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

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Speaker 2: This is the Bloomberg Daybreak Europe podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Tuesday, the

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Speaker 2: second of April in London. I'm Stephen Carroll. Coming up today,

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Speaker 2: Israel strikes Iran's embassy compound in Syria, as regional tensions

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Speaker 2: in the Middle East escalate. Market's cool on the prospect

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Speaker 2: of a June ratecut by the Federal Reserve, as the

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Speaker 2: US economy refuses to slow down. Plus, we'll tell you

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Speaker 2: why Donald Trump's net worth dropped by a billion dollars

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Speaker 2: in just one day. Let's start with a roundup of

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Speaker 2: our top stories.

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Speaker 1: The man dubbed Britain's bond market Whisperer says that politicians

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Speaker 1: need to pay more attention to how debt is raised.

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Speaker 1: Robert Staman has borrowed more than three trillion pounds for

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Speaker 1: the UK government during his twenty one years running the

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Speaker 1: Debt Management Office. He told Bloomberg in a telephone interview

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Speaker 1: that ensuring liquidity and stability will be key for his

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Speaker 1: successor an efficient.

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Speaker 3: Well functioning call.

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Speaker 4: Liquid market is actually in a strange way, it's a

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Speaker 4: very human thing.

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Speaker 3: It's a very democratic thing.

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Speaker 4: The cliches that people work in markets and are driven

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Speaker 4: by greed and fear.

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Speaker 3: That's the cliche. There's an element of truth to it.

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Speaker 4: Another way of looking at it is that the market

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Speaker 4: is composed of a myriad of different participants, buyers and sellers,

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Speaker 4: and people who contribute towards a view that establishes an

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Speaker 4: equilibrium and a price.

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Speaker 1: Robert Staman, who was at the head of the Debt

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Speaker 1: Management Office during the Liz Trust era, He added that

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Speaker 1: the Bank of England deserved more credit for how it

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Speaker 1: handled that crisis in the guilt market. He also warns

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Speaker 1: that Britain faces a tougher world are washed with debt

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Speaker 1: as governments compete to attract bond buyers.

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Speaker 2: Ben Bernanki is pushing the Bank of England towards a

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Speaker 2: new model of inflation scenario forecasts. The former FED chair

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Speaker 2: is said to publish a wide ranging review into how

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Speaker 2: the UK Center Bank communicates later this week. James Wilcock

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Speaker 2: has more back.

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Speaker 5: In November twenty twenty two, the Bank of England warned

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Speaker 5: of a coming calamity, the longest recession since the nineteen thirties.

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Speaker 5: One year later, the governor was singing a different tune.

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Speaker 6: We go back to last autumn. Last November, when we

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Speaker 6: did a forecast, we were predicting quite a long but

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Speaker 6: quite shallow recession, and the economy, as I said earlier,

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Speaker 6: has turned out to be much more resilient for so far.

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Speaker 5: Defenders say the Bowie has an impossible job trying to

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Speaker 5: communicate both to financial markets and the general public at

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Speaker 5: the same time, but some politicians and skeptical traders say

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Speaker 5: reform is needed. On Friday, we'll hear what former FED

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Speaker 5: chair Ben Bernanke has to say, but he speaks at

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Speaker 5: a politically sensitive time ahead of an election, and so

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Speaker 5: Bananke's like to lay out a range of options and

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Speaker 5: leave it to the NPC to shoot how to proceed.

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Speaker 5: In London. James Wilcock Limberg Radio.

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Speaker 1: Now the EU's main banking lobby, says that European lenders

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Speaker 1: won't be able to compete with their US rivals if

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Speaker 1: ESG rules keep piling up. The warning from the European

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Speaker 1: Banking Federation is the latest sign of the divergence in

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Speaker 1: regulation between Europe and the US. EU banks now face

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Speaker 1: more environmental, social and governance disclosure rules, adjusted capital requirements

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Speaker 1: and the possibility of an explicit climate buffer. The European

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Speaker 1: Central Bank says that these will safeguard the sector against

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Speaker 1: emerging climate risks, while in the US, planned rules and

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Speaker 1: guidelines are being walked back against a backdrop of Republican

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Speaker 1: led opposition.

