:57.800 --> 0:06:01.240
<v Speaker 1>more than twenty billion dollars. The pack sends a message

0:06:01.240 --> 0:06:04.000
<v Speaker 1>that weapons will continue to flow to the state even

0:06:04.040 --> 0:06:07.000
<v Speaker 1>as it continues its war in Gaza. The Bowing jets

0:06:07.000 --> 0:06:09.800
<v Speaker 1>are not expected to be delivered to Israel until twenty

0:06:09.880 --> 0:06:13.600
<v Speaker 1>twenty nine at the earliest. Senior fellow at the Carnegie

0:06:13.640 --> 0:06:17.359
<v Speaker 1>Endowment for International Peace, Aaron David Miller, says that the

0:06:17.400 --> 0:06:20.600
<v Speaker 1>region is now at risk of falling into a multi

0:06:20.640 --> 0:06:21.359
<v Speaker 1>front war.

0:06:22.080 --> 0:06:24.440
<v Speaker 9>At some point the Iranians and his baller are going

0:06:24.480 --> 0:06:25.120
<v Speaker 9>to respond.

0:06:25.440 --> 0:06:28.560
<v Speaker 6>The only hope to avert a major escalation is a

0:06:28.600 --> 0:06:31.400
<v Speaker 6>ceasefire deal, and I just don't see it coming.

0:06:31.240 --> 0:06:35.240
<v Speaker 1>Together right now. Aaron David Miller there a former Middle

0:06:35.279 --> 0:06:39.160
<v Speaker 1>East peace negotiator for the US. He added his best

0:06:39.320 --> 0:06:42.240
<v Speaker 1>hope was that by November there could be a six

0:06:42.320 --> 0:06:45.160
<v Speaker 1>week ceasepar. The war in the Middle East has increasingly

0:06:45.240 --> 0:06:49.800
<v Speaker 1>weighed in US electoral politics, with Republicans accusing the government

0:06:49.839 --> 0:06:52.080
<v Speaker 1>of not doing enough to help Israel.

0:06:53.080 --> 0:06:57.840
<v Speaker 2>Suspected attempts by Iranian hackers to infiltrate US presidential campaigns

0:06:57.880 --> 0:07:02.400
<v Speaker 2>have touched off a widening federal investigation into election interference.

0:07:03.360 --> 0:07:06.880
<v Speaker 2>Investigators believe that attackers tied to Iran hacked into Republican

0:07:06.920 --> 0:07:11.040
<v Speaker 2>nominee Donald Trump's campaign and gained access to internal documents.

0:07:11.400 --> 0:07:14.040
<v Speaker 2>Sources who spoke to Bloomberg also say the intruders tried

0:07:14.040 --> 0:07:17.160
<v Speaker 2>to breach the campaigns of Vice President Kamala Harris and

0:07:17.280 --> 0:07:21.640
<v Speaker 2>President Joe Biden. However, it's unclear if those attempts succeeded.

0:07:22.280 --> 0:07:24.200
<v Speaker 2>In a moment, we're bringing more details and those results

0:07:24.200 --> 0:07:27.880
<v Speaker 2>from UBS plus look ahead to today's US inflation data.

0:07:27.920 --> 0:07:29.480
<v Speaker 2>But just a word on another story that caught her

0:07:29.520 --> 0:07:32.120
<v Speaker 2>eye this morning. Bloomberg City Lab columnist Julia Hobsbond's when

0:07:32.120 --> 0:07:36.080
<v Speaker 2>writing about Manchester having a moment, and this is partly

0:07:36.080 --> 0:07:38.640
<v Speaker 2>about the power of local government, a very hot debate

0:07:38.720 --> 0:07:41.240
<v Speaker 2>here in the UK. Pe doicument. It comes to planning,

0:07:41.360 --> 0:07:44.400
<v Speaker 2>for example, but also about the ambitions for the city

0:07:44.440 --> 0:07:47.600
<v Speaker 2>to become a fifteen minute city, you know, improve transport,

0:07:47.840 --> 0:07:52.320
<v Speaker 2>more walking involved, building more houses, redeveloping offices.

