Speaker 1: Good morning. It's Friday, the twenty seventh of October in London.
Speaker 1: This is the Bloomberg Daybreak Euroate podcast. I'm Stephen Carroll.
Speaker 1: Coming up today, American forces strike Iran linked targets in
Speaker 1: Syria as Tehran warns the US won't be spared if
Speaker 1: the Israel Hamas war spreads. The ECB's decision to hold
Speaker 1: rate steady delivers relief to a highly indebted Italy, but
Speaker 1: for how long? And a forty K cut at one
Speaker 1: of the Big Four EY slashes UK partner payouts as
Speaker 1: economic uncertainty grows. Let's start with a roundup of our
Speaker 1: top stories. The United States says it hit two facilities
Speaker 1: in eastern Syria it believes were used by Iran's Islamic
Speaker 1: Revolutionary Guard following repeated attacks on US forces in the region.
Speaker 1: The strikes come as Iran's foreign minister warned the US
Speaker 1: won't be spared if the war between Israel and Hamas spreads. Meanwhile,
Speaker 1: the United Nations Security Council failed to reach an agreement
Speaker 1: on calling for a humanitarian ceasefire in Gaza. Francis U
Speaker 1: and Ambassador Nicolade rivieer Is dismayed the.
Speaker 2: Security Council is stock is very disappointing. We should get
Speaker 2: back to negotiation, do a compromise, prioritize humanitarian access, this
Speaker 2: humanity and pause while recognizing the right of Israel to
Speaker 2: defund itself.
Speaker 1: Nicolad Riviev spoke as the Israeli army reportedly made further
Speaker 1: overnight ground raids into northern Gaza following wednesday nights limited
Speaker 1: incursion with infantry and tanks reports from Gaza's health ministry.
Speaker 1: Gaza's Hamas run Health Ministry says seven thousand people have
Speaker 1: now been killed in air strikes on the territory. Katar's
Speaker 1: senior hostage negotiator has warned that an escalation in the
Speaker 1: conflict will hamper efforts to secure the safe release of captives.
Speaker 1: The country's Minister of State, Mohammad al Kulafi, says all
Speaker 1: civilian hostages in Gaza can be released in the coming days,
Speaker 1: but a pause in the fighting is needed.
Speaker 3: If there's a continuing bombing, our task is getting more difficult.
Speaker 3: The mediators need a period of calm, a situation where
Speaker 3: we can speak easily to both parts and try to
Speaker 3: be more creative in bringing more initiatives that can get
Speaker 3: those civilians out.
Speaker 1: Those comments from Katar's senior hostage negotiator come as Israel's
Speaker 1: military said it had killed Hamas's deputy head of intelligence
Speaker 1: in an airstrike on Gaza. In a statement, the Israel
Speaker 1: Defense Forces said that Shaddi Barud was one of the
Speaker 1: key figures behind the October seventh attacks that killed fourteen
Speaker 1: hundred people. To other News Now and the European Central
Speaker 1: Bank has left interest rates unchanged for the first time
Speaker 1: in more than a year, following last month's knife edge
Speaker 1: decision to lift the rate to a record four percent.
Speaker 1: Policymakers kept it there on Thursday, and ECB president Christine
Speaker 1: Leagald says markets shouldn't expect them to come down from
Speaker 1: there anytime soon.
Speaker 4: We are determined to ensure that inflation returns to our
Speaker 4: two percent medium term target in a timely manner. Based
Speaker 4: on our current we consider that the key ECB interest
Speaker 4: rates are at levels that maintain for a sufficiently long
Speaker 4: duration will make a substantial contribution to this goal.
Speaker 1: Christine Laguard also insisted the Central Bank didn't even discuss
Speaker 1: a faster windown of its pandemic bond buying program. The
Speaker 1: comments offer a welcome relief to Italy at a time
Speaker 1: when investors are wondering if the country could soon be
Speaker 1: cut to junk as borrowing costs on its massive national
Speaker 1: debt soar. Janet Yellen says the surge in treasury yields
Speaker 1: is tied to the strength of the economy rather than
Speaker 1: the widening fiscal deficit. The US Treasury secretary Toel Bloomberg,
Speaker 1: bond prices touching levels not seen since the financial crisis
Speaker 1: is a reflection of consumer resilience.
Speaker 5: We're seeing yields go up in most advanced countries. Part
Speaker 5: of the increase in yields, I think is simply a
Speaker 5: reflection of the strength of the economy, the notion and
Speaker 5: that interest rates will be higher for longer.
Speaker 1: Yellen's view clashes with some bond market participants, who pointed
Speaker 1: the sharp increase in the American government's deficit as a
Speaker 1: cause of the jump in yields the after third course.
