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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak You Up podcast, available every

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Speaker 2: morning on Apple, Spotify or wherever you listen. It's Thursday,

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Speaker 2: the sixteenth of January in London. I'm Caroline Hepkit.

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Speaker 3: And I'm Stephen Carroll. Coming up today. Israel and Hamas

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Speaker 3: agree to a six week ceasefire, pausing a war that

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Speaker 3: has devastated Gaza.

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Speaker 2: Slower US inflation, sparks and everything rally across markets has

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Speaker 2: traded as boost expectations of interest rate cuts from the

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Speaker 2: Federal Reserve.

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Speaker 3: Plus an extreme wealth warning. President Joe Biden calls on

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Speaker 3: Americans to be wary of the mega rich in his

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Speaker 3: farewell address.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 3: Israel and Hamas have agreed to a ceasefire, pausing their

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Speaker 3: fifteen month war and releasing dozens of hostages. It's hope

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Speaker 3: the six week culton fighting will lead to a permanent

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Speaker 3: end to the conflict, which has almost totally destroyed the

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Speaker 3: Gaza strip. US President Joe Biden hailed the deal, but long.

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Speaker 4: Last I can announce a ceasefire. No hostage deal has

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Speaker 4: been reached between Israel and a mass fighting in Gaza

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Speaker 4: will stop and soon the hastily return home and their families.

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Speaker 3: Both Biden and President elect Donald Trump claimed credit for

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Speaker 3: the agreement, which will see thirty three hostages captured by

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Speaker 3: Hamas released. Israel will withdraw from populated areas of the

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Speaker 3: Gaza Strip and release hundreds of Palestinian prisoners. After the

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Speaker 3: deal was announced, Israel's Prime Minister Benjaminett and Yahuo's office

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Speaker 3: said several details still needed to be worked out.

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Speaker 2: US Corp inflation slowed marginally, triggering one of the largest

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Speaker 2: relief rallies in years. Prices excluding food and energy costs

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Speaker 2: rose by zero point two percent last month. That was

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Speaker 2: less than ALYS had estimated. Austin Goolsby is one of

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Speaker 2: a trio of FED policymakers saying that the latest data

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Speaker 2: means a soft landing is in sight.

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Speaker 5: The trend continues to be improvement in inflation.

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Speaker 2: I'm still optimistic.

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Speaker 6: For twenty twenty five that we can continue growing and

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Speaker 6: have a soft.

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Speaker 2: Landing, Chicago Fed President Austin Gilsby. There the optimism around

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Speaker 2: falling prices saw the S and P five hundred close

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Speaker 2: two percent high, its biggest gain since the US election. Result,

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Speaker 2: and it pushed ten year US treasury yields down nearly

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Speaker 2: fifteen basis points.

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Speaker 3: In the UK, Rachel Reeves has emerged relatively unscathed from

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Speaker 3: a series of high stakes public tests this week. The

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Speaker 3: Chancellor's next challenge will be proving to investors that she

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Speaker 3: can shore up her battered economic agenda. Bloomberg's Tima Adebayo

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Speaker 3: has more.

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Speaker 7: The Chancellor is welcomed back from an official trip to

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Speaker 7: China on Monday by soaring bond yields and a barrage

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Speaker 7: of political criticism. Since then, continued demand for UK debt

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Speaker 7: and lower than expected inflation reading have relieved the pressure somewhat,

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Speaker 7: but Reeves still faces pressure to deliver on her plans

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Speaker 7: for faster growth. Whilst yields remain high enough as of

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Speaker 7: yesterday afternoon to keep the Treasury at risk of breaking

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Speaker 7: its fiscal rules, she remains at the mercy of global

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Speaker 7: bond markets between now and March twenty six, when the

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Speaker 7: Office for Budget Responsibility publishes an outlook that will determine

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Speaker 7: whether the government must impose even higher taxes or restrict

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Speaker 7: spending in London. To you at a bio Bloomberg.

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Speaker 2: Radio, President Biden is warning that America is in danger

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Speaker 2: of becoming a society ruled by the extremely wealthy. In

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Speaker 2: his farewell address, the outgoing president says, the ultra rich

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Speaker 2: are threatening democracy.

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Speaker 4: I want to warran a country. Some things that give

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Speaker 4: me great concern, and that's the dangerous conversation of power

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Speaker 4: in the hands of very few ultrawealthy people, the dangerous

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Speaker 4: consequences if their abuse of power is left unchecked. Today,

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Speaker 4: an oligarch is taking shape in America of extreme wealth,

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Speaker 4: power and influence literally threatens our entire democracy. Are basic

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Speaker 4: great with freedoms.