0:07:52.440 --> 0:07:55.400
<v Speaker 1>I think the interplay between the Metro mays in the UK,

0:07:55.720 --> 0:08:00.200
<v Speaker 1>including Andy Burnham in charge of macheson surrounding areas, and

0:08:00.240 --> 0:08:02.880
<v Speaker 1>the Labor government obviously a lot of the Metro well,

0:08:02.920 --> 0:08:06.080
<v Speaker 1>the majority of the Metro mayors are now also labor leading,

0:08:06.160 --> 0:08:08.040
<v Speaker 1>is going to be so interesting. And Julia, I think

0:08:08.080 --> 0:08:12.160
<v Speaker 1>writing about about Manchester is also kind of fascinating. I mean,

0:08:12.160 --> 0:08:16.240
<v Speaker 1>when we were up there for the political party conference

0:08:16.280 --> 0:08:19.720
<v Speaker 1>season up in Manchester, that feeling of that of kind

0:08:19.760 --> 0:08:23.360
<v Speaker 1>of regeneration and rebirth was really evident, and the fifteen

0:08:23.360 --> 0:08:25.960
<v Speaker 1>minute city was absolutely at the forefront of people's mind.

0:08:26.000 --> 0:08:28.240
<v Speaker 1>So I really like the column that she's written, of

0:08:28.280 --> 0:08:31.560
<v Speaker 1>course for Blueberg's City Lab when home building is such

0:08:31.560 --> 0:08:32.560
<v Speaker 1>a hot button issue.

0:08:32.679 --> 0:08:35.120
<v Speaker 2>Well, let's go to our top story now. And those

0:08:35.240 --> 0:08:37.959
<v Speaker 2>second quarter results from UBS analysts had been focused on

0:08:38.000 --> 0:08:40.560
<v Speaker 2>performance of the wealth management division and how quickly the

0:08:40.600 --> 0:08:43.240
<v Speaker 2>Swiss Bank is winding down its non core legacy units.

0:08:43.240 --> 0:08:46.640
<v Speaker 2>We've got our EMEA Managing editor for Finance and Investing,

0:08:46.679 --> 0:08:49.559
<v Speaker 2>Tom Metcalf with us for more. Morning, Tom, just take

0:08:49.600 --> 0:08:52.160
<v Speaker 2>us to the headline numbers from UBS. How did the

0:08:52.200 --> 0:08:53.360
<v Speaker 2>bank perform in this quarter?

0:08:53.720 --> 0:08:55.959
<v Speaker 9>Yeah, good morning. Look at first, blush, this looked like

0:08:56.000 --> 0:08:58.000
<v Speaker 9>a pretty solid set of results. I mean, the number

0:08:58.000 --> 0:09:01.520
<v Speaker 9>that stands out for me is in that wealth management business,

0:09:01.559 --> 0:09:04.880
<v Speaker 9>So they had twenty seven billion dollars of inflows client inflows,

0:09:05.559 --> 0:09:07.520
<v Speaker 9>and that is a very strong sign of people, you know,

0:09:07.559 --> 0:09:09.680
<v Speaker 9>buying into the franchise, and obviously those are the core

0:09:09.720 --> 0:09:12.719
<v Speaker 9>clients for UBS. You know, very very rich people. It's

0:09:12.760 --> 0:09:14.839
<v Speaker 9>the place where they want to put their money. So

0:09:14.920 --> 0:09:18.080
<v Speaker 9>that's very strong, and you know, it's hard to you know,

0:09:18.160 --> 0:09:20.560
<v Speaker 9>the profit really be estimates, but it's a bit difficult

0:09:20.600 --> 0:09:23.200
<v Speaker 9>to unpick that in terms of, you know, the operational

0:09:23.200 --> 0:09:26.520
<v Speaker 9>side because basically what's happened is Credit Swiss is fully integrated,