Speaker 1: After third quarter US growth came in at four point
Speaker 1: nine percent, the top US financial official said she wouldn't
Speaker 1: be surprised if the US posts at growth rate of
Speaker 1: two and a half percent for twenty twenty three. Amazon
Speaker 1: dot Com reported quarterly revenue the topped analyst estimates. The
Speaker 1: story now from Bloomberg's Charlie Palace.
Speaker 6: Amazon got a lift from rising sales in its retail
Speaker 6: and cloud computing units. Revenue gained thirteen percent to one
Speaker 6: hundred forty three point one billion dollars during the three
Speaker 6: months ending September thirtieth. Analysts, on average estimated one hundred
Speaker 6: forty one point six billion. According to data compiled by Bloomberg,
Speaker 6: Amazon shares have increased more than forty percent this year
Speaker 6: thanks to fading recession fore and CEO Andy Jesse's determination
Speaker 6: to rain in pandemic era spending and boost profits. In
Speaker 6: New York Charlie Pellett Bloomberg.
Speaker 1: Radio, shares in Intel have jumped out of the chip
Speaker 1: maker predicted a return to sales growth this quarter. Intel's
Speaker 1: forecasting sales for the period will be a head of
Speaker 1: analyst estimates between fourteen point six and fifteen point six
Speaker 1: billion dollars. The company says the PC market is through
Speaker 1: the worst of a historic slump. The firm also reported
Speaker 1: that it's now winning new customers for its outsourced manufacturing division,
Speaker 1: and Ernst and Young partners in the UK saw their
Speaker 1: share of profits drop for the first time in three years.
Speaker 1: The forty thousand pound cut is the latest in a
Speaker 1: wave of economic uncertainty hitting the big four audit firms.
Speaker 1: Ewan Potts has more with few ideals to advise on
Speaker 1: and clients cutting costs. Accountants of feeling the pinch Ey's
Speaker 1: UK division and recently cut five percent of jobs in
Speaker 1: financial services and now they're shrinking their two hundred and
Speaker 1: twenty million pounds bonus pool by thirty percent. The big
Speaker 1: four accounting firms are also facing increased scrutiny over the
Speaker 1: quality of their audits after a series of high profile collapses,
Speaker 1: including Karellion and batisri Valery in London.
Speaker 6: I'm your in pots Bloomberg Radio.
Speaker 1: Those are your top stories on the markets. The MSCI
Speaker 1: Asia Pacific Index is one point one percent now, excuse me,
Speaker 1: it's one percent higher now. Eurostocks fifty futures are at
Speaker 1: by three tenths of one percent, and the tenure treasure
Speaker 1: yield as a basis point higher this morning at four
Speaker 1: point eighty six percent. Let's get more detail on the
Speaker 1: rising regional tensions in the Middle East over the Israel
Speaker 1: Hamas War, Iran's foreign minister warning the US won't escape
Speaker 1: unaffected if the conflict spreads. This after the White House
Speaker 1: said they sent a direct message to Tehran warning against
Speaker 1: targeting US military personnel and the region, and we've been
Speaker 1: learning about more strikes on Syria targets in Syria linked
Speaker 1: to around this morning to our AMA and News director
Speaker 1: in Roslin Mathison is with us in studio for more.
Speaker 1: Good morning to you, raz Let's start with this apparent
Speaker 1: rationing up of tensions between the US and Iran and
Speaker 1: learning of more strikes on Syria targets too. What can
Speaker 1: you tell us, Well.
Speaker 7: That's right. What we know is the US says that
Speaker 7: struck several sites inside Syria, that it said we're being
Speaker 7: used by Iran's Islamic Revolutionary Guard. That says we've seen
Speaker 7: an escalation in attacks on US troops in the region.
Speaker 7: I mean, it's not unusual for there to be things
Speaker 7: like drone strikes and so on on US bases in
Speaker 7: the area, but there has been a pick up in
Speaker 7: that in recent weeks, obviously since the Hamas attack on Israel.
Speaker 7: You do have a lot of US military assets in
Speaker 7: the region and that's only increasing. And we know, of
Speaker 7: course that US warships shot down several missiles fired a
Speaker 7: week or so ago by Huthy rebels out of Yemen,
Speaker 7: seemingly aimed somewhere north. And we know there's been an escalation,
Speaker 7: as I said, those drowne and other rocket attacks on
Speaker 7: US troops based in places like Iraq, and so we're
Speaker 7: seeing the little by little the sense the US is
Speaker 7: being drawn into this somehow. Obviously there's no sense that
Speaker 7: US wants to get militarily involved in what's happening exactly
Speaker 7: inside Israel and Gaza. But there's lots of outfits operating
Speaker 7: in this region, lots of proxy groups operating in this
Speaker 7: region on behalf of Iran and other nations, and they're
Speaker 7: obviously using this moment to test the boundaries here. And
Speaker 7: so the risk is that you just get a further
Speaker 7: pick up in these attacks on US soldiers and at
Speaker 7: some point you get a more significant one than we've
Speaker 7: seen so far.