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Speaker 2: Biden's message mark the end of his fifty years in politics,

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Speaker 2: as his tenure as forty six president ends, having lost

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Speaker 2: control of the presidency and both chambers of Congress. Incoming

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Speaker 2: President Donald Trump has tapped some of America's richest men

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Speaker 2: for top roles in his administration, including Elon Musk.

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Speaker 3: Scott Besant is expected to tell a Senate committee that

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Speaker 3: maintaining the dollars, the world's reserve currency, is critical to

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Speaker 3: the US economy, according to prepared remarks, speaking during his

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Speaker 3: confirmation hearing, Donald Trump's nominee for Treasury Secretary, will also

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Speaker 3: say the country must deploy sanctions as part of a

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Speaker 3: whole government approach for the sake of national security. The

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Speaker 3: remarks will be Bessant's first public comments since he was

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Speaker 3: nominated in November. He's likely to be a multi hour

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Speaker 3: event that sets the tone for Besant's priorities and principles

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Speaker 3: once in office. Beginning at ten thirty am in Washington.

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Speaker 3: With Republicans in control of the Senate, it's expected he

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Speaker 3: will be easily confirmed in the role now.

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Speaker 2: Dangerous winds stoking fars in Los Angeles are forecast to

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Speaker 2: end today, according to the National Weather Service, but a

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Speaker 2: lack of raid and another round of weather warnings for

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Speaker 2: next week means that officials are still worried. Deadly blazes

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Speaker 2: in the region have killed at least twenty five people

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Speaker 2: and destroyed thousands of structures. The city's mayor, Karen Bass,

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Speaker 2: says the situation is still developing.

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Speaker 8: We're not out of the woods yet. There is a

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Speaker 8: chance that the Santa Annas might spike up again next week.

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Speaker 8: While we're still being vigilant. While we're still in this emergency,

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Speaker 8: we also have to begin the process of recovery and rebuilding.

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Speaker 2: Los Angeles Mayor Karen Bass speaking there, the recent files

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Speaker 2: are expected to rank amongst the costliest in modern US history.

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Speaker 2: Wells Fargo and Goldman Sachs estimate ensured losses could reach

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Speaker 2: as much as thirty billion dollars.

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Speaker 3: Those are your top stories on the markets. The soft

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Speaker 3: USCPI print yesterday ignited a risk one rally. Wall Street

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Speaker 3: had its best CPI day since twenty twenty three. The

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Speaker 3: S and P five hundred finished up by one point

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Speaker 3: eight percent. The Tenure treasury'ld sank fourteen basis point yesterday

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Speaker 3: and is holding today at four point sixty six percent.

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Speaker 3: Commodities ROAR WTI rose by three point three percent. It's

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Speaker 3: over eighty dollars a barrel today. Guilt were rallying as well,

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Speaker 3: Spurred further by the US data. The ten year guilt

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Speaker 3: Shields finished sixteen basis points lower yesterday, erasing a substantial

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Speaker 3: portion of their year to date rise to In Asia today,

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Speaker 3: the rally continuing. Inequities, the Mscish Pacific Index is eight

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Speaker 3: tenths higher. The Japanese yen has been strengthening as well

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Speaker 3: on the back of the reports. The BOJS he's a

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Speaker 3: good chance of a January hike. It's currently training at

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Speaker 3: one fifty six against the dollar.

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Speaker 1: So those the markets.

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Speaker 2: In a moment, we're going to bring you more on

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Speaker 2: the CISPA agreement in the Middle East and talk about

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Speaker 2: that everything rally. But another story is caught my eye

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Speaker 2: this morning, which is about Hindenburg Research. It's being disbanded.

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Speaker 2: Nate Anderson, the short seller who made his name with

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Speaker 2: some huge campaigns that targeted billionaires around the world, including Gautamdanni,

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Speaker 2: Jack Dorsey, Carl I Can says Hindenburg is just a

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Speaker 2: chapter in his life, no particular threat, no health issue,

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Speaker 2: no big personal issue, but his very small team that

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Speaker 2: got huge yeah, is being disbanded activist short sell. I

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Speaker 2: mean all of those three financies I mentioned, of course

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Speaker 2: have pushed back and their businesses have too, disputing Hindenburg's research.

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Speaker 2: But obviously Hindenburg got a lot, a lot of attention

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Speaker 2: around the world, so very interesting that they're.

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Speaker 3: Going, yeah, and we did see I mean, massive moves

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Speaker 3: on markets. A lot of them reversed quite quickly afterwards.

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Speaker 3: But of course this had been a really a work

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Speaker 3: that propelled Nate Anderson into the stratosphere for markets as well.

