WEBVTT - US Treasury Yields Spike & UK May Roll Back EU's MiFID II Rules

0:00:02.800 --> 0:00:05.480
<v Speaker 1>Good morning. It's finally the seventh of July in London.

0:00:05.559 --> 0:00:08.200
<v Speaker 1>This is the Bloomberg Daybreak You Up Podcast. I'm Caroline

0:00:08.240 --> 0:00:08.840
<v Speaker 1>Hepka and.

0:00:08.800 --> 0:00:11.760
<v Speaker 2>I'm Stephen Carroll. Coming up today, A job to do.

0:00:12.039 --> 0:00:15.680
<v Speaker 2>US treasury yields have soared after stronger labor market data

0:00:15.920 --> 0:00:19.200
<v Speaker 2>push rate bets for the Federal Reserve even higher.

0:00:19.160 --> 0:00:23.159
<v Speaker 1>Rallying in Asia. UBS's global wealth chief goes hunting for

0:00:23.280 --> 0:00:26.400
<v Speaker 1>new assets as the Swiss banking chant looks beyond the

0:00:26.440 --> 0:00:28.720
<v Speaker 1>credit sweet takeover, plus.

0:00:28.440 --> 0:00:31.280
<v Speaker 2>The UK government planning to roll back an EU ban

0:00:31.480 --> 0:00:35.199
<v Speaker 2>on free investment research for clients. Let's start with a

0:00:35.240 --> 0:00:38.360
<v Speaker 2>roundup of our top stories. US treasury yields shooting to

0:00:38.400 --> 0:00:42.080
<v Speaker 2>their highest level in fifteen years after surprisingly strong US

0:00:42.200 --> 0:00:45.320
<v Speaker 2>jobs data. Markets are now bracing for today's non farm

0:00:45.320 --> 0:00:48.599
<v Speaker 2>payrolls numbers after ADP data on Thursday show the US

0:00:48.720 --> 0:00:52.240
<v Speaker 2>companies adding almost half a million jobs last month. That's

0:00:52.280 --> 0:00:55.240
<v Speaker 2>the most and over a year. Dallas Federal Reserve President

0:00:55.280 --> 0:00:58.520
<v Speaker 2>Larrie Logan says more interest rate increases will likely be

0:00:58.640 --> 0:01:00.880
<v Speaker 2>needed to spur meaning full disinflation.

0:01:01.760 --> 0:01:06.080
<v Speaker 3>I remain concerned about whether inflation will return to target

0:01:06.120 --> 0:01:09.600
<v Speaker 3>in a sustainable and timely way, and I think more

0:01:09.640 --> 0:01:13.240
<v Speaker 3>restrictive monetary policy will be needed to achieve the fomc's

0:01:13.280 --> 0:01:16.319
<v Speaker 3>goals of stable prices and maximum employment.

0:01:16.720 --> 0:01:19.240
<v Speaker 2>LOSTALLUS FADED President Laur Logan speaking at a Central Bank

0:01:19.280 --> 0:01:22.640
<v Speaker 2>Research Association forum in New York. Economists surveyed by Bloomberg

0:01:22.720 --> 0:01:25.480
<v Speaker 2>are expecting today's non farm payrolls to show two hundred

0:01:25.520 --> 0:01:28.319
<v Speaker 2>and thirty thousand jobs were created last month, which would

0:01:28.360 --> 0:01:31.200
<v Speaker 2>be a significant slowdown on the May figure.

0:01:31.959 --> 0:01:35.520
<v Speaker 1>US Treasury Secretary Janet Yellen is meeting Chinese Premier Lee

0:01:35.680 --> 0:01:39.319
<v Speaker 1>Kiang today as part of her trip pamed at stabilizing

0:01:39.400 --> 0:01:42.960
<v Speaker 1>four ties between the world's two largest economies. So far,

0:01:43.080 --> 0:01:46.080
<v Speaker 1>Yellen has already met Central Bank Governor Yi Gang and

0:01:46.360 --> 0:01:50.160
<v Speaker 1>former Vice Premier Liu Her. Former US Treasury official and

0:01:50.200 --> 0:01:54.120
<v Speaker 1>now TCW Group senior analyst, David Lowinger says that this

0:01:54.280 --> 0:01:58.240
<v Speaker 1>trip is about risk management and avoiding misunderstanding.

