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

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Speaker 2: This is the Bloomberg DAYBAQ podcast. Good morning, It's Thursday,

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Speaker 2: the ninth of October. I'm Caroline Hebge in London. Coming

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Speaker 2: up today, Israel and Hamas agree a deal to secure

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Speaker 2: the release of all hostages held in Gaza. In a

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Speaker 2: significant breakthrough, French President emmanue and Macon says he'll name

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Speaker 2: a new prime Minister by tomorrow evening. Plus why the

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Speaker 2: unquenchable global demand for AI chips is now counting on

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Speaker 2: a small European city to keep up its momentum and

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Speaker 2: the pressure is growing to make it work. Let's start

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Speaker 2: with a roundup of our top stories. Israel and Hamas

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Speaker 2: have agreed a deal for the release of all hostages

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Speaker 2: held by the Palestinian militant group in Gaza. The phase

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Speaker 2: agreement would see Israel release almost two thousand Palestinian prisoners

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Speaker 2: and withdrawing troops in Gaza to an agree read uponline,

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Speaker 2: It marks a major breakthrough in the US Katari broken

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Speaker 2: negotiations to end their two year war. Speaking on Fox

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Speaker 2: News's Hannity's Show after the agreement was announced, President Trump

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Speaker 2: praise the wide range of countries who helped to achieve

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Speaker 2: the deal.

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Speaker 3: The whole world came together. To be honest, so many

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Speaker 3: countries that you wouldn't have even thought of it, they

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Speaker 3: came together. The world has come together around this deal,

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Speaker 3: and that's something I would say that without that wouldn't happen.

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Speaker 3: So many countries that you wouldn't have thought of have

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Speaker 3: wired their best wishes and their commitment to do whatever

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Speaker 3: is necessary. The country surrounding of all signed. I mean,

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Speaker 3: they're all signed up.

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Speaker 2: The US president speaking there to Fox News, the deal,

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Speaker 2: we'll see Hamas free about twenty people who are still

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Speaker 2: alive who were taking during the October twenty twenty three attack,

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Speaker 2: alongside the remains of more than two dozen people who

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Speaker 2: died in captivity. Meanwhile, aid to Gaza would be resumed

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Speaker 2: as part of the deal. If the agreement holds, it

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Speaker 2: will mark a major step towards ending the conflict. The

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Speaker 2: deal would also be a major diplomatic victory for Trump,

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Speaker 2: who had presented a twenty point plan aimed at ending

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Speaker 2: the conflict last week. The statement from Hamas also included

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Speaker 2: an extraordinary shift in tone, adding that the group valued

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Speaker 2: quote the efforts of US President Donald Trump Wyel al

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Speaker 2: Zayat is an associate fellow of the Middle East Institute

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Speaker 2: and says this could be a major turning point in

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Speaker 2: the war.

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Speaker 4: Based on what the president of the American President Dealtrup

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Speaker 4: has said and some other countries have confirmed, it looks

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Speaker 4: promising and it would be a huge deal. This is

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Speaker 4: the biggest breakthrough since the conflict began.

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Speaker 2: Whyell al Zayat speaking there, But many questions remain about

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Speaker 2: whether ac spark can hold and the next steps in

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Speaker 2: the peace plan. To mark two years since Hamas's October

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Speaker 2: seventh attacks on Israel which triggered the conflict, killing one

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Speaker 2: thy two hundred people and abducting another two hundred and fifty.

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Speaker 2: Around sixty seven thousand Palestinians have died in the subsequent conflict,

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Speaker 2: according to the Hamas run Health Ministry. More than four

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Speaker 2: hundred and fifty Israeli soldiers have also been killed. So

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Speaker 2: that's what is happening in the Middle East. Let's go

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Speaker 2: to France. Next to Emmanuel Macon says that he will

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Speaker 2: name a new prime minister by tomorrow evening. That's after

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Speaker 2: two days of crunch talks with political leaders, which were

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Speaker 2: led by outgoing Prime Minister Sebastian Locorno aimed at building

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Speaker 2: support to pass a budget. Speaking to France two television

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Speaker 2: yesterday evening, Locorno said there's potential for compromise in Parliament

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Speaker 2: after the talks.

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Speaker 5: Well, what I can say tonight after my discussions is

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Speaker 5: there is an absolute majority in the National Assembly which

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Speaker 5: refuses a new dissolution. I feel a narrow path is

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Speaker 5: at all possible. It's difficult, but I told the President

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Speaker 5: of the Republic the prospects of new snap legislative elections

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Speaker 5: are receding, and I think the situation allows for the

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Speaker 5: appointment of a new prime minister within the next forty

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Speaker 5: eight hours.

