Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is the Bloomberg Daybakut podcast, available every morning on Apple,
Speaker 2: Spotify or wherever you listen. It's Wednesday, the twenty seventh
Speaker 2: of March. Here in London. I'm Caroline Hepka and.
Speaker 3: I'm Lizzie Burden. Coming up today the latest on the
Speaker 3: Baltimore Bridge collapse disaster. As emergency services moved from rescue
Speaker 3: to recovery.
Speaker 2: The Japanese yen hits its lowest level against the dollars
Speaker 2: since the nineties, as Japan moves a step closer to
Speaker 2: currency intervention.
Speaker 3: Plus, you can't buy happiness, but you can buy chocolate.
Speaker 3: But as the price of coco hits a record high,
Speaker 3: it's likely to cost you a whole lot more.
Speaker 2: Let's start with a roundup of our top stories.
Speaker 3: Six people are presumed dead following the collapse of Baltimore's
Speaker 3: Francis Scott Key Bridge after it was struck by a
Speaker 3: container ship. More from Boomberg's Dan Schwartzman.
Speaker 4: Now, the search for survivors at the Francis Scott Key
Speaker 4: Bridge collapse site in Baltimore, Maryland was suspended overnight, with
Speaker 4: the six people missing deemed to be deceased. The six
Speaker 4: were construction workers from a business called Browner Builders, and
Speaker 4: we're doing repair work on the bridge. Coastguard Rear Admiral
Speaker 4: Shannon Gilreath explains why the operation was transitioning to a
Speaker 4: new phase.
Speaker 5: Based on the length of time that we've gone in
Speaker 5: the search, the extensive search efforts that we've put into it,
Speaker 5: the water temperature that at this point we do not
Speaker 5: believe that we're going to find any of these individuals
Speaker 5: still alive.
Speaker 4: That's Coastguard Rear Admiral Shannon Gilreath. The search for the
Speaker 4: missing is resuming this morning. Dan Schwartzman, Bloomberg Radio.
Speaker 3: The incident also adds pressure to already strained global supply chains,
Speaker 3: Baltimore being one of the busiest ports on the US
Speaker 3: East Coast.
Speaker 6: Now.
Speaker 2: The Japanese y end slid to its lowest against the
Speaker 2: US dollars is nineteen ninety, with Japan's Finance minister warning
Speaker 2: of bold action. The Cauncy's pair slid to one hundred
Speaker 2: and fifty one ninety seven in trading this morning, before
Speaker 2: pulling back when Minister Shinichi Zuki hinted at potential intervention
Speaker 2: that is past the level that prompted Japan to weighed
Speaker 2: into markets. In October twenty twenty two, hedge funds and
Speaker 2: asset managers combined held a near record level of bearish
Speaker 2: positions against Japan's currency last week.
Speaker 3: As many as eight million UK workers are at risk
Speaker 3: of losing their jobs to AI. This according to a
Speaker 3: think tank, The Institute for Public Policy Research, is forecasting
Speaker 3: that the new technology could add three hundred and six
Speaker 3: billion pounds a year to the UK economy or wype
Speaker 3: out nearly a quarter of its jobs. James Wilcock has.
Speaker 7: More a job's apocalypse. That's what the IPPR is calling it.
Speaker 7: They analyzed twenty thousand tasks in the UK across all
Speaker 7: job types to see how easy they could be to automate.
Speaker 7: What emerged is a sesaw model. In the worst case scenario,
Speaker 7: seven point nine million jobs are lost to no economic gain.
Speaker 7: In the best case scenario, zero jobs are lost to
Speaker 7: the tune of thirteen percent and your GDP growth. LinkedIn's
Speaker 7: UK boss Jean Chamberlain is on the optimistic side.
Speaker 3: This is really important to kind of consider what does
Speaker 3: AI actually provide.
Speaker 8: It doesn't replace someone's job.
Speaker 3: This is just about giving people a helping hend a
Speaker 3: starting point.
Speaker 7: But for the IPPR it's a bleaker outlook. They say.
Speaker 7: The key factor in where on the seesaw we end
Speaker 7: up is how government plans the labor forces transition to AI,
Speaker 7: and currently they say there isn't one in London, James Walcock,
Speaker 7: Bloomberg Radio.