0:02:00.080 --> 0:02:03.160
<v Speaker 4>The US channel relationship is at its lowest point in

0:02:03.240 --> 0:02:07.680
<v Speaker 4>over fifty years. There's all kinds of accidents waiting to happen,

0:02:08.120 --> 0:02:13.280
<v Speaker 4>and communications are vital and e economic officials in the

0:02:13.360 --> 0:02:16.320
<v Speaker 4>US and China just don't know each other, and you

0:02:16.480 --> 0:02:19.800
<v Speaker 4>want to set up those lines of communications before the

0:02:19.880 --> 0:02:21.120
<v Speaker 4>crisis happened.

0:02:22.080 --> 0:02:26.280
<v Speaker 1>David Lowing, a former US Treasury senior coordinator for China affairs.

0:02:26.520 --> 0:02:29.760
<v Speaker 1>He was speaking as Bloomberg has learned that US officials

0:02:29.760 --> 0:02:33.639
<v Speaker 1>started a fresh round of inspections of new listed Chinese companies.

0:02:33.960 --> 0:02:37.480
<v Speaker 1>People familiar with the matter saying around a dozen firms

0:02:37.600 --> 0:02:41.359
<v Speaker 1>audits were being reviewed, including ten Cent and dd.

0:02:41.880 --> 0:02:45.119
<v Speaker 2>UBS's global welschief Ikbal Khan is looking to find net

0:02:45.360 --> 0:02:48.280
<v Speaker 2>new money for the bank in Asia. Bloomberg's Brian Cursis

0:02:48.280 --> 0:02:49.240
<v Speaker 2>has more from Hong Kong.

0:02:49.360 --> 0:02:52.440
<v Speaker 5>Cohn is back in Asia gunning for new assets after

0:02:52.480 --> 0:02:55.840
<v Speaker 5>the firm's takeover of Credit Suitez. People familiar say CON

0:02:55.840 --> 0:02:58.920
<v Speaker 5>hosted receptions for hundreds of wealth staff in Hong Kong

0:02:58.960 --> 0:03:02.320
<v Speaker 5>and Singapore. Sure it was to celebrate the two firms

0:03:02.360 --> 0:03:06.280
<v Speaker 5>coming together, but the underlying message was clear find net

0:03:06.360 --> 0:03:09.720
<v Speaker 5>new money. Conn is betting that Asia will generate lucrative

0:03:09.760 --> 0:03:13.359
<v Speaker 5>fees even as Credit Suisse suffers outflows in other regions.

0:03:13.800 --> 0:03:17.000
<v Speaker 5>With the takeover, UBS will have more relationship managers in

0:03:17.080 --> 0:03:21.160
<v Speaker 5>Asia than its rivals DBS and HSBC combined in on

0:03:21.320 --> 0:03:24.840
<v Speaker 5>Kong praying credits, Bloomberg debreak Hero the UK.

0:03:24.840 --> 0:03:27.959
<v Speaker 1>Is planning to roll back the European Union's mified too

0:03:28.240 --> 0:03:31.840
<v Speaker 1>ban on free research for clients. Bloomberg understands that Jeremy

0:03:31.919 --> 0:03:34.800
<v Speaker 1>Hunt will unveil the step on Monday as part of

0:03:34.840 --> 0:03:38.840
<v Speaker 1>a review of rules. Bloomberg's Tom McKenzie reports it.

0:03:38.800 --> 0:03:41.560
<v Speaker 6>Looks like Miffed Too may be scrapped in the UK.

0:03:41.800 --> 0:03:44.120
<v Speaker 6>The Chancellor is expected to make an announcement in his

0:03:44.240 --> 0:03:47.520
<v Speaker 6>Mansion House speech on Monday to accept the findings of

0:03:47.600 --> 0:03:51.120
<v Speaker 6>a lawyer led review. The key piece of EU legislation

0:03:51.320 --> 0:03:55.200
<v Speaker 6>forced financial firms to separate the cost of investment research

0:03:55.640 --> 0:04:00.000
<v Speaker 6>from trading expenses, but critics say it resulted in less

0:04:00.000 --> 0:04:03.640
<v Speaker 6>investment research being made available. Rolling it back may be

0:04:03.760 --> 0:04:06.840
<v Speaker 6>part of the Chancellor's efforts to boost the attractiveness of

0:04:06.920 --> 0:04:11.480
<v Speaker 6>the UK's financial services in London. I'm Tom McKenzie, Bloomberg

0:04:11.520 --> 0:04:12.440
<v Speaker 6>day Break, Europe.