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Speaker 2: The US Trisury Secretary Janet Yellen will wrap up afore

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Speaker 2: day visit to China today after a series of meeting

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Speaker 2: with meetings with senior Chinese officials, including the Vice Premier

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Speaker 2: and the governor of the Central Bank. While the meetings

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Speaker 2: are aimed at and saying ties between the world's two

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Speaker 2: biggest economies, Yellen has also used the trip to criticize

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Speaker 2: Beijing's trade policies. Bloomberg'schris Condon is traveling with Yellen during

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Speaker 2: the trip. He says it's yet to be seen if

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Speaker 2: any of the criticism has any impact.

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Speaker 7: The question really that still hangs over this is her

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Speaker 7: push going to move the needle in Beijing in terms

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Speaker 7: of how they allocate capital in their economy. The US

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Speaker 7: says they're putting way too much into supply that's going

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Speaker 7: to end up in distorting global markets rather than into demand.

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Speaker 8: Are the Chinese going to consider this and change. I

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Speaker 8: would say that's certainly unlikely in the short term, and

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Speaker 8: we won't know for a while whether they might make

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Speaker 8: an adjustment or they're just nodding politely and kind of

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Speaker 8: waiting to see what happens in the next US election.

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Speaker 9: Quite frankly.

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Speaker 2: Chris Condon's analysis comes as Johnny Allen sits down with

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Speaker 2: the head of the PBOC today before wrapping up her

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Speaker 2: visit with a press conference.

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Speaker 1: The Phone Secretary, David Cameron is warning that the UK

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Speaker 1: support for Israel is not unconditional. After an Israeli military

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Speaker 1: strike killed three British aid workers, the government is under

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Speaker 1: pressure to stop arms exports to the country. The Deputy

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Speaker 1: Prime Minister Oliver Dowden says that Minister's positions on the

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Speaker 1: matter are unchanged.

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Speaker 10: But based on legal advice that the Foreign sector receives.

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Speaker 10: Foreign Secretary receives periodic legal vessor can assure you, as

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Speaker 10: a minister, I'm constantly receiving legal advice across arrange of issues.

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Speaker 10: But what has not changed so is the fact that

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Speaker 10: he has not changed his advice to the Business Secretary

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Speaker 10: in respect of others.

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Speaker 1: So Oliver Dowden, speaking over the weekend, there. The UK

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Speaker 1: is sending a Royal Navy ship to increase humanitarian support

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Speaker 1: to galza I. Meanwhile, Israel is pulling some troops out

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Speaker 1: of the southern Girlsen city of hahn Junis, saying that

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Speaker 1: it's ended its mission there. Prime Minister Benjamin Netnia, who

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Speaker 1: says that his forces are quote one step away from

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Speaker 1: victory against Tamas.

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Speaker 2: The odds of Brent crude oil exceeding one hundred dollars

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Speaker 2: a barrel are rising amidst global supply shocks, military tensions

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Speaker 2: between Israel and Duran where the immediate trigger for oil's

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Speaker 2: jump above ninety dollars a barrow last week. But the

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Speaker 2: rally's foundations run deeper from Mexico's recent reduction of crude exports,

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Speaker 2: to US sanctions against Russia, and too they rebel attacks

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Speaker 2: in the Red Sea. Bloomberg's Garfield Reynalds says regional conflicts

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Speaker 2: are only part of the picture.

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Speaker 11: The latest jumping crude oil has not owed all that

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Speaker 11: much to geopolitical tensions, some but not a lot. The

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Speaker 11: other thing that's happened is supply picture has become much

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Speaker 11: more cloudy. We've got Mexico signing it doesn't want to

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Speaker 11: export oil. That means US refined as are having to

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Speaker 11: use more US oil. That has an obvious immediate read

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Speaker 11: through both the WTI and then also even to brand

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Speaker 11: and amidst all that opek plus is seeking to curb production.

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Speaker 2: It'spenbook Chief Rights correspondent Garfield annals the oil supply squeeze

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Speaker 2: is kicking in just as demand around the world is

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Speaker 2: ramping up due to manufacturing activity and summer consumption peaks.

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Speaker 1: And those are your top stories on the markets this morning.

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Speaker 1: YOURSOXX fifty futures are currently up by a tenth of

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Speaker 1: one percent. The MSCI Asia Pacific index is also gaining

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Speaker 1: half of one percent. Teny US Treasury yields up three

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Speaker 1: basis points of four point four to three percent.

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Speaker 2: Now, in a moment, we'll bring you more on the

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Speaker 2: man described as the most important person the average person

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Speaker 2: on the street has never heard of. Plus we'll get

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Speaker 2: more on the US Treasury secretaries tripped to China as well.