0:09:26.960 --> 0:09:28.760
<v Speaker 9>so you know, you will see jumps in revenue and

0:09:28.800 --> 0:09:31.800
<v Speaker 9>stuff stuff like that. But the other thing that they're

0:09:31.800 --> 0:09:34.840
<v Speaker 9>trying to integrate is obviously Credit Swiss and the fact

0:09:34.840 --> 0:09:36.960
<v Speaker 9>that they've managed to i think cut their legacy or

0:09:37.000 --> 0:09:39.480
<v Speaker 9>non care assets for something like forty two percent since

0:09:39.480 --> 0:09:43.080
<v Speaker 9>the year before goes to speak. I think to you know,

0:09:43.120 --> 0:09:45.760
<v Speaker 9>this message that hey, we are integrating, we are moving forward.

0:09:46.120 --> 0:09:47.600
<v Speaker 9>And certainly as I look at the you know, these

0:09:47.640 --> 0:09:50.199
<v Speaker 9>results as they come out, it does look like they

0:09:50.240 --> 0:09:53.280
<v Speaker 9>are just executing on that, and it's probably what shareholders

0:09:53.320 --> 0:09:55.120
<v Speaker 9>really want to see. They want to see, you know,

0:09:55.200 --> 0:09:57.400
<v Speaker 9>clients coming in, and also they want to make sure

0:09:57.400 --> 0:10:00.439
<v Speaker 9>that that credit Swiss business is incorporated and effect starts

0:10:00.440 --> 0:10:02.000
<v Speaker 9>to deliver like the UBS business has.

0:10:02.200 --> 0:10:04.800
<v Speaker 1>Yeah, that's very interesting, isn't it. What's the bank also

0:10:04.880 --> 0:10:07.160
<v Speaker 1>saying then about the future and about the third quarter.

0:10:07.880 --> 0:10:10.040
<v Speaker 9>Yeah, it's of a few interesting signs. It look at

0:10:10.440 --> 0:10:12.520
<v Speaker 9>like most bankers at SEN, hey we expect volatility in

0:10:12.600 --> 0:10:15.520
<v Speaker 9>the third quarter. Now, look that might not necessarily be

0:10:15.559 --> 0:10:18.000
<v Speaker 9>bad news for banks like UBS. So their equities traders,

0:10:18.000 --> 0:10:20.320
<v Speaker 9>for example, did fantastic well this quarter, and that's normally

0:10:20.640 --> 0:10:23.680
<v Speaker 9>helped by volatility. One of the things they did say

0:10:23.840 --> 0:10:26.640
<v Speaker 9>was they asked continuously clients kind of shift, as you'd expect,

0:10:26.640 --> 0:10:29.880
<v Speaker 9>into higher interest products. So that may well put pressure

0:10:29.920 --> 0:10:32.040
<v Speaker 9>on the margins, but you know, then again, when you

0:10:32.080 --> 0:10:34.320
<v Speaker 9>got twenty seven billion dollars coming in, you can probably

0:10:34.360 --> 0:10:36.000
<v Speaker 9>find ways to still make money.

0:10:36.200 --> 0:10:38.920
<v Speaker 2>Under credits to ease point is to say, integration progressing,

0:10:39.000 --> 0:10:41.959
<v Speaker 2>although another one point one billion dollars of expenses being

0:10:42.000 --> 0:10:45.960
<v Speaker 2>flagged in the third quarter as well. Where is UBS

0:10:45.960 --> 0:10:47.080
<v Speaker 2>in this process?