0:04:13.160 --> 0:04:16.040
<v Speaker 2>The leaders of Sweden and Turkey will meet ahead of

0:04:16.040 --> 0:04:19.480
<v Speaker 2>a NATO summit and Vilnius on Monday. Natosakus General Yain

0:04:19.520 --> 0:04:22.440
<v Speaker 2>Steltenberg is trying to make progress on Sweden's accession to

0:04:22.480 --> 0:04:27.039
<v Speaker 2>the Alliance after inconclusive talks yesterday. Speaking to Bloomberg, Sweden's

0:04:27.040 --> 0:04:29.839
<v Speaker 2>Foreign minister, Tobias Bilstrom said they would like to see

0:04:29.880 --> 0:04:31.760
<v Speaker 2>a clear response from Turkey.

0:04:32.839 --> 0:04:36.200
<v Speaker 7>We have reteriated over and over again. But we live

0:04:36.279 --> 0:04:39.000
<v Speaker 7>in a world now following russia suggression in Ukraine, but

0:04:39.160 --> 0:04:41.920
<v Speaker 7>is very unstable and that is shown not at least

0:04:41.920 --> 0:04:44.040
<v Speaker 7>in the part of the world where we live, namely

0:04:44.160 --> 0:04:48.159
<v Speaker 7>the northern part of Europe. Sweden joining the NATO is

0:04:48.200 --> 0:04:50.480
<v Speaker 7>going to bring a lot more security to the table.

0:04:50.640 --> 0:04:52.919
<v Speaker 7>Sweden not being present in NATO is going to do

0:04:53.040 --> 0:04:54.640
<v Speaker 7>exactly the opposite.

0:04:54.760 --> 0:04:57.320
<v Speaker 2>That was Tobias Beltrum, Sweden's foreign minister, speaking to Bloomberg

0:04:57.320 --> 0:04:59.520
<v Speaker 2>ahead of the NATO summit in Lithuania on Monday.

0:05:00.160 --> 0:05:04.000
<v Speaker 1>And finally, Samsung has reported its worst decline in quarterly

0:05:04.080 --> 0:05:07.040
<v Speaker 1>revenue since at least two thousand and nine. Shares slid

0:05:07.120 --> 0:05:10.039
<v Speaker 1>two percent in Seoul, with a vestas uncertain when a

0:05:10.200 --> 0:05:14.320
<v Speaker 1>year long electronics in memory chip demand slump will actually end.

0:05:14.680 --> 0:05:17.839
<v Speaker 1>The Korean tech john's twenty two percent decline in sales

0:05:18.000 --> 0:05:21.479
<v Speaker 1>was larger than expected, though the ninety six percent drop

0:05:21.520 --> 0:05:25.920
<v Speaker 1>in operating profit was less bad than forecasts. Those are

0:05:26.080 --> 0:05:27.440
<v Speaker 1>top stories.

0:05:27.360 --> 0:05:30.839
<v Speaker 2>Well something to think about on this Friday morning, especially

0:05:30.880 --> 0:05:34.000
<v Speaker 2>as the weather is heating up again, summer travel everyone's

0:05:34.000 --> 0:05:37.240
<v Speaker 2>looking forward to there's summer holidays. Not wait, somebody's coming

0:05:37.279 --> 0:05:38.719
<v Speaker 2>up in the papers in a moment about that. But

0:05:38.920 --> 0:05:42.200
<v Speaker 2>I do recommend today the piece from Andrea Felstadt, our

0:05:42.200 --> 0:05:46.680
<v Speaker 2>Bloomberg opinion columnist about the phenomenon of peak holiday travel

0:05:46.680 --> 0:05:49.640
<v Speaker 2>and that actually twenty twenty through twenty twenty three may

0:05:49.800 --> 0:05:52.039
<v Speaker 2>see the peak in that as well. And this is

0:05:52.080 --> 0:05:55.440
<v Speaker 2>partly linked to what we've heard from airlines, for example,

0:05:55.440 --> 0:05:57.520
<v Speaker 2>over the past few months about how seats are going

0:05:57.560 --> 0:06:00.440
<v Speaker 2>to remain more expensive post COVID book of a whole

0:06:00.560 --> 0:06:05.159
<v Speaker 2>range of reasons. But of course higher interest rates going

0:06:05.200 --> 0:06:08.080
<v Speaker 2>to feed into people spending. People are still spending on

0:06:08.120 --> 0:06:09.800
<v Speaker 2>holidays for now, we know that from all of the

0:06:09.839 --> 0:06:13.720
<v Speaker 2>reports we've gotten recently out of travel related companies. But

0:06:13.839 --> 0:06:15.880
<v Speaker 2>the question is when we get to this time next year,

0:06:15.960 --> 0:06:17.800
<v Speaker 2>will people be that much worse off that they won't

0:06:17.800 --> 0:06:19.320
<v Speaker 2>be able to afford their summer holidays.