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Speaker 2: But other stories that caught our eye this morning a

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Speaker 2: couple of interesting ones from the UK as well. We

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Speaker 2: have the Resolution Foundation warning about another double digit increase

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Speaker 2: in rent on the way squeezing. Of course, people particularly

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Speaker 2: those who are perhaps a little bit earlier in their career.

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Speaker 2: And if you're a graduate, the jobs market's getting even tougher.

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Speaker 2: Data of mad Zuna showing that the number of vacancies

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Speaker 2: for graduates fell thirty percent from a year ago in February.

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Speaker 1: Yeah, it's really really tough. But apparently the squeeze in

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Speaker 1: terms of the labor market in the UK is particularly

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Speaker 1: acute for newer graduates. For young people, an alarming trend

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Speaker 1: in terms of the deterioration in a number of jobs

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Speaker 1: that are available for them at the start of their career.

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Speaker 1: Apparently this is about the kind of the labor market,

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Speaker 1: the loosening of the labor market, and that it's young people.

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Speaker 1: The issue though is and the question mark is around

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Speaker 1: where the businesses are therefore actually investing enough into you know,

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Speaker 1: future talent. So that's the big worry.

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Speaker 2: Yeahy, look, and you wonder as well how this is

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Speaker 2: going to play out in a general election campaign as well.

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Speaker 2: If young people are seeing rents going up, finding it

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Speaker 2: harder to get a job, that might make them, you know,

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Speaker 2: think very careful about who they're going to vote for too.

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Speaker 1: Yes, absolutely, our politics in the UK certainly seems to

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Speaker 1: be becoming more generationally divided. That's one story though that

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Speaker 1: you can read on the Bloomberg Terminal this morning. All

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Speaker 1: around Working in Britain by Isabella Ward on the terminal today.

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Speaker 2: We want to talk next though, about the person has

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Speaker 2: been key to the functioning of the UK's government for

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Speaker 2: the past twenty one years. Robert Staeman is stepping down

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Speaker 2: after more than two decades leading Britain's debt Debt Management Office.

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Speaker 2: In that time, he's overseen the biggest explosion of public

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Speaker 2: sector borrowing in a generation, having raised at least three

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Speaker 2: trillion pounds in debt. Now he's been speaking about his

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Speaker 2: career Bloomberg's FX and Rates reporter Alice Leadhill, and Alice

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Speaker 2: is with us now morning to you talk to us

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Speaker 2: first of all about what the Debt Management Office actually

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Speaker 2: does and why stam as departure is so significant.

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Speaker 12: Sure, so, the DEMO is in charge of debt sales,

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Speaker 12: so they raise money on behalf of the government by

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Speaker 12: selling billions of pounds of bonds to investors every year. Now,

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Speaker 12: Robert Steeman's been in charge there for more than two

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Speaker 12: decades and he's finally leaving this summer. You know, I

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Speaker 12: think that's significant because it's actually this incredibly important job.

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Speaker 12: So as you say, you know, most people in the

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Speaker 12: country probably have never heard of him, but you know,

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Speaker 12: the DMO raises the money that keeps the country running.

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Speaker 12: And secondly, you know, during those two decades he's acquired

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Speaker 12: this huge amount of experience and wisdom. I think you

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Speaker 12: can probably argue that the job is now more important

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Speaker 12: than ever when you consider just how much debt that governments,

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Speaker 12: not just the UK, the governments around the world are

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Speaker 12: issuing now.

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Speaker 1: Yeah, absolutely, I mean he's overseen this huge increase in

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Speaker 1: the UK's boring. Let's listen though, to a little bit

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Speaker 1: of the conversation that you've had with him. It was

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Speaker 1: over the phone, but about the sort of challenges that

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Speaker 1: he's seen in that twenty one years.

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Speaker 4: Policy making cannot be divorced from the reality the market.

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Speaker 3: Let's not we try to be clever. What we see

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Speaker 3: is the market.

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Speaker 4: The market is not something that you can luncheon into

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Speaker 4: accepting your point of view. It's the market's view that

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Speaker 4: ultimately policy makers and politicians need to take account. That

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Speaker 4: doesn't mean that that view is invariably correct or is

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Speaker 4: always the right one. It is just harsh reality.

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Speaker 1: So harsh reality. I mean, this has become a very

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Speaker 1: political issue, hasn't it. What have some of the biggest

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Speaker 1: challenges that Snoweman's seen.