0:10:47.320 --> 0:10:49.280
<v Speaker 9>Yeah, it seems like they're on track. I mean, I

0:10:49.360 --> 0:10:51.959
<v Speaker 9>think they've sort of guided this year very much one

0:10:52.000 --> 0:10:54.400
<v Speaker 9>of those years of bringing the IT systems together, bringing

0:10:54.440 --> 0:10:58.120
<v Speaker 9>all the legal things into one, and that does involve

0:10:58.120 --> 0:11:00.240
<v Speaker 9>a lot of costs. I think what they're doing good

0:11:00.360 --> 0:11:02.840
<v Speaker 9>job of is very well flagging what those costs are

0:11:02.880 --> 0:11:05.440
<v Speaker 9>going to be. So at one point one billion you mentioned,

0:11:05.520 --> 0:11:07.280
<v Speaker 9>you know, that won't hopefully come as a surprise to

0:11:07.280 --> 0:11:10.360
<v Speaker 9>people next quarter, to us, And Yeah, for me, it

0:11:10.440 --> 0:11:13.080
<v Speaker 9>just seems like a so far as solid execution story.

0:11:13.080 --> 0:11:15.120
<v Speaker 9>And I think, you know, I know, we've got a

0:11:15.200 --> 0:11:17.760
<v Speaker 9>Matti coming on TV, the CEO of UBS, in a bit,

0:11:17.800 --> 0:11:20.160
<v Speaker 9>and I'm sure he'll be probably striking quite a sort

0:11:20.200 --> 0:11:21.120
<v Speaker 9>of a brilliant tone.

0:11:21.400 --> 0:11:25.160
<v Speaker 1>Yeah, absolutely, fully across the schedule. Then for this morning,

0:11:25.240 --> 0:11:29.120
<v Speaker 1>in terms of the buyback, how important a story is

0:11:29.160 --> 0:11:31.280
<v Speaker 1>that amidst all of this, I mean, as you say,

0:11:31.760 --> 0:11:33.080
<v Speaker 1>quite rosy news.

0:11:33.200 --> 0:11:35.480
<v Speaker 9>Yeah, exactly. So they're sort of reaffirming what they said

0:11:35.960 --> 0:11:39.160
<v Speaker 9>last quarter. Look, we will do this one billion sort

0:11:39.160 --> 0:11:41.040
<v Speaker 9>of buyback this year, and they've said we'll look to

0:11:41.080 --> 0:11:43.360
<v Speaker 9>do about two billion by the end of next So

0:11:43.760 --> 0:11:46.760
<v Speaker 9>again that message, hey, we're on track, that we're trying

0:11:46.800 --> 0:11:49.440
<v Speaker 9>to make no surprises here, and that was interesting for

0:11:49.480 --> 0:11:52.040
<v Speaker 9>me that, you know, this buyback had been well communicated,

0:11:52.080 --> 0:11:55.440
<v Speaker 9>but there was chatter sort of among analysts among she hells, hey,

0:11:55.440 --> 0:11:57.320
<v Speaker 9>are they going to sort of give us some comfort

0:11:57.360 --> 0:11:59.840
<v Speaker 9>around that, because obviously what we've seen in recent months

0:11:59.880 --> 0:12:02.800
<v Speaker 9>is real ding dong with the Swiss regulators. Yes, the

0:12:02.840 --> 0:12:04.600
<v Speaker 9>Swiss regulator saying hey, maybe you need to put up

0:12:04.640 --> 0:12:06.800
<v Speaker 9>more capital, and we're talking like, you know, billions. I

0:12:06.800 --> 0:12:09.160
<v Speaker 9>think some of the rangers given and go as high

0:12:09.160 --> 0:12:12.200
<v Speaker 9>as twenty five billion, which would be very drastic. So

0:12:12.240 --> 0:12:14.960
<v Speaker 9>we fascinated see how that plays out. I've only been

0:12:14.960 --> 0:12:16.880
<v Speaker 9>able to sort of scan the results. I didn't see

0:12:16.880 --> 0:12:20.440
<v Speaker 9>any mention of that, which is probably good tactics from UBS, right,

0:12:20.440 --> 0:12:22.719
<v Speaker 9>like keep a low profile and hopefully resolve all that

0:12:23.040 --> 0:12:24.120
<v Speaker 9>behind closed doors.