0:06:19.360 --> 0:06:21.680
<v Speaker 1>Well, and also there was the you know, the revenge

0:06:21.760 --> 0:06:26.040
<v Speaker 1>travel theme too, was definitely there after COVID, that people

0:06:26.160 --> 0:06:29.640
<v Speaker 1>wanted to go to wonderful, far flung places to enjoy themselves,

0:06:30.080 --> 0:06:32.400
<v Speaker 1>which they'd missed out on. But yes, you're right, interest

0:06:32.480 --> 0:06:35.800
<v Speaker 1>rates and also the fact that those holidays and the

0:06:35.839 --> 0:06:37.960
<v Speaker 1>weeks in the sun are much more expensive now than

0:06:38.000 --> 0:06:41.160
<v Speaker 1>they were previously because of inflation. That actually that may

0:06:41.320 --> 0:06:46.000
<v Speaker 1>not be sustainable. So the industry, airline industry, hotel industries

0:06:46.040 --> 0:06:48.640
<v Speaker 1>done quite well, but maybe that won't continue. Yeah, piece

0:06:48.720 --> 0:06:49.159
<v Speaker 1>is very good.

0:06:49.240 --> 0:06:50.800
<v Speaker 2>Yeah, and she also digs into the idea of how

0:06:50.800 --> 0:06:53.200
<v Speaker 2>people are also booking later, partly because of those those

0:06:53.240 --> 0:06:55.479
<v Speaker 2>price challenges as well. So anyway, worth the read if

0:06:55.480 --> 0:06:57.400
<v Speaker 2>you're thinking about your summer holidays this morning.

0:06:57.880 --> 0:07:02.520
<v Speaker 1>Yeah. Now dogged least on US employment, boosted expectations for

0:07:02.560 --> 0:07:06.040
<v Speaker 1>interest rates and saw treasuries tank. On Thursday, benchmark treasury

0:07:06.080 --> 0:07:09.279
<v Speaker 1>yields have ropped back through four percent, and those on

0:07:09.320 --> 0:07:13.160
<v Speaker 1>Bloomberg's index of global government bonds have hit a fifteen

0:07:13.280 --> 0:07:15.960
<v Speaker 1>year high. Joining US now. Bloomberg's executive editor for Agent

0:07:16.040 --> 0:07:18.680
<v Speaker 1>Markets Paul Dobson, and you're actually in the radio studio

0:07:18.680 --> 0:07:21.320
<v Speaker 1>in London, Paul, lovely to have you with US. Markets

0:07:21.320 --> 0:07:23.800
<v Speaker 1>are now bracing for the non farm pay rolls today.

0:07:23.840 --> 0:07:27.320
<v Speaker 1>What should we expect from today's figures because that was

0:07:27.360 --> 0:07:29.040
<v Speaker 1>the big driver yesterday ADP.

0:07:29.280 --> 0:07:31.840
<v Speaker 8>Yeah, absolutely, and so I guess people really don't know

0:07:31.880 --> 0:07:34.280
<v Speaker 8>what to expect. I mean, the ADP figure was so

0:07:34.800 --> 0:07:38.560
<v Speaker 8>remarkably strong and such an outlier relative today's expectations, and

0:07:38.600 --> 0:07:42.560
<v Speaker 8>that's why we saw a rather extreme reaction in the markets.

0:07:43.880 --> 0:07:47.480
<v Speaker 8>The ADP has not always been the best predictor of

0:07:47.640 --> 0:07:50.520
<v Speaker 8>what the non farm payrolls report shows are. The following

0:07:50.600 --> 0:07:54.560
<v Speaker 8>day that said, I guess we're now all rushed to

0:07:54.560 --> 0:07:56.280
<v Speaker 8>the other side of the ship and we're all expecting

0:07:56.320 --> 0:07:58.600
<v Speaker 8>a very big number again today here, and so we'll

0:07:58.640 --> 0:08:00.600
<v Speaker 8>be keeping an eye not just on the headline figure

0:08:00.640 --> 0:08:03.680
<v Speaker 8>of course, but on the average hourly wages numbers as well,

0:08:03.800 --> 0:08:06.560
<v Speaker 8>so tend to tell us more about what the inflationary

0:08:07.640 --> 0:08:08.240
<v Speaker 8>outlook is.