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Speaker 12: I mean, first and foremost, I would just point to

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Speaker 12: this huge increase of debt that he's overseen. So of

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Speaker 12: course it's the government itself that decides how much the

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Speaker 12: DMO needs to raise. It's not the DMO itself which

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Speaker 12: picks things like, you know, the different maturities of bonds

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Speaker 12: and when to do the autions. But he tells this

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Speaker 12: a nice anecdote. It was I think the first full

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Speaker 12: fistful year at the DMO that he oversaw and the

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Speaker 12: amount that he needed to raise doubled to about fifty billion,

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Speaker 12: and he said he was really excited at the prospect

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Speaker 12: of this nice challenge of raising fifty billion. But over time,

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Speaker 12: you know, that grew, that grew steadily, and I think

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Speaker 12: at Pete during the pandemic and nearly five hundred billion

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Speaker 12: pounds this year it's two hundred and sixty five, you know,

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Speaker 12: And he's managed, she's managed issuing that amount of debt

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Speaker 12: through some pretty tumultuous time. So he joined in two

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Speaker 12: thousand and three. So he's lived and worked through the

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Speaker 12: global financial crisis, Europe's sovereign debt crisis, the pandemic, and

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Speaker 12: of course the guilt's meltdown and the trust era of

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Speaker 12: twenty two.

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Speaker 2: And of course that's that you talked to Roberts Taman

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Speaker 2: about when you spoke to him as well. Here's his

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Speaker 2: view of that moment in twenty twenty two.

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Speaker 3: I wouldn't be honest if I didn't say that I was.

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Speaker 4: I'm sure, like others, genuinely concerned because the LDI crisis

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Speaker 4: was clearly impacting on market functioning. And this is something

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Speaker 4: and I do think the Bank of a General, which

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Speaker 4: was you know, people criticized baking a lot, but I

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Speaker 4: don't think it's received enough credit for the way it

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Speaker 4: got through that period and the way it also assisted

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Speaker 4: the market and actually the pension industry itself to get

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Speaker 4: through what was an immediate, classic, absolutely classic liquidity crisis.

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Speaker 3: You know, it was straight out of a textbook.

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Speaker 2: Yeah, I certainly him reflecting on that pavotal moment for

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Speaker 2: the guilt markets as well. Alice, what have been some

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Speaker 2: of I suppose the blemishes on his records, are there any?

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Speaker 12: I don't know if i'd really cool it a blamesh

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Speaker 12: but I would point to one auction during his tenure

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Speaker 12: where the DMO didn't sell all of the bonds they

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Speaker 12: planned to on that particular day. In that particular sale.

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Speaker 12: It was the financial crisis in two thousand and nine,

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Speaker 12: and Stephen, as is his right, made a decision to

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Speaker 12: reject some of the lowball bids for the bonds. And

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Speaker 12: he's always very keen to stress that's because part of

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Speaker 12: the dmo's mandate is to get the best value for

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Speaker 12: the taxpayer. And it was already a very volatile period

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Speaker 12: for Gilts. Leeman had failed six months earlier, the UK

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Speaker 12: banks were being bailed out, the Bank of England had

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Speaker 12: just announced q E quantitative using for the first time

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Speaker 12: ever earlier, and investors were trying to get their hairs

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Speaker 12: around that. So it's just really kind of choppy, tricky time.

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Speaker 12: And as you expect, when the news broke that the

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Speaker 12: auction hadn't been fully covered, you know, the price of

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Speaker 12: Guilt's fell because it's very unusual for an auction not

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Speaker 12: to be fully bought, and Gordon Brown, who was Prime

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Speaker 12: Minister at the time, came out of the statement defending

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Speaker 12: or sort of asserting his confidence in the market. So

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Speaker 12: I think that just kind of underlies the difficulties of

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Speaker 12: the job and the pressure to the job. You know,

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Speaker 12: you're in the hot seat when things go wrong.

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Speaker 1: No, absolutely, did you mention advice then for his successes?

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Speaker 1: Do we know much about who might succeed him?

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Speaker 12: We don't, but I think we're going to know very soon.

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Speaker 5: You know.

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Speaker 12: I think if he were to give advice to his

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Speaker 12: success it would be about ensuring that you always have

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Speaker 12: liquidity so that you can always sell the debt you

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Speaker 12: need to, no matter the size of that target.

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Speaker 3: You know.