Speaker 1: And the rahtoric that we're hearing then from political leaders
Speaker 1: on this as well has also been stepped up. This
Speaker 1: warning from Iran's Phari Meers or the US won't escape unaffected.
Speaker 1: How significant is that?
Speaker 7: Well, it's interesting, of course that they're saying this in
Speaker 7: the US warning around quite publicly. But the interesting also,
Speaker 7: it's just very clear that Iran and the US are
Speaker 7: kind of talking in back channel ways but also publicly
Speaker 7: to each other, and that's a bit unusual. The US
Speaker 7: normally keeps these communications very much to themselves and don't
Speaker 7: advertise them. And what they're saying is, yeah, we're in
Speaker 7: touch as much as we can with Iran and through
Speaker 7: other channels potentially into Iran. And the messaging is the same,
Speaker 7: don't pull us into this thing, and don't get involved yourselves,
Speaker 7: because of course Iran again has its fingers in many,
Speaker 7: many proxies in the region, and they could come at
Speaker 7: the US in multiple ways, not just Hermas but of
Speaker 7: course Hesbola of course are the who theis in Yemen
Speaker 7: and more, and so very much a level of concern
Speaker 7: about the risk of a broadening conflict. And so while
Speaker 7: you're getting those public statements of rhetoric and obviously sort
Speaker 7: of fell in fiery ratoric in return from Iran. Was
Speaker 7: interesting to me is it's quite clear that they're talking
Speaker 7: to each other about this at.
Speaker 1: Least, yes, and we without for further developments as well. Meanwhile,
Speaker 1: Bloomberg has learned that Israel is looking for the help
Speaker 1: of spyware companies when it comes to tracking the hostages
Speaker 1: that are still in Gaza.
Speaker 7: Well, that's right. It's quite interesting to learn that some
Speaker 7: of these spyware companies, including NSO which makes Pegasus spyware,
Speaker 7: which I'm sure many of us have heard of, they're
Speaker 7: enlisting these companies and their services to try and track
Speaker 7: the hostages that are in Gaza. And many of these
Speaker 7: companies are saying, yes, we'll give you our services for free,
Speaker 7: and maybe they can be involved in other aspects of
Speaker 7: this conflict between Israel and Hamas. Of course, that's not
Speaker 7: necessarily without controversy though, because, as I said, the Pegasus software,
Speaker 7: that company is blacklisted by the US and other countries,
Speaker 7: as are other operators in that fielding you, a few
Speaker 7: years ago, there were revelations that this software had been
Speaker 7: sold to some fairly authoritarian regimes around the world, multiple countries,
Speaker 7: that we're using it potentially to spy on dissidents, on
Speaker 7: journalists and so on, and so this company is not
Speaker 7: exactly without controversy, as I said, But right now it's
Speaker 7: spyware's proving quite useful, shall we say, in efforts to
Speaker 7: trying to locate these sausages at.
Speaker 1: The same time, just back to the diplomacy for a moment,
Speaker 1: no agreement to the UN Security Council on a humanitarian
Speaker 1: cease far EU leaders agreeing to call for humanitarian corridors
Speaker 1: and pauses, and that was a very hard one compromise
Speaker 1: as well.
Speaker 7: Well, that's right. It's interesting seeing this sort of word
Speaker 7: salad in essence that's going on. Is anyone willing to
Speaker 7: call it a cease fire? It doesn't seem so, because
Speaker 7: that might have bigger connotations. But essentially what they're doing
Speaker 7: is sort of trying to get a cease far a
Speaker 7: pause in fighting that if you were to call it that,
Speaker 7: including the aerial bombardment that's been going on by both sides,
Speaker 7: Israel into Gaza and Hamas is still sort of firing
Speaker 7: rockets at Israel. The idea, as you say, is to
Speaker 7: get enough of a break to allow more of the
Speaker 7: humanitarian aid to go in. So there's no suggestion that
Speaker 7: any kind of pause slash ceaspire would be a long one,
Speaker 7: or how long it might go for, or that it
Speaker 7: would stop a potential ground invasion of Israel. It's certainly
Speaker 7: none of that it's just simply to allow some of
Speaker 7: their aid potentially to get through.
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