0:08:08.840 --> 0:08:12.320
<v Speaker 2>Yeah, certainly. I mean, looking at the reaction in bond markets,

0:08:12.360 --> 0:08:15.320
<v Speaker 2>this huge routing trousurries. Now looking at your yield over

0:08:15.440 --> 0:08:19.480
<v Speaker 2>five percent for trousuries this morning. This is affecting markets

0:08:19.520 --> 0:08:20.000
<v Speaker 2>all over the.

0:08:19.920 --> 0:08:23.880
<v Speaker 8>World, absolutely, and we saw the rises in bond yields,

0:08:23.920 --> 0:08:26.960
<v Speaker 8>or the sell off in bond prices carry on through

0:08:27.000 --> 0:08:30.600
<v Speaker 8>to ages today, lifting those interest rates in markets like

0:08:30.680 --> 0:08:33.760
<v Speaker 8>Australia too. I think it's really interesting that we have

0:08:33.880 --> 0:08:37.720
<v Speaker 8>that global aggregate index average yields back up to the

0:08:37.760 --> 0:08:41.440
<v Speaker 8>highest level since two thousand and eight, and returns on

0:08:41.600 --> 0:08:44.920
<v Speaker 8>government bonds or on global bonds for the year are

0:08:44.920 --> 0:08:48.520
<v Speaker 8>now basically back to zero. When you know, at the

0:08:48.520 --> 0:08:50.520
<v Speaker 8>start of the year, everyone was counting on this as

0:08:50.559 --> 0:08:53.079
<v Speaker 8>the place to put your money, take that yield and

0:08:53.880 --> 0:08:57.680
<v Speaker 8>presumably have a little bit of capital gains as well

0:08:57.679 --> 0:09:00.760
<v Speaker 8>from increases in prices, So that part of the investment

0:09:00.880 --> 0:09:04.000
<v Speaker 8>outlook has been rather scotched. Now we're starting to see

0:09:04.000 --> 0:09:07.720
<v Speaker 8>that push over into the equity side as well, So

0:09:08.000 --> 0:09:10.479
<v Speaker 8>I think that's really interesting that sort of shifting correlation

0:09:10.640 --> 0:09:14.640
<v Speaker 8>from people seeing the economy and the better economic news

0:09:14.720 --> 0:09:17.920
<v Speaker 8>is good for stocks. Last week, now everyone's worried again

0:09:17.960 --> 0:09:20.280
<v Speaker 8>the interest rate environment is just going to have to

0:09:20.320 --> 0:09:21.520
<v Speaker 8>become a lot more restrictive.

0:09:22.200 --> 0:09:24.160
<v Speaker 1>Yeah, that's the thing. So what is it done to

0:09:24.480 --> 0:09:27.760
<v Speaker 1>pricing around the Fed's path? Is it shades of twenty

0:09:27.840 --> 0:09:28.880
<v Speaker 1>twenty two all over again?

0:09:29.000 --> 0:09:31.520
<v Speaker 8>Yeah, it definitely. It definitely has that sort of feeling

0:09:31.559 --> 0:09:33.480
<v Speaker 8>the air, although I mean, you know, for all of that,

0:09:33.520 --> 0:09:36.840
<v Speaker 8>we're pricing in one more FED rate hike pretty soon

0:09:37.000 --> 0:09:38.720
<v Speaker 8>and then another one by the end of the year.

0:09:38.760 --> 0:09:41.040
<v Speaker 8>So it's not extreme. It's not like the market is

0:09:41.080 --> 0:09:44.400
<v Speaker 8>absolutely terrified now relative to the UK. Of course, where

0:09:44.440 --> 0:09:46.920
<v Speaker 8>are these expectations and what's baked in? Or a lot

0:09:47.000 --> 0:09:49.280
<v Speaker 8>higher again, and we're still looking for a much more

0:09:49.280 --> 0:09:54.240
<v Speaker 8>aggressive BOE taking interest rates here higher still, so you

0:09:54.320 --> 0:09:58.040
<v Speaker 8>could argue that their scope for FED pricing to continue

0:09:58.040 --> 0:10:01.360
<v Speaker 8>to seep into those erschel and yields in particular. I

0:10:01.360 --> 0:10:03.920
<v Speaker 8>think the other thing to consider when you're looking across