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Speaker 3: And he does point in his goodbye letter as well

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Speaker 3: one hundred individuals have been charged civilly or criminally by regulators,

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Speaker 3: at least in part through the work that they published

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Speaker 3: as well. But yeah, he's moving on to something else.

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Speaker 2: Yeah, absolutely, it's one of the stories I read this morning.

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Speaker 2: So that's one sort of interest in financial market. Let's

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Speaker 2: think about what is happening though in the Middle East.

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Speaker 2: The Ceasefar agreement, which includes a six week pause in

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Speaker 2: the war in Gaza, also the release of hostages held

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Speaker 2: by Hamas as well as Palestinian prisoners held in Israel.

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Speaker 2: Donnah Crach, who leads our breaking news team in the

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Speaker 2: Middle East, joins us now for more.

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Speaker 1: Donah, good morning.

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Speaker 2: What brought the two sides to this agreement in the

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Speaker 2: end after so much negotiation?

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Speaker 6: Good morning. I think there were many factors that came

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Speaker 6: into play here. Israel has made some military victories, especially

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Speaker 6: in Lebanon, weakening, has a lug killing its leaders in Gaza,

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Speaker 6: killing your hsin war and in Iran assassinating another Hamas

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Speaker 6: leader then there and destroying Run's defense capabilities. So this

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Speaker 6: kind of like support system for Hamas has definitely been destroyed.

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Speaker 6: And of course the election of Donald Trump, who is

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Speaker 6: a staunch supporter of Israel. There was a report last

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Speaker 6: year when Trump asked Natanyahu to end the war before

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Speaker 6: he comes into office. And of course that tweet that

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Speaker 6: was directed at Hamas from President Trump when he said,

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Speaker 6: you know, get to a deal or all hell will

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Speaker 6: break loose. I mean that must have gone to Hamas's

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Speaker 6: head as well. Understanding that Trump is that staunch supporter

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Speaker 6: of Israel, and he can and would give the green

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Speaker 6: light to Israel in ways that are different from from

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Speaker 6: Biden and without any condition. So I think that and

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Speaker 6: of course we have President Biden who wanted that ceasefire

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Speaker 6: and his team has been working on it for the

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Speaker 6: past fifteen months, but to no avail. And now this

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Speaker 6: is going forward. So you see everyone taking credit for

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Speaker 6: that Ka announcing the ceasefire agreement. You saw President Biden,

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Speaker 6: also Trump and so but in reality there were many

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Speaker 6: factors of play and the you know, everything that happened

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Speaker 6: in the past six months I think brought this deal

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Speaker 6: to an agreement for use.

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Speaker 3: There have been some notes of caution though from Israel's

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Speaker 3: Prime minister. He says there are still details to be

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Speaker 3: worked out. What is benjaminasanaw who talking about so the.

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Speaker 6: Security Cabinet still needs to meet today and approve the deal.

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Speaker 6: And I mean, let's face it, this isn't the most

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Speaker 6: popular deal in Israel, though perhaps you know in Israel

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Speaker 6: people are exhausted after fifteen months of war. But you

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Speaker 6: also find members of Nataniahu's coalition who came out yesterday

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Speaker 6: against that deal and asking each other to oppose it.

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Speaker 6: Let's look at Natania's comments from the past year and

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Speaker 6: a half and is that they won't stop until total

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Speaker 6: victory is achieved, though we never understood what that meant

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Speaker 6: or what exactly is the victory there, and doesn't look

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Speaker 6: like that's been achieved. It is definitely more complicated than that,

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Speaker 6: and Natanianho's political landscape in Israel is definitely more complicated.

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Speaker 6: And we saw Israel's president last night asking the security

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Speaker 6: members to approve this deal and to get it done.

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Speaker 6: And so again, like before, let's look at how he

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Speaker 6: proposed the Lebanon ceasefire. He also had to come up, Nataniaho,

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Speaker 6: that is, come on on a live speech and justify

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Speaker 6: why he thought this was the ceasefire should go ahead

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Speaker 6: with hasba Allah, given that Hasballah has been tremendously weakened,

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Speaker 6: So probably Natania, who needs some time and to say

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Speaker 6: to the security cabinet, like, look, everyone's praising this deal.

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Speaker 6: It's a good deal, and it's only the first phase

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Speaker 6: of a permanent cease fire.

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Speaker 1: If that is yeah, well that that is the question.

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Speaker 2: Whether it does lead to a more permanent end to

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Speaker 2: the to the hostilities.

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Speaker 1: What happens in Gaza now.

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Speaker 6: I think in Gaza's specifically, Like it's hard to say

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Speaker 6: at the moment, right if there will be a permanent

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Speaker 6: a permanent sea spire, I don't want to say unlikely,

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Speaker 6: But the second phase will probably also be difficult to negotiate.