0:12:24.559 --> 0:12:26.920
<v Speaker 2>Okay, Tom Metca for our EMEA Managing editor of for

0:12:27.000 --> 0:12:28.240
<v Speaker 2>Finance and Investing, thank you.

0:12:29.040 --> 0:12:29.280
<v Speaker 4>Now.

0:12:29.360 --> 0:12:32.280
<v Speaker 1>The Atlanta FED person Raphael Bostick has said that he's

0:12:32.320 --> 0:12:35.600
<v Speaker 1>looking for a little more data before supporting a reduction

0:12:35.679 --> 0:12:39.120
<v Speaker 1>in interest rates. This ahead of today's US CPI print

0:12:39.160 --> 0:12:42.559
<v Speaker 1>for July, Bloomberg Economics expects a headline reading of two

0:12:42.640 --> 0:12:46.320
<v Speaker 1>point nine percent, a slight slowdown from June's reading. Our

0:12:46.360 --> 0:12:49.480
<v Speaker 1>executive editor for Asia Markets, Paul Dobson, joins us now

0:12:49.480 --> 0:12:51.560
<v Speaker 1>for more on this. Paul, good morning, Good to have

0:12:51.640 --> 0:12:54.080
<v Speaker 1>you with us. What are the expectations then for the

0:12:54.160 --> 0:12:58.480
<v Speaker 1>CPI print, which comes after, of course that softer producer

0:12:58.520 --> 0:13:01.080
<v Speaker 1>price inflation data that can came out yesterday.

0:13:01.600 --> 0:13:03.120
<v Speaker 8>The way that you just phrased it is right. The

0:13:03.160 --> 0:13:07.680
<v Speaker 8>market was already looking for a slowdown in CPI in

0:13:07.800 --> 0:13:13.120
<v Speaker 8>the data even before we got the PPI figures yesterday,

0:13:13.440 --> 0:13:16.280
<v Speaker 8>and that will only have given people more firm conviction

0:13:16.760 --> 0:13:19.040
<v Speaker 8>that the likelihood is that it will be a number

0:13:19.040 --> 0:13:21.680
<v Speaker 8>on the softer side, and that should give people more

0:13:21.760 --> 0:13:24.560
<v Speaker 8>encouragement that the Fed will be able to move closer

0:13:24.600 --> 0:13:27.680
<v Speaker 8>to cutting interest rates in the near future. I think

0:13:27.720 --> 0:13:30.160
<v Speaker 8>that what was interesting in the PPI numbers wasn't just

0:13:30.200 --> 0:13:33.800
<v Speaker 8>that the headline number was below expectations, but also some

0:13:33.880 --> 0:13:36.960
<v Speaker 8>of the input statistics, particularly the ones that the Fed

0:13:37.000 --> 0:13:40.959
<v Speaker 8>concentrates on when it's thinking about its own favorite inflation measure.

0:13:41.080 --> 0:13:44.080
<v Speaker 8>The court measures of CPI and the core PCE in

0:13:44.120 --> 0:13:47.400
<v Speaker 8>particular were also lower. So basically the market took some

0:13:47.480 --> 0:13:50.680
<v Speaker 8>encourage from that. We saw, on the one hand, lower

0:13:50.679 --> 0:13:53.960
<v Speaker 8>treasury yields and also a weaker dollar as a consequence

0:13:53.960 --> 0:13:56.559
<v Speaker 8>of that. Inequities on the other hand liked it pushing

0:13:56.640 --> 0:13:57.480
<v Speaker 8>higher across the board.

0:13:59.000 --> 0:14:01.600
<v Speaker 2>And the question of the risks of a US recession,

0:14:01.640 --> 0:14:04.640
<v Speaker 2>we've seen Goldman and JP Morgan you know, looking at

0:14:04.720 --> 0:14:08.080
<v Speaker 2>in their models that increased probability of that happening. How

0:14:08.080 --> 0:14:11.280
<v Speaker 2>do those perceptions feed into markets, you know, the cpipin

0:14:11.280 --> 0:14:13.600
<v Speaker 2>of course being part of that, and in Asia where

0:14:13.600 --> 0:14:15.200
<v Speaker 2>you are, but where some of the greatest term al

0:14:15.240 --> 0:14:16.360
<v Speaker 2>we're seen in the last week.