0:10:04.120 --> 0:10:07.280
<v Speaker 8>the yield curve is that the past few times when

0:10:07.280 --> 0:10:09.800
<v Speaker 8>we've got to around four percent on the tenure treasury,

0:10:09.840 --> 0:10:13.200
<v Speaker 8>that's brought in longer term investors, pension funds, that kind

0:10:13.240 --> 0:10:16.480
<v Speaker 8>of type of investor looking to lock in those long

0:10:16.559 --> 0:10:19.720
<v Speaker 8>term yields. They see that as an attractive play. And

0:10:19.800 --> 0:10:23.000
<v Speaker 8>so maybe, you know, even if we continue to feel

0:10:23.040 --> 0:10:24.920
<v Speaker 8>that pressure at the short ends of the yield curve,

0:10:25.440 --> 0:10:28.680
<v Speaker 8>there might be a little bit more support out there

0:10:29.080 --> 0:10:30.920
<v Speaker 8>for the back end.

0:10:31.800 --> 0:10:34.040
<v Speaker 2>What does all of this mean in terms of what

0:10:34.080 --> 0:10:35.839
<v Speaker 2>the Federal Reserve does next.

0:10:37.800 --> 0:10:39.760
<v Speaker 8>Well, we heard from some of the fair policies makers

0:10:40.320 --> 0:10:42.480
<v Speaker 8>this week talking about the need for more hikes. We

0:10:42.520 --> 0:10:46.320
<v Speaker 8>saw in the minutes there was certainly a feeling among

0:10:46.320 --> 0:10:51.680
<v Speaker 8>a good number of the officials that further hikes and needed.

0:10:51.880 --> 0:10:55.880
<v Speaker 8>I think the FED has been pretty explicit in the

0:10:55.960 --> 0:10:58.840
<v Speaker 8>need to get inflation under control and the willingness to

0:10:58.920 --> 0:11:01.920
<v Speaker 8>slow growth or ever and trigger you know, some sort

0:11:01.920 --> 0:11:03.920
<v Speaker 8>of a recession if that's what's needed in order to

0:11:03.960 --> 0:11:07.320
<v Speaker 8>win this battle, because it's so worried that those inflation

0:11:07.440 --> 0:11:10.360
<v Speaker 8>expectations become unanchored. So I don't think that they will

0:11:10.400 --> 0:11:12.520
<v Speaker 8>be worried about what the market is doing. So much

0:11:12.640 --> 0:11:15.000
<v Speaker 8>is worried about what inflation is doing and still paying

0:11:15.000 --> 0:11:17.760
<v Speaker 8>attention to try to get that under control.

0:11:18.800 --> 0:11:21.320
<v Speaker 1>Yeah, Paul, I think it's a bit of a crucial moment,

0:11:21.360 --> 0:11:24.000
<v Speaker 1>isn't it in markets today. We've thought we might be

0:11:24.120 --> 0:11:25.760
<v Speaker 1>sitting the start of summer, but.

0:11:25.720 --> 0:11:28.920
<v Speaker 8>Maybe that's Yeah, this is my this is my summer holiday, Caroline.

0:11:29.520 --> 0:11:34.800
<v Speaker 8>Good welcome and cold weather and.

0:11:33.559 --> 0:11:36.280
<v Speaker 1>And big moves in bond markets. Well, thank you so

0:11:36.360 --> 0:11:38.480
<v Speaker 1>much for popping into the studio. Lovely to see you

0:11:38.520 --> 0:11:42.800
<v Speaker 1>actually in person, say Paul Dobson, Bloomberg's executive editor for Asia. Markets.

0:11:43.000 --> 0:11:45.600
<v Speaker 2>Up next, more bad news on HS two casts and

0:11:45.679 --> 0:11:51.760
<v Speaker 2>London air pollution warning. Now the paper review on Bluebird

0:11:51.840 --> 0:11:52.760
<v Speaker 2>Daybreak Europe.

0:11:52.880 --> 0:11:55.679
<v Speaker 6>The news you need to know from today's papers.

0:11:55.800 --> 0:11:58.360
<v Speaker 1>Blue again and joins us this morning for more. The

0:11:58.360 --> 0:12:02.199
<v Speaker 1>Financial Times has the headline decision to delay HS two's

0:12:02.320 --> 0:12:06.280
<v Speaker 1>London terminus will cost at least two hundred million pounds.