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Speaker 6: I mean, it did take them fifteen months to come

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Speaker 6: to an agreement on six weeks. But of course the

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Speaker 6: deal allows for the entry of desperately needed aid to

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Speaker 6: Palestinians in Gaza, which has seen unprecedented destruction. Right, it's

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Speaker 6: all been but destroyed. People are going to return to nothing,

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Speaker 6: and some are probably still looking for their missing relatives,

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Speaker 6: you know, under the rubble. It's a very sad situation,

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Speaker 6: and we still need to see those massive reconstruction efforts.

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Speaker 1: Pledges.

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Speaker 6: Who's going to donate, and most importantly for the donors,

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Speaker 6: is going to be who's to whom they're going to

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Speaker 6: donate to the question of who's going to govern Gaza

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Speaker 6: later on whether Mahamud Abbas or you know, a mass

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Speaker 6: will be allowed to do that or adjoint effort, and

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Speaker 6: that's another sticking point. So for the Gazas, it's still

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Speaker 6: not really a ceasefier. I would say they still have

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Speaker 6: a lot of kind of like a blique picture to

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Speaker 6: look out for the future.

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Speaker 3: Okay, Donna christ leading our team of Middle East breaking

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Speaker 3: news reporters, Thank you very much.

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Speaker 2: Now let's reflect on what's been happening in markets. The

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Speaker 2: US inflation data was published yesterday. It started something of

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Speaker 2: an everything rally on the markets. The soft and then

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Speaker 2: expected call reading reinvigorated bets at the Fed will slash

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Speaker 2: interest rates sooner than thought. Let's get our markets live

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Speaker 2: stratches Mary Nicola to take us through the data then

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Speaker 2: that we saw yesterday gave the market such a boost.

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Speaker 5: Mary, Yeah, it's really clear from the reaction of the

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Speaker 5: market that just how one sided positioning had become. So

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Speaker 5: traders were looking for a higher than expected number, especially

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Speaker 5: after we saw ic ism prices paid and there were

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Speaker 5: thoughts that there's a lot of terror front loading, and

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Speaker 5: so a softer one seemed to have blindsided a lot

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Speaker 5: of traders. So while the decline is core inflation is encouraging,

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Speaker 5: it's it's important to keep in mind that it's still

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Speaker 5: above the fed's two percent target. And then if we

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Speaker 5: look at the six month annualized changed in core CPI,

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Speaker 5: that actually jumped to three point two percent after falling

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Speaker 5: below three percent for five months.

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Speaker 1: And the reason why I highlight this.

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Speaker 5: Particular number is it's the preferred measure that the likes

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Speaker 5: of FED Governor Christopher Waller prefers. So that number is

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Speaker 5: actually not very encouraging. So I would say it's way

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Speaker 5: too early to declare victory that inflationary concerns are over,

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Speaker 5: but it does the reaction does show you just how

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Speaker 5: one sided the market was.

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Speaker 3: So what are the market expectations for the FED now

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Speaker 3: after this print?

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Speaker 5: So traders were pricing in a very conservative path for

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Speaker 5: the FED, so only roughly one cut, while the FED

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Speaker 5: dot plots had penciled in two cuts over the next

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Speaker 5: for this year. But after these numbers were now between

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Speaker 5: one to two by the end of the year. But

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Speaker 5: I would warn that this is likely to sway dramatically

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Speaker 5: over the course of the year, especially with the slew

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Speaker 5: of uncertainties around trade, fiscal policy, and then of course

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Speaker 5: inflation and jobs.

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Speaker 2: Meanwhile, of course there's the jobs report happening on Friday.

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Speaker 2: Briefly there on the yen rallying also on the back

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Speaker 2: of a report about the Bank of Japan seeing a

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Speaker 2: possible chance of a rate height this month.

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Speaker 5: Yeah, that the latest headline that scotten market's really excited

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Speaker 5: was the one suggesting that there was a good chance

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Speaker 5: of a hike barring any surprises from Trump. So the

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Speaker 5: OIS market is now pricing in about an eighty percent

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Speaker 5: chance of a hike. Just last week it was less

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Speaker 5: than a fifty percent chance. And this headline is probably

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Speaker 5: the clearest signal and the most explicit signal that we've

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Speaker 5: gotten from the BOJ, putting January as a very much

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Speaker 5: as a very live meeting, and that should help the end.

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Speaker 5: But the currency was already receiving a boosts mentioned from

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Speaker 5: that everything rally that we saw, but now other cats

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Speaker 5: out of the bag for a rate hike, and the

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Speaker 5: BOJ will need to deliver to sustain that rally for

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Speaker 5: the end.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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