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

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Speaker 2: This is the Bloomberg Day ba q At podcast, available

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

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Speaker 2: the twentieth of February in London. I'm Caroline Hepki and.

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Speaker 1: I'm Stephen Carroll. Coming up today. Donald Trump says a

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Speaker 1: new trade deal with China is possible.

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Speaker 2: Britain and France try to mediate after the US President

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Speaker 2: repeats a Russian narrative calling Ukraine Zelensky a dictator.

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Speaker 1: Plus why the US election is feeding a frenzy of

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Speaker 1: activity in the Bank of England's gold vaults.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Donald Trump says a new trade deal with China is possible,

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Speaker 1: weeks after imposing tariffs on imports from the country. Speaking

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Speaker 1: to reporters on Air Force one, the US President praised

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Speaker 1: China's president.

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Speaker 3: It's possible, but well, we did a great trade deal

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Speaker 3: with China. We did it great for the farmers, great

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Speaker 3: for manufacturers. They had about fifty billion dollars worth of

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Speaker 3: our product and we were making a buy it. The

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Speaker 3: problem is that Biden didn't push them to and here too.

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Speaker 1: It Trump did not outline the parameters of a potential deal,

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Speaker 1: and any agreement would face significant obstacles, some of his

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Speaker 1: own making. His comments come one day after hinting at

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Speaker 1: new global tariffs on car, semiconductor and pharmaceutical imports.

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Speaker 2: The European Union says that it is ready to discuss

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Speaker 2: lowering its own car tariffs on US imports to avoid

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Speaker 2: the trade war. The East tariffs on American cars are

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Speaker 2: currently at ten percent compared with the two and a

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Speaker 2: half percent tariff levels in the US. The Block Trade

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Speaker 2: Commissioner Maras Sefkvich says that they will do their quote

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Speaker 2: utmost to avoid an escalatory tariff clash.

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Speaker 4: If we are going to talking about lowering the tariffs,

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Speaker 4: even eliminating the tarifs, let's say for industrial products, this

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Speaker 4: would be something which we are ready to discuss. We

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Speaker 4: are ready to go for it. You aready to discuss,

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Speaker 4: including ready to look at the tire for.

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Speaker 2: The Sefkovich was speaking at the American Enterprise Institute in Washington,

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Speaker 2: where he held talks with the US administration's trade team.

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Speaker 2: America is expected to lay out a range of so

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Speaker 2: called reciprocal tariffs with countries that it sees trade barriers

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Speaker 2: with in the coming months.

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Speaker 1: Kris Starmer and Emanuel Macron are trying to mediate after

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Speaker 1: the US president called Ukraine's Vladimir Zelenski a dictator. The

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Speaker 1: leaders of the UK and France both called Zelensky to

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Speaker 1: express their support for him and announced that they would

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Speaker 1: visit Washington next week. European leaders are reeling at America's

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Speaker 1: drastic change in tone towards Ukraine, which is heading into

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Speaker 1: its fourth year fighting off Russia's full scale invasion. The

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Speaker 1: former UKM Basstard to the United States, Kim Darrek, says

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Speaker 1: Trump's comments are stunning.

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Speaker 5: All of this is very damaging and is also a

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Speaker 5: Russian script. Frankly, it's very very strange stuff. I mean,

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Speaker 5: Trump's team aren't saying very much of this, so this

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Speaker 5: is all coming out of the White House and it's

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Speaker 5: deeply disturbing.

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Speaker 1: Dark resigned during Trump's first term after emails calling Trump

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Speaker 1: inept were leaked. Celenski meets with the US Envoy Keith

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Speaker 1: Kellogg later today in Kiev to brief him on the

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Speaker 1: war efforts.

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Speaker 2: The G twenty stars today without a US foreign presence.

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Speaker 2: The US Sectory of State will not attend the summit

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Speaker 2: of Foreign Ministers in South Africa after Donald Trump lasted

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Speaker 2: the host countries equality policies. America's absence comes as South

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Speaker 2: Africa wants to use the gathering to push for new

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Speaker 2: global institutions that better represent bricks countries and the global South.

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Speaker 1: Airbos expects to make fewer planes this year than analysts

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Speaker 1: that expected, as trade tensions cloud its outlook. The European

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Speaker 1: aerospace giant aims to deliver eight hundred and twenty planes

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Speaker 1: to its clients this year, an increase on last year.

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Speaker 1: Continues to struggle with supply chain issues that extend back

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Speaker 1: to the COVID nineteen pandemic. The company forecasted just earnings

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Speaker 1: before interest and taxes will be around seven billion euros

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Speaker 1: this year, although that prediction doesn't take account of any

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Speaker 1: potential tariffs.