0:12:06.800 --> 0:12:09.760
<v Speaker 1>The whole not far from where I live in Houston,

0:12:10.040 --> 0:12:13.640
<v Speaker 1>is going to remain then the construction.

0:12:13.559 --> 0:12:16.840
<v Speaker 9>Oh Caroline, Yes, by the looks of it for now,

0:12:16.880 --> 0:12:19.400
<v Speaker 9>but who knows what the future has to hold. But

0:12:19.520 --> 0:12:23.480
<v Speaker 9>the additional two hundred million pound figure has actually been

0:12:23.559 --> 0:12:26.920
<v Speaker 9>revealed in a report from a cross party group of

0:12:27.160 --> 0:12:30.600
<v Speaker 9>MPs that will be published today, and I must say something,

0:12:30.720 --> 0:12:35.280
<v Speaker 9>it's pretty scathing. They're warning the government's decision to delay

0:12:35.480 --> 0:12:39.080
<v Speaker 9>constructing HS two will cost this huge sum of money,

0:12:39.360 --> 0:12:43.000
<v Speaker 9>and they actually argue that from the very very beginning

0:12:43.400 --> 0:12:47.559
<v Speaker 9>the budget was completely unrealistic and one of the biggest

0:12:47.559 --> 0:12:51.120
<v Speaker 9>headaches has been the tunnel close to Caroline has been

0:12:51.360 --> 0:12:56.320
<v Speaker 9>the rebuilding of Houston Station actually to accommodate huge high

0:12:57.000 --> 0:12:59.480
<v Speaker 9>speed trains are going to be coming in and out.

0:13:00.080 --> 0:13:03.280
<v Speaker 9>The project was designed to carry passengers from London to

0:13:03.360 --> 0:13:08.000
<v Speaker 9>Birmingham and the North of England. It suffered these bad delays,

0:13:08.559 --> 0:13:13.839
<v Speaker 9>large costs, overturns, and this particular you know, design projects

0:13:13.960 --> 0:13:17.920
<v Speaker 9>in the station close to your house could exceed seventy

0:13:18.080 --> 0:13:23.599
<v Speaker 9>billion pounds. That's up from thirty seven billion in twenty thirteen.

0:13:24.040 --> 0:13:26.760
<v Speaker 9>And earlier this year the government did announce plans to

0:13:26.920 --> 0:13:31.000
<v Speaker 9>halt work on Euston Station and the final streatch of

0:13:31.120 --> 0:13:35.720
<v Speaker 9>the track to control these ballooning costs which include that tunnel.

0:13:35.880 --> 0:13:38.480
<v Speaker 9>And the report from the House of Commons Public Accounts

0:13:38.480 --> 0:13:42.959
<v Speaker 9>Committee out today, as I said, very critical of the government.

0:13:43.000 --> 0:13:46.120
<v Speaker 9>But Caroline and Stephen, this was a huge plan to

0:13:46.280 --> 0:13:50.440
<v Speaker 9>link London to northern England. Great in the concept of things,

0:13:50.559 --> 0:13:53.880
<v Speaker 9>but has been more difficult to achieve than first thought.

0:13:54.200 --> 0:13:57.280
<v Speaker 2>Yeah, certainly, and that bill going even higher it seems

0:13:57.320 --> 0:13:59.040
<v Speaker 2>for the project as well. Lee, And let's go to

0:13:59.080 --> 0:14:01.960
<v Speaker 2>the Times next headline. There thousands of European flights maybe

0:14:01.960 --> 0:14:04.640
<v Speaker 2>delayed or canceled as air traffic controller threatened strikes.

0:14:04.840 --> 0:14:07.319
<v Speaker 9>I feel so bad reporting this because we've all been

0:14:07.360 --> 0:14:11.160
<v Speaker 9>so excited for our summer holidays. I must say I

0:14:11.360 --> 0:14:14.440
<v Speaker 9>was delayed on my summer holiday, but I got over

0:14:14.520 --> 0:14:16.880
<v Speaker 9>it and got there in the end. But many more

0:14:16.920 --> 0:14:19.080
<v Speaker 9>people could be so. Up to a third of all

0:14:19.120 --> 0:14:22.000
<v Speaker 9>European flights are now at risk of being delayed or

0:14:22.080 --> 0:14:26.760
<v Speaker 9>canceled this summer after air traffic controllers said they would strike.