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Speaker 2: Out going French Prime ministers Sebasielacorno speaking there, he also

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Speaker 2: said that the next premiere should have no ambitions to

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Speaker 2: run for president in twenty twenty seven. Failure by a

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Speaker 2: new prime minister to former cabinet would mean that emmanue

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Speaker 2: and Macon would either have to call a parliamentary election

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Speaker 2: a point yet another candidate, or resign himself. China has

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Speaker 2: tightened its export controls on rare earths to include items

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Speaker 2: manufactured abroad. The move expands restrictions on an industry that

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Speaker 2: has fueled trade tension between Beijing and Washington. The country's

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Speaker 2: Ministry of Commerce has said that exporters of items that

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Speaker 2: use rare earth sourced from China will now need to

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Speaker 2: obtain an export license. China is also likely to block

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Speaker 2: exports to foreign arms manufacturers and some semiconductor firms. Beijing

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Speaker 2: has previously used its dominance of the sector as leverage

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Speaker 2: and negotiations with the US. These new restrictions come just

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Speaker 2: weeks before present Trump and Jijingping are due to meet

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Speaker 2: in person to strike a broader trade deal. HSBC plans

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Speaker 2: to take Hang Seng Bank private in a major bet

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Speaker 2: on the future of Hong Kong. The London based bank

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Speaker 2: is spending fourteen billion dollars to buy the third of

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Speaker 2: Hang Seng that it doesn't already own. HSBCCO Georgelle Hedri

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Speaker 2: says it will deliver shareholder value.

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Speaker 6: This is an investment for growth. This is an investment

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Speaker 6: in Hong Kong, one of our home markets and one

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Speaker 6: of our key markets. Hangkseng is an iconic bank in

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Speaker 6: Hong Kong. It's a leading local bank. It has a

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Speaker 6: fantastic customer franchise, have a very strong financial position and

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Speaker 6: the idea here is to effectively take private Hanksyng the HSBCCO.

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Speaker 2: They're speaking exclusively to Bloomberg. The deal values hang Saying

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Speaker 2: at thirty seven billion dollars. It comes as Hong Kong

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Speaker 2: is trying to re emerge from China's real estate slump.

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Speaker 2: Shares in Hang Seng Bank rows twenty six percent, while

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Speaker 2: HSBC's shares fell six percent in early trading in Hong Kong.

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Speaker 2: Here in the UK, Conservative Party leader Kemy Baidenog is

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Speaker 2: promising to cut taxes on house buying in an attempt

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Speaker 2: to change the fortunes of her party. The pledge to

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Speaker 2: cut stamp duty was a surprise announcement at the end

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Speaker 2: of her party's and newal conference. The Tories have seen

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Speaker 2: their popularity collapse following fourteen years in government until twenty

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Speaker 2: twenty four, with some warning that they may cease to

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Speaker 2: exist as a major party. Baidenock says she'll change that.

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Speaker 7: We need bold ideas. We need a positive vision for

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Speaker 7: this country and a plan to deliver it. We need

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Speaker 7: a new approach, a new approach that delivers a stronger

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Speaker 7: economy and stronger borders. We owe that to our children.

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Speaker 2: Bade Knox appeal to the party faithful comes as the

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Speaker 2: polls put Conservatives in fourth place. The historic full form

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Speaker 2: grace has led to many people questioning how long the

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Speaker 2: current leader can remain in her position. Those are some

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Speaker 2: of our global and top news stories this morning. In

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Speaker 2: terms of the markets, let's get to those. So the

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Speaker 2: dollar right now is weakening two tenths of one percent.

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Speaker 2: We've also seen gold pull back down one percent yesterday,

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Speaker 2: and the gold spot price is down two tenths this morning,

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Speaker 2: after of course hitting a record high above four thousand

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Speaker 2: dollars an ounce. But it's also oil that is edging

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Speaker 2: lower after the peace deal the first phase at least

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Speaker 2: of a peace deal in the Middle East bring crew

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Speaker 2: futures at the moment down four tenths at sixty six dollars.

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Speaker 2: The bow US benchmarks stock benchmarks that is closed at

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Speaker 2: yet another record. Yesterday, the Nasdak had its best session

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Speaker 2: in seven weeks. The AI boom still firmly in place.

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Speaker 2: Stop futures though this morning for the US a little

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Speaker 2: bit positive. We're up by bou to tenth of one percent,

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Speaker 2: less than a tenth of one percent for the S

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Speaker 2: and P five hundred USOX fifty futures though, are in

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Speaker 2: the red and this as we get got fed minutes yesterday,

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Speaker 2: caution over rate cuts because of the warriors around inflation, tenure,

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Speaker 2: treasure yield steady at four twelve. So those are the markets.