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Speaker 12: I think there's various ways that he's ensured that he

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Speaker 12: can do that. So the guilt market has become much

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Speaker 12: more international under his leadership, so it's no longer this

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Speaker 12: fringe market that it once was. And you know, he

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Speaker 12: spends lots of time traveling around the world speaking to

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Speaker 12: international investors. You know. It also issues bonds and a

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Speaker 12: wide arrange of maturities which appeal to different parts of

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Speaker 12: the investor base. I think he'd also make the point

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Speaker 12: that the market isn't just a load of numbers on

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Speaker 12: his screen. It's the views of a huge range of

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Speaker 12: different people. And politicians and policymakers ignore those views at

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Speaker 12: their peril. You know, I think we heard him talking

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Speaker 12: about that point earlier. You can't simply tell the market

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Speaker 12: that it's wrong and government's need fully functioning markets.

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Speaker 2: Yeah, very interesting stuff, Alice dad Hillerfics and Rates reporter,

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Speaker 2: Thank you very much, and you can read more of

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Speaker 2: Alis's story on Bloomberg Dot Command on the terminal, the

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Speaker 2: bond market whisperer who raised three trillion pounds for Britain.

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Speaker 1: Now let's move well to another big beast in the markets,

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Speaker 1: of course, the US Treasury Secretary Janet Yellen has met

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Speaker 1: a host of Chinese leaders on her second trip to

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Speaker 1: the country in nine months. While it is a signed

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Speaker 1: perhaps of more stable US China ties, Yellen was also

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Speaker 1: highly critical of how Chinese leaders have managed their economy.

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Speaker 1: Joining US now is Bloomberg's Federal Reserve reporter Chrisopher Condon,

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Speaker 1: who is traveling with Janet Yellen, and he joins US Live. Chris,

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Speaker 1: good morning, Thank you so much for your time. Just overall,

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Speaker 1: how has this trip gone?

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Speaker 9: Well? I took it done pretty well from the US perspective. Certainly,

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Speaker 9: Yellen kan the heres to Beijing or just about to

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Speaker 9: hear from her about ten minutes she's going to press

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Speaker 9: commentary at the US Ambassador's residents in Beijing. She came

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Speaker 9: here and her number message was that the Chinese are

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Speaker 9: overstimulating apply side of their economy, particularly in new industries

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Speaker 9: and clean energy. In the US and other countries are

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Speaker 9: very fearful that this will result in a flood of

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Speaker 9: goods heading out onto global markets, distorting prices and threatening

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Speaker 9: some industries that the US is keen to foster at home.

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Speaker 9: She got that message across very loud and claire. In fact,

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Speaker 9: last Friday in Guangzhou in southern China, she just hammered

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Speaker 9: away at that theme and somewhat sposingly. I think the

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Speaker 9: Chinese have not responded in any harsh manner. There was

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Speaker 9: a commentary in Sanjula, the state news agency, but there's

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Speaker 9: nothing direct from Chinese officials castigating her for the public

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Speaker 9: criticism that she gave them. The talks seemed to go

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Speaker 9: fairly well. They had all the attendant ceremonies surrounding the visit,

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Speaker 9: with the dinners and tours and such, so in that sense,

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Speaker 9: she got her message off, and she had seemingly provoked

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Speaker 9: the Chinese in any particularly negative way, and the Chinese

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Speaker 9: crucially agreed to a new sort of component to ongoing

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Speaker 9: talks that will focus exclusively on this over capacity issue.

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Speaker 2: One of the other things that Gallen has mentioned during

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Speaker 2: this trip is that Chinese firms will face significant consequences

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Speaker 2: for supporting Russia's war in Ukraine. Of course a really

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Speaker 2: important issue for Europe. What could those consequences be well.

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Speaker 9: Ultimately, of course it could include sanctions. The main tool

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Speaker 9: that the US and the Treasury has in this domain

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Speaker 9: is the ability to cut off financial institutions on their

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Speaker 9: access to US dollars. If you're a bank and you

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Speaker 9: operate in any way internationally, or you're just a large

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Speaker 9: domestic bank in your country, you need access to US dollars,

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Speaker 9: either through a branch in the US or through a

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Speaker 9: correspondent relationship to a bank in the US. If they

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Speaker 9: decide if a bank is designated by the Treasury, you

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Speaker 9: lose that access. But it's almost like a death sentence

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Speaker 9: for a large day that it's taken very seriously around

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Speaker 9: the world in all countries. I think Chinese will be

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Speaker 9: very sensitive about any suggestion if she were to make

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Speaker 9: it that the US would be considering sanctioning in this

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Speaker 9: kind of penalty against Chinese banks over their dealings with Russia.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: stories making news from London to Wall Street and beyond.

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