0:14:27.200 --> 0:14:31.600
<v Speaker 9>Now this is according to The Times newspaper. Controllers at

0:14:31.640 --> 0:14:35.560
<v Speaker 9>euro Control that's a European air traffic management body, have

0:14:35.640 --> 0:14:38.240
<v Speaker 9>said they would walk out over the peak of summer

0:14:38.280 --> 0:14:43.960
<v Speaker 9>after talksovers staffing, rosters and pay has just broken down.

0:14:44.360 --> 0:14:48.200
<v Speaker 9>So British holidays now face holiday makers now face this

0:14:48.400 --> 0:14:51.440
<v Speaker 9>agonizing weight because we're going to find out in the

0:14:51.480 --> 0:14:55.560
<v Speaker 9>next couple of days when the walkouts will be. So

0:14:55.760 --> 0:14:59.360
<v Speaker 9>it's pretty you know, touching times if you've booked a flight.

0:14:59.440 --> 0:15:03.800
<v Speaker 9>Also here in London are mt Union. They've announced more

0:15:04.120 --> 0:15:07.720
<v Speaker 9>strikes on the London underground for July the twenty third

0:15:07.960 --> 0:15:11.440
<v Speaker 9>to twenty eighth than Caroline. If you're a mother and

0:15:11.480 --> 0:15:15.120
<v Speaker 9>you have children or a father parents, know that some

0:15:15.280 --> 0:15:18.480
<v Speaker 9>teachers are going on strike in England today too. So

0:15:18.720 --> 0:15:19.520
<v Speaker 9>lot's happening.

0:15:19.800 --> 0:15:22.600
<v Speaker 1>Yeah, absolutely, two days of stri co action in the

0:15:22.720 --> 0:15:25.720
<v Speaker 1>UK in terms of schools this week alone. The Guardian

0:15:25.880 --> 0:15:30.200
<v Speaker 1>air pollution could kill London as a sporting capital. Sebastian

0:15:30.240 --> 0:15:34.560
<v Speaker 1>co Worn's subco big voice in terms of world athletics

0:15:34.560 --> 0:15:35.720
<v Speaker 1>and sports in general.

0:15:36.280 --> 0:15:37.120
<v Speaker 2>Yeah, huge voice.

0:15:37.160 --> 0:15:41.040
<v Speaker 9>Remember He was very, very instrumental in the Olympics that

0:15:41.080 --> 0:15:43.600
<v Speaker 9>we held here in London in twenty twelve. But now

0:15:43.640 --> 0:15:47.520
<v Speaker 9>the World Athletics president is warning that the climate crisis

0:15:47.560 --> 0:15:51.000
<v Speaker 9>and poor air quality may just cause havoc to the

0:15:51.080 --> 0:15:54.840
<v Speaker 9>sporting calendar. Yesterday he was speaking to Gary Lineker in

0:15:54.880 --> 0:15:59.240
<v Speaker 9>a panel at Wimbledon, and he basically says that even

0:15:59.480 --> 0:16:03.280
<v Speaker 9>London could be a very difficult place to hold these

0:16:03.320 --> 0:16:07.600
<v Speaker 9>sporting events because of air pollution and the effect that

0:16:07.600 --> 0:16:10.280
<v Speaker 9>that could have on athletes in the future.

0:16:11.880 --> 0:16:14.600
<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

0:16:14.680 --> 0:16:17.720
<v Speaker 2>stories making news from London to Wall Street and beyond.

0:16:18.000 --> 0:16:21.960
<v Speaker 1>Look for us on your podcast feed every morning, on Apple, Spotify,

0:16:22.080 --> 0:16:24.000
<v Speaker 1>and anywhere else you get your podcasts.

0:16:24.080 --> 0:16:27.080
<v Speaker 2>You can also listen live each morning on London Dab Radio,

0:16:27.120 --> 0:16:29.840
<v Speaker 2>the Bloomberg Business app, and Bloomberg dot Com.

0:16:29.880 --> 0:16:32.640
<v Speaker 1>Our flagship New York station, is also available on your

0:16:32.680 --> 0:16:37.400
<v Speaker 1>Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

0:16:37.640 --> 0:16:38.920
<v Speaker 6>I'm Caroline Hepka and.

0:16:38.880 --> 0:16:41.520
<v Speaker 2>I'm Stephen Carroll. Join us again tomorrow morning for all

0:16:41.560 --> 0:16:43.960
<v Speaker 2>the news you need to start your day right here

0:16:44.000 --> 0:16:45.040
<v Speaker 2>on Bloomberg day Break.

0:16:45.040 --> 0:16:49.560
<v Speaker 8>Europe,