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Speaker 2: This hour in a moment will bring you more on

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Speaker 2: Macwol's plan to reappoint a new prime minister by tomorrow,

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Speaker 2: plus why the global AI boom hinges on ASML's huge

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Speaker 2: expansion in one small Dutch city. Now let's go to

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Speaker 2: our top story.

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Speaker 8: Though.

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Speaker 2: Israel and Hamas have agreed the terms for the release

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Speaker 2: of all hostages held by Hamas in Gaza. This is

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Speaker 2: part of a US and Katari broker deal to end

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Speaker 2: their two year war. Joining US now as Bloomberg. Stuart

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Speaker 2: Livingston Wallace, who heads our coverage of the Middle East

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Speaker 2: and North Africa. Stuart, good morning. What exactly has been

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Speaker 2: agreed in terms of Israeli hostages and troops and aid

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Speaker 2: for Palestinians and Palestinian prisoners.

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Speaker 8: Yes, I mean, as you said, it is very much

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Speaker 8: phase one, but it's a very significant change in the landscape,

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Speaker 8: you know, and certainly the most consequential agreement we've had

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Speaker 8: in months, arguably since the war began a couple of

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Speaker 8: years ago. So what seems to have been agreed to,

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Speaker 8: as you said, this exchange of the remaining hostages, both

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Speaker 8: those that are alive and those that are already deceased,

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Speaker 8: in return for a large number of Palestinian prisoners, and

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Speaker 8: based on Trump's truth social posts, there will also be

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Speaker 8: a withdrawal by Israeli troops and agreed uponline. Now the

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Speaker 8: fine details of that, I think are still to be agreed.

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Speaker 8: We anticipate that the Israeli Cabinet will be meeting later

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Speaker 8: today to sign off on this, and I think, you know,

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Speaker 8: one potential area of contention will be just who is

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Speaker 8: on the Palestinian prisoner list, because I know some of

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Speaker 8: the names that had been put forward earlier would be

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Speaker 8: would be very controversial as far as the israel Is concerned. However,

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Speaker 8: you know, I think there is great optimism from all

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Speaker 8: sides that they are making headway, and certainly, again based

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Speaker 8: on Trump's comments, he anticipates that the hostages would be

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Speaker 8: out probably on Monday. You know. Obviously will take some

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Speaker 8: time to create a safe corridor for them to come out,

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Speaker 8: and of course they will be we presume in different

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Speaker 8: locations and held by different groups within Gaza, so you know,

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Speaker 8: it will probably take some time to get done, but again,

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Speaker 8: a very very consequential change in the landscape.

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Speaker 2: Yeah. Indeed, and so President Trump speaking to Fox News

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Speaker 2: saying he is quote very confident there'll be peace in

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Speaker 2: the Middle East. I mean, could it be? Is this

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Speaker 2: what people think in the region? Could this be the

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Speaker 2: end of what has been a devastating conflict?

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Speaker 8: I mean, I think certainly, you know, in terms of Gaza,

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Speaker 8: the prospects for that are certainly looking a lot more

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Speaker 8: positive than they have done for a couple of years.

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Speaker 8: In terms of the wider Middle East, you know, there

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Speaker 8: are some more serious issues and far more widespread thinking,

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Speaker 8: particular about you know, Syria, Iraq, Iran, Lebanon, so on.

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Speaker 8: You know, those are very complex issues as well, but

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Speaker 8: specifically with regards to Gaza, at least on the face

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Speaker 8: of it, appears that we could potentially be moving into

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Speaker 8: a much more peaceful phase. But as you know, everyone knows,

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Speaker 8: there are a great many issues to resolve. They're not

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Speaker 8: least the reconstruction, the future governance, the disarmament of her mass.

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Speaker 8: You know, the list is very, very long, and it's

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Speaker 8: going to be a very difficult process to get done,

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Speaker 8: but this phase one certainly sets it on that path,

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Speaker 8: and I think there is good will from all sides

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Speaker 8: to try and get something done in the next several months.

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Speaker 2: What has been the reaction in the region, because we

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Speaker 2: mentioned that it's also a Katari broker deal, What has

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Speaker 2: been the response in the region to this sort of

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Speaker 2: first phase.

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Speaker 8: Again, I think very very pol you know, and there

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Speaker 8: has been a big push, certainly from the Arab states.

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Speaker 8: I mean noticeably cat Are being a very important mediator

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Speaker 8: in this, butan Egypt as well, the UAE, Saudi Arabia.

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Speaker 8: You know. The list is very long, and I think

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Speaker 8: to some extent, you know, the path that we saw