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Speaker 2: The European Central Bank may soon need to discuss a

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Speaker 2: pause or entirely suspend its interest rate cutting program. According

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Speaker 2: to policymaker Isabelle Schnabel, officials should discuss dropping language describing

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Speaker 2: monetary policy as still restrictive in their next post decision statement.

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Speaker 2: Traders have cut bets on further ECB aising after Schnabel's

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Speaker 2: comments investors in our pricing and additional seventy two basis

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Speaker 2: points of cuts in twenty twenty five. That's compared with

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Speaker 2: seventy six basis points before she spoke.

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Speaker 1: Confidence among UK households has slipped to a new low

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Speaker 1: sinse last July's election. That's as the public faces a

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Speaker 1: darkening outlook featuring rising inflation and slowing growth.

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Speaker 6: Bloombergs team at a Bio has more.

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Speaker 7: Half the British population expects the economy to worsen over

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Speaker 7: the next three months, according to new figures from the

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Speaker 7: British Retail Consortium. That's the worst rate since the Labor

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Speaker 7: Party's landslide victory in July twenty twenty four. It's a

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Speaker 7: sharp reversal from Kirs Darmer's first month as Prime Minister,

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Speaker 7: when the Body Sentiment Monitor score hit plus two. That

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Speaker 7: number has now dropped to minus thirty seven. The news

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Speaker 7: comes as the UK government fights to turn around consumer

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Speaker 7: and business confidence after firms were rattled by more than

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Speaker 7: forty billion pounds of tax tikes in London.

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Speaker 6: Tiwa Adubayo, Bloomberg Radio.

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Speaker 2: Those are top stories for you this morning now in

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Speaker 2: terms of the markets and where we stand Champs saying

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Speaker 2: that a new China trade dealer is possible, but few details.

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Speaker 2: The on strengthens two tens of one percent on the

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Speaker 2: back of that. But really we've started the day on

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Speaker 2: quite a downbeat note, a real kind of risk of mood,

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Speaker 2: which we did see a little bit of yesterday. The

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Speaker 2: European ecty market slid on the usox fifty index down

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Speaker 2: one and a half percent of the end of the day.

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Speaker 2: That was the worst session since December, so as a sis,

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Speaker 2: quite a sour mood. Equities this morning, MSCIH Pacific Index

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Speaker 2: down six tenths of one percent. You've got US DOT

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Speaker 2: futures also in the red. The nick A two two

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Speaker 2: five down by one almost one and a half percent

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Speaker 2: this morning. The En leading gains in the FX markets,

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Speaker 2: rising zero point eight percent this morning. Expectations of more

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Speaker 2: boj titany got the blue Big Dollar Spot index this

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Speaker 2: morning actually still a little bit softer in the red

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Speaker 2: right now. Those are the markets.

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Speaker 1: In a moment, we'll bring you more on Donald Trump's

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Speaker 1: latest comments on trade and on Ukraine, plus how a

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Speaker 1: gold rush is affecting the operation of the vaults under

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Speaker 1: the Bank of England. But amidst all the geopolitical news

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Speaker 1: of the moment, a note of optimism from our opinion

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Speaker 1: columnist Tarachwayu on this morning. He's been writing about how

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Speaker 1: he's keeping his New Year's resolution to take up running again,

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Speaker 1: and it's thanks to a fitness tracker. So Howard gave

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Speaker 1: up running a decade ago because of knee pain, but

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Speaker 1: he wanted to get back to it at pushing his

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Speaker 1: deadline past New Year's Day to Chinese New Year, but

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Speaker 1: trying to get there before Persian Year or Thy New Year,

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Speaker 1: which are in March or April. And he said that

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Speaker 1: actually getting a fitness tracker has really helped because he

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Speaker 1: finds the data very helpful and a good motivator to

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Speaker 1: get him out.

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Speaker 2: I think. Yeah, he's also spent what amounts to a

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Speaker 2: small fortune on all the game that goes with running,

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Speaker 2: the shoes, the jacket, the new socks, news shorts, et cetera.

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Speaker 1: Yeah, I mean I find this all quite inspiring. Harod,

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Speaker 1: who says in his piece he is sixty five years old,

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Speaker 1: so giving hope to those of us.

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Speaker 6: Who are runner as well.

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Speaker 1: Yeah, but I mean this is the time of the

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Speaker 1: year because I do a race in March is the

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Speaker 1: time of the year that I always find very difficult

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Speaker 1: running and it does get harder as you get older,

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Speaker 1: and I am feeling it this year more than I

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Speaker 1: have in previous years. Have you seen me hobbling around

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Speaker 1: the office?

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Speaker 6: That's why?