0:14:16.640 --> 0:14:20.120
<v Speaker 8>The question here is whether the fedken engineer a soft landing,

0:14:20.200 --> 0:14:23.400
<v Speaker 8>or whether the economy is slowing faster than it expected

0:14:23.440 --> 0:14:25.480
<v Speaker 8>and it's going to be something more ugly when we

0:14:25.560 --> 0:14:29.120
<v Speaker 8>hit the ground. So far, the market is probably pricing

0:14:29.160 --> 0:14:33.280
<v Speaker 8>in the more benevolent of those scenarios. Is looking for,

0:14:33.440 --> 0:14:35.560
<v Speaker 8>you know, the FED to kick off cutting interest rates,

0:14:35.800 --> 0:14:39.600
<v Speaker 8>most likely with one cut in September, with the possibility

0:14:39.640 --> 0:14:42.920
<v Speaker 8>of two cuts in September and then a couple more

0:14:43.280 --> 0:14:46.280
<v Speaker 8>by the end of the year probably, And you know,

0:14:46.440 --> 0:14:48.560
<v Speaker 8>that's as seen as the kind of a glide path

0:14:48.680 --> 0:14:51.440
<v Speaker 8>rather than a slamming on of the bright in order

0:14:51.480 --> 0:14:54.720
<v Speaker 8>to lower interest rates without having to panic or anything

0:14:54.800 --> 0:14:57.800
<v Speaker 8>like that. Now, the thing is, it's that labor data, right,

0:14:57.840 --> 0:15:00.200
<v Speaker 8>which is the problem. Was it was a lower than

0:15:00.240 --> 0:15:02.440
<v Speaker 8>expected figure that we saw at the start of this month,

0:15:02.880 --> 0:15:06.840
<v Speaker 8>and that set hearts racing somewhat about the possibility that actually,

0:15:07.080 --> 0:15:10.080
<v Speaker 8>you know, the FED is moving too late or too slow,

0:15:10.360 --> 0:15:13.800
<v Speaker 8>and that the US economy is already slowing much faster,

0:15:14.040 --> 0:15:16.520
<v Speaker 8>you know, at at a much more worrying pace. And

0:15:16.560 --> 0:15:18.920
<v Speaker 8>if that's the case, then maybe the Fed will need

0:15:18.960 --> 0:15:20.760
<v Speaker 8>to cut interest rates much more aggressively.

0:15:21.640 --> 0:15:24.360
<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

0:15:24.440 --> 0:15:27.480
<v Speaker 2>stories making news from London to Wall Street and beyond.

0:15:27.760 --> 0:15:30.960
<v Speaker 1>Look for us on your podcast feed every morning, on Apple,

0:15:31.080 --> 0:15:33.800
<v Speaker 1>Spotify and anywhere else you get your podcasts.

0:15:33.840 --> 0:15:36.840
<v Speaker 2>You can also listen live each morning on London Dab Radio,

0:15:36.880 --> 0:15:40.640
<v Speaker 2>the Bloomberg Business app, and Bloomberg dot Com.

0:15:40.680 --> 0:15:43.440
<v Speaker 1>Our flagship New York station is also available on your

0:15:43.480 --> 0:15:48.200
<v Speaker 1>Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

0:15:48.440 --> 0:15:49.760
<v Speaker 1>I'm Caroline Hepka and.

0:15:49.680 --> 0:15:52.320
<v Speaker 2>I'm Stephen Carroll. Join us again tomorrow morning for all

0:15:52.360 --> 0:15:54.800
<v Speaker 2>the news you need to start your day, right here

0:15:54.840 --> 0:16:02.320
<v Speaker 2>on Bloomberg Daybreak Europe