Speaker 2: Meanwhile, more than a quarter of UK tech businesses want
Speaker 2: to sell their firm abroad. A Berkeley survey of tech
Speaker 2: founders exit strategies found that sixteen percent want to sell
Speaker 2: their firms to a foreign buyer and ten percent would
Speaker 2: sell shares abroad. More than half said that the lack
Speaker 2: of funding, talent and infrastructure is holding back their company's growth.
Speaker 2: The data suggests that Prime Minister is she Sunac still
Speaker 2: has work to do to persuade British companies to stay
Speaker 2: in the UK as they try to scale up.
Speaker 3: Coco futures reached a record ten thousand dollars per metric
Speaker 3: ton this week. The commodity has since raised those gains,
Speaker 3: taking a break from a historic rally which has seen
Speaker 3: prices double in twenty twenty four. Poor harvests from West
Speaker 3: African growers ravaged by bad weather have spurred a third
Speaker 3: straight annual Coco supply deficit, which has sent prices soaring.
Speaker 3: Bloomberg's on duro a Ganga says there are a number
Speaker 3: of factors behind the production slow down.
Speaker 9: Ghana has also been having challenges with regards to financing
Speaker 9: and so the government was not able to adequately subsidize fertilizer. Internationally,
Speaker 9: we are also seeing their new rules incoming in Europe
Speaker 9: which will block Coco that destroys for US and has
Speaker 9: child libor in the Coco production Valichin from heating.
Speaker 3: The market, Bloomberg's on duero Oganga speaking there. Pressures are
Speaker 3: also building in the financial market, where some traders have
Speaker 3: sold futures to hedge against the physical holdings.
Speaker 2: Now, former President Donald Trump's social media startup sort in
Speaker 2: its first trading day as a public company. Here's the
Speaker 2: moment that Bluemok's cowl Massa called Trump Media and Technology
Speaker 2: Group at the.
Speaker 8: Close uppermost sixty percent. It ties today it's first official
Speaker 8: day of trading. We know it was a spac and
Speaker 8: so of course a merger with Digital World acquisition. It's
Speaker 8: an unprofitable company. This is something that we've been trying
Speaker 8: to dig into a little bit more today finishing the
Speaker 8: day with a sixteen percent gain, but soaring. It did
Speaker 8: also trigger a brief volatively related trading hot but nonetheless,
Speaker 8: as I said, some outperformance in that one day two
Speaker 8: will be an interesting trade, no doubt.
Speaker 2: So Blombog's Carol Massa there She says that the now
Speaker 2: seven point nine billion dollar valued company has a meme
Speaker 2: like appeal. It's become the most expensive US dot T
Speaker 2: bet against. Short Sellers are having to pay up to
Speaker 2: three hundred times the average cost to borrow its shares.
Speaker 2: There are a very tiny amount of shares actually available
Speaker 2: to borrow this according to the financial analytics firm S
Speaker 2: three Partners. So that on the presence former presidents social
Speaker 2: media start up behind Truth Social now a search and
Speaker 2: rescue operation for survivors of the collapse Francis Scott Key
Speaker 2: Bridge in the US city of Baltimore has been suspended.
Speaker 2: Officials say that they are now transitioning their efforts to
Speaker 2: recovery missions. With six people presumed dead, the aftermath of
Speaker 2: the bridge is collapse throws another spotlight on the fragile
Speaker 2: nature of global supply chains that have already been strained
Speaker 2: by the drought in the Panama and missile attacks in
Speaker 2: the Red Sea. Our trades are Brendan Murray joins US.
Speaker 2: Now we understand the bridge collapse will cause weeks, if
Speaker 2: not months of trade disruptions.
Speaker 1: Yeah, exactly. I think that the initial and the next
Speaker 1: steps are going to be a lot of finger pointing
Speaker 1: at how this happened. You know, how did the ship
Speaker 1: itself not have a backup system if it's power failed,
Speaker 1: Why did the bridge pilings not have fenders around them,
Speaker 1: some protective equipment around them, And how did a bridge
Speaker 1: collapse so easy and so thoroughly in this situation. The
Speaker 1: immediate effect on supply chains is going to be the
Speaker 1: Port of Baltimore has closed indefinitely. They're going to have,
Speaker 1: you know, weeks or months of salvage operations to clean
Speaker 1: up the site. All that cargo is going to have
Speaker 1: to go somewhere else, places like Norfolk, Virginia, Charleston, South Carolina, Savannah, Georgia.
Speaker 1: The big ships will have to go to New York
Speaker 1: and New Jersey. So there's going to be a period
Speaker 1: where supply chains have these wrinkles that need to be
Speaker 1: ironed out. It's going to be it's going to mean
Speaker 1: delays for people and businesses for their parts and their products,
Speaker 1: and it's going to possibly mean some higher costs in
Speaker 1: the short term.
Speaker 3: And BRENDA just give us a sense of the scale
Speaker 3: of the trade that was going through this port. You
Speaker 3: had lots of cars and light trucks going through it.
Speaker 3: How does it compare to other sorts of blockages that
Speaker 3: we've seen in Maine waterways.
Speaker 1: So Baltimore has about three percent of the cargo volume
Speaker 1: on the US East Coast and Gulf Coast, so it's
Speaker 1: a small amount of containerized cargo that goes through there,
Speaker 1: but as you mentioned, it's a big auto export and
Speaker 1: import gateway. So a lot of the companies that ship
Speaker 1: their cars in and out of their companies like BMW
Speaker 1: and Volkswagen and Ford and GM, some of them have
Speaker 1: docks that are not affected by this, they're on the
Speaker 1: ocean side of the bridge. Some of them will have
Speaker 1: operations that will be affected. So we'll have to sort
Speaker 1: of pick through the situation on the ground there to
Speaker 1: see which ones will be affected and which ones.
Speaker 3: Won't, And if we zoom out, what's the kind of
Speaker 3: big picture read through to global trade and the ability
Speaker 3: of these isolated events to impact global flows.
Speaker 1: So there isn't going to be a widespread impact, but
Speaker 1: there will be isolated situations. Baltimore was also a big
Speaker 1: coal export port, so it's and a lot of that
Speaker 1: went to developing countries, say India, so you know that
Speaker 1: still use a lot of coal for fuel. So there
Speaker 1: will be isolated situations like that. There was a lot
Speaker 1: of construction equipment that went through Baltimore. You know, it's
Speaker 1: coming up on spring in the construction season, and a
Speaker 1: lot of farm equipment went through there. It's you know,
Speaker 1: a couple month or two from planting season for a
Speaker 1: lot of farmers in the Midwest. So there will be
Speaker 1: some isolated industries that are affected, but most of the
Speaker 1: economs we talked to says it won't really mean much
Speaker 1: of a blip on the US economy as a whole,
Speaker 1: or really any more widespread effect on the global economy.
Speaker 3: Okay, Brendan Murray our trade, So thank you so much
Speaker 3: for bringing us the trade impact of that story. Of course,
Speaker 3: it's also had a serious human toll, six people presumed dead,
Speaker 3: and we will continue to bring you the latest on
Speaker 3: that story throughout the program.
Speaker 2: Now let's also turn our attention though to the main
Speaker 2: market story. This morning, Japan is edging close it would
Speaker 2: seem to currency intervention, with its strongest warning yet from
Speaker 2: the Finance Minister, Janezi Suzuki say we will take bold
Speaker 2: measures against successive moves without ruling out any options. That is,
Speaker 2: the Japanese yen slid to the weakest level in about
Speaker 2: thirty four years against the US dollar. So joining us
Speaker 2: now for more on this developing story. Bloomberg's executive editor
Speaker 2: for Asian Markets, Paul Dobson, Paul, good morning. Just explain
Speaker 2: what is behind the slide in the Japanese currency. Firstly, yeah,
Speaker 2: hi theren thanks for having me. It's quite contrarian kind
Speaker 2: of a move by the in actual fact, because just
Speaker 2: this month we saw the Bank of Japan raise interest rates,
Speaker 2: taking it out of negative territory for the first time
Speaker 2: in more than a decade. No normally that should lift
Speaker 2: the currency, and yet we're still seeing more yen weakness.
Speaker 2: So there's a few things that would explain parts of
Speaker 2: the reason for that. First of all, while the boj
Speaker 2: did hikit stressed that it was going to be cautious
Speaker 2: in moves from here, talking about retaining a commensative stance
Speaker 2: as well, and that sort of emphasized the still huge
Speaker 2: gap in relative yields between Japan and the rest of
Speaker 2: the world and the US in particular, so traders looking
Speaker 2: at carried trades and where to deposit their money going
Speaker 2: to earn much higher interest rates in dollars than they
Speaker 2: are in yen. On top of that, you know, the
Speaker 2: fact that it was just so well telegraphed by the
Speaker 2: BJ that we knew that this was coming also in
Speaker 2: the end help them, you know, move it through without
Speaker 2: causing too much market volatility, but didn't give them any
Speaker 2: any boost in terms of yen strength. And so that
Speaker 2: in addition to some of the currency weakness, and then
Speaker 2: over the other side of the trade, you've got a
Speaker 2: stronger dollar as people continue to push back those bets
Speaker 2: for when the FED will begin to cut interest rates
Speaker 2: on the other side of things. So those things combined
Speaker 2: have provided this backdrop for a week a yen.
Speaker 1: Today.
Speaker 6: In particular, we heard from one of the BJ's more
Speaker 6: hawkish members, and he again stressed that kind of a
Speaker 6: commotative position, and so that was taken as a bit
Speaker 6: of a red rag to a bull as it were,
Speaker 6: for the currency market, pushing it through those levels that
Speaker 6: we've been watching for some time around the one point
Speaker 6: fifty one ninety five level.
Speaker 3: Paul can just spell out for us, when the finance
Speaker 3: minister says that they'll take bold measures against excessive moves,
Speaker 3: what does that mean.
Speaker 6: Yeah, well, so there's almost like a traffic light signal
Speaker 6: system from the finance ministry. Remember it's the government, not
Speaker 6: the central bank that intervenes in currency markets in Japan,
Speaker 6: so they have a sort of scale of warnings, and
Speaker 6: the market is so used to detecting the changes in
Speaker 6: tone depending on the rhetoric that's chosen by the officials.
Speaker 6: So this latest comment bold action is another step up
Speaker 6: in terms of sort of getting the market ready for
Speaker 6: the possibility that the government would step into the market
Speaker 6: and begin buying the yen in order to support it.
Speaker 6: We're not there yet, and there are still perhaps a
Speaker 6: couple of extra levels on the Richter scale of warnings
Speaker 6: from the MOF, but we're getting pretty close. So they're
Speaker 6: telling us that they're serious about this right now.
Speaker 2: And it can get expensive. I mean, in twenty twenty two,
Speaker 2: Tokyo spent you know, billions in terms of supporting the yen.
Speaker 6: It can, but I think the view both the government
Speaker 6: and the Central Bank for that matter, is that a
Speaker 6: week en from here is not really helpful. Well, in
Speaker 6: the past, a week een would help Japanese exporters, that
Speaker 6: would help to counter balance, you know, some of the
Speaker 6: stresses in the market. At these levels, those exporters don't
Speaker 6: really stand to benefit that much more. On the flip
Speaker 6: side of it, the weaker exchange trait makes inflation a
Speaker 6: little bit more unruly and undesirable, so they're minded to
Speaker 6: protect it even if it costs. What they say is
Speaker 6: they don't mind if it's weakening so much. It's not
Speaker 6: the outright level so much as the pace of depreciation.
Speaker 6: But I think that probably in the aftermath of that
Speaker 6: hike from the central bank, the last thing that they
Speaker 6: want to see is too rapid depreciation of the currency.
Speaker 6: From here.
Speaker 3: And Paul, you've seen this powering the nick closing three
Speaker 3: tenser percent off a record high. How much is that
Speaker 3: down to the yen and this story about currency intervention
Speaker 3: the BOJ how much is it about fundamentals in Japanese equities.
Speaker 6: Yeah, well a little bit half and half, I would say,
Speaker 6: you know, so, based on what I just said that
Speaker 6: a week yen from here is that helpful for exporters. Nevertheless,
Speaker 6: you know does have some supportive function for the equities market,
Speaker 6: and so you would see a little bit of strength
Speaker 6: off the back of that. But there's a pretty good
Speaker 6: news story in the backdrop for Japanese companies in general anyway.
Speaker 6: They're able to raise prices, which is something that was
Speaker 6: quite surprising or even on thought of a few years ago.
Speaker 6: But this inflationary environment is enabling them to widen their
Speaker 6: profit margins and without fear of driving away customers. They
Speaker 6: also are taking steps to improve their corporate governance right
Speaker 6: across the board, unwinding kind of cross shareholdings, getting rid
Speaker 6: of so much cash that they have pent up on
Speaker 6: the balance sheet, and looking to expansion as well. So
Speaker 6: there's quite a good feel good facts are behind the moves.
Speaker 6: So even if you're looking at Japanese equities measured in
Speaker 6: the dollar rather than the end, they've still been on
Speaker 6: a pretty good upward path this year.
Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the
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Speaker 3: And I'm Lizzie Burden. Join us again tomorrow morning for
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