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Speaker 2: Yeah, maybe just inspiration for you. That's very good. Right,

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Speaker 2: let's bring you the latest news. Now, shall we our

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Speaker 2: top story out of the White House? Donald Trump saying

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Speaker 2: that a trade deal is possible with China, while Ukraine's

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Speaker 2: president responded to Donald Trump's accusation of him being a

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Speaker 2: quote dictator by saying that the US president has fallen

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Speaker 2: victim to Russian disinformation. Our EMEA news director Wilson Matheson

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Speaker 2: joins us now full more. Should we talk about the

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Speaker 2: trade issue? First? Donald Trump says that a deal is

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Speaker 2: possible with China, and then the EU is talking about

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Speaker 2: the possibility of cutting their own tariffs on car imports

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Speaker 2: from the US. How positively should we take those signals?

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Speaker 8: It was interesting to see the market in Asia looking

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Speaker 8: at the comments and basically interpreting them as a bit

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Speaker 8: of a throwaway remark. There was nothing specific in it

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Speaker 8: in terms of planning to do something, but it does

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Speaker 8: signal again that Donald Trump sees himself as having a

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Speaker 8: pretty good relationship with the Chinese president, Seating Ping. He

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Speaker 8: does talk warmly about him and their history of getting

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Speaker 8: deals together.

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Speaker 6: I mean they've also had.

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Speaker 8: Trade wars together, but they have had deals together. And

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Speaker 8: it seems to be again a signal that even though

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Speaker 8: he has slapped tariffs on China and has retaliated, that

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Speaker 8: they do see a pathway there, and that Trump does

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Speaker 8: see a pathway to getting deals done with China, and

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Speaker 8: if anything, he's a bit more light touch on.

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Speaker 6: China than other countries at the moment.

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Speaker 8: I mean equally, Yester, he was pondering putting twenty five

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Speaker 8: percent tariffs on lumber, So he's still very much in

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Speaker 8: the vein of looking at twenty five percent tariffs on

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Speaker 8: a whole host of products. And we need a bit

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Speaker 8: of a whiteboard, I think, to keep track of when

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Speaker 8: these are all coming due, because they're often announced and

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Speaker 8: then with the delay. So some of these are coming

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Speaker 8: up again pretty soon to actually be enacted, and that

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Speaker 8: will be the key thing is to see whether action

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Speaker 8: does follow his words.

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Speaker 1: So these potentially positive signals on trade being somewhat overshadowed

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Speaker 1: by Donald Trump's comments on Ukraine attacking President Zelansky.

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Speaker 6: What does all of this mean for Ukraine's future.

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Speaker 8: Well, you can see by the response from within Ukraine,

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Speaker 8: if anything, Trump's comments might be a bit of a

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Speaker 8: rallying cry within Ukraine for unity and certainly behind Zelinsky.

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Speaker 8: You know, people in Ukraine point out that under the

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Speaker 8: constitution they can't hold elections during a war, for example,

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Speaker 8: and obviously dispute the figures that Donald Trump talks about

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Speaker 8: when he dismisses Zlynsky as being highly unpopular, which Poles

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Speaker 8: don't really bear out. But what it really points to

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Speaker 8: again is that the US is determined to get a

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Speaker 8: deal here to end this war. They possibly see Zelinsky

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Speaker 8: as an obstacle to that. They're very much in the

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Speaker 8: vein of negotiating at the moment with Russia on possible parameters.

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Speaker 8: And the concern that you see in that is that

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Speaker 8: Ukraine and Europe are really cut out of the conversation

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Speaker 8: and possibly presented with a deal as a take or

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Speaker 8: leave it option.

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Speaker 2: The former British Prime Minister Boris Johnson appealed for calm

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Speaker 2: in the face of these comments, saying that they are

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Speaker 2: intended to quote shock Europeans into action.

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Speaker 6: Do you think he has a point?

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Speaker 8: Well, there was a bit of commentary around the speech

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Speaker 8: from the US Vice President Jadie Vance obviously at Munich

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Speaker 8: a week ago, where he used that as a forum

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Speaker 8: to really criticize Europe in its backyard. And perhaps there

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Speaker 8: is an argument that for years Europe's been talking about

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Speaker 8: improving its own defense, becoming more self reliant on defense,

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Speaker 8: spending more on defense, and not really doing an incredible

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Speaker 8: amount about it. I mean that have picked up their

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Speaker 8: contributions to NATO, but have they really revamped their defense industries.

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Speaker 8: But still, I mean, if anything, it just shows that

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Speaker 8: the relationship at this point between Trump and Salinsky is broken.

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Speaker 8: I mean it's fundamentally broken. And so how you get

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Speaker 8: from that to some kind of ceisfy ideal that's amenable

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Speaker 8: to Ukraine is very hard to see. And that I

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Speaker 8: think is probably the most important takeaway right now from

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Speaker 8: what Donald Trump said yesterday.

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Speaker 1: Okami and news director Rosslyn Mudson, thank you very much

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Speaker 1: for joining us now.

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Speaker 2: Another unexpected consequence of Donald Trump's election is being felt

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Speaker 2: in the faults of the of England. A rare arbitrage

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Speaker 2: opportunity driven by speculation that the US President will impose

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Speaker 2: tariffs on gold. It has led to a surge in

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Speaker 2: demand from traders to move bullian held in the Bank

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Speaker 2: of England's vaults over to New York. Our Metals reporter

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Speaker 2: Jack Ryan joins US Now for more on this story. Jack,

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Speaker 2: Good morning, morning guys.

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Speaker 9: How's it going?

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Speaker 2: Yeah?

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Speaker 6: Really well?

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Speaker 2: How important are the Bank of England's gold vaults to

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Speaker 2: the global markets?

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Speaker 9: They're really important kind of pool of liquidity for the market.

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Speaker 9: So London is the biggest gold trading center. It's where

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Speaker 9: most of the gold that is traded on a daily

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Speaker 9: basis is traded. And the Bank of England is a

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Speaker 9: stash of about five hundred billion worth of gold which

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Speaker 9: is mostly held by central banks, not just the UK

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Speaker 9: but other central banks around the world that the Bank

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Speaker 9: of England provides storage to. And then some commercial operators

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Speaker 9: as well who can buy it from the central banks,

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Speaker 9: who can the central banks, who can trade with them

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Speaker 9: and borrow it from them, so they kind of have

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Speaker 9: access to that pool of liquidity. And the issue really

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Speaker 9: since the US election has been people have become worried

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Speaker 9: about the maybe small probability that gold could be included

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Speaker 9: in any given tariff or in universal tariffs that Trump

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Speaker 9: may impose on trading partners. Because of that, the prices

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Speaker 9: for gold in the US have risen above the rest

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Speaker 9: of the world, and particularly prices they've risen as much

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Speaker 9: as about fifty dollars over prices in London in December

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Speaker 9: and then in mid January. And because of that, people

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Speaker 9: have been struggling to get gold out of the Bank

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Speaker 9: of England and across to the US. May maybe because

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Speaker 9: they want to just get their gold there so that

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Speaker 9: it can be subject to tariff if they want to

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Speaker 9: bring it across or b and I would suspect this

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Speaker 9: would make up the larger proportion of the flow. It's

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Speaker 9: to capture that arbitrage because if you can buy it

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Speaker 9: in London and sell it New York, it's a guaranteed

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Speaker 9: profit in the middle theyre and so that has led

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Speaker 9: to people scrambling to get gold out of the Bank

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Speaker 9: of England and get it on a flight across the Atlantic.

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Speaker 9: But the Bank of England has struggled to deal with

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Speaker 9: that kind of very intense period of demand because they

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Speaker 9: have a very small number of staff. They only have

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Speaker 9: fifteen people who are are about fifteen people who are

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Speaker 9: involved in the actual process of going down and digging

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Speaker 9: out the gold bars, and that has led for it

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Speaker 9: two weeks long delays, which is particularly a problem now

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Speaker 9: when you really want to capture an arbitrage opportunity that

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Speaker 9: can close very quickly.

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Speaker 1: Yeah, I mean it's it's I mean, it sounds stupid

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Speaker 1: to say, but obviously gold is heavy and difficult to

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Speaker 1: move around. That's are the reason that's also implicated in

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Speaker 1: this too. I mean, what's the big picture from this story?

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Speaker 6: Jack? Could this be a permanent flight of gold out

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Speaker 6: of London?

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Speaker 9: No, I don't, but most people that I've spoken to

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Speaker 9: don't think that it will be. I mean, London, for

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Speaker 9: many reasons, is the center of the gold market. As

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Speaker 9: I said, it has this huge pool of liquidity that

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Speaker 9: comes from the Bank of England, which is kind of

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Speaker 9: the I guess you could say, at the heart of

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Speaker 9: the market. And then there's lots of other privately operated

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Speaker 9: vaults around the city that a very active trading market

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Speaker 9: every day with huge training volumes. So I think London

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Speaker 9: is the terminal market for gold, and the gold in

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Speaker 9: New York because there's been lots of gold has gone

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Speaker 9: over about twenty million troy ences, so that's about sixty

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Speaker 9: billion dollars worth of gold has gone to New York

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Speaker 9: since the day of the election. I think most people

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Speaker 9: in the market, you'll expect that gold will start coming

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Speaker 9: back once if it does become clear that gold is

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Speaker 9: not going to be subject to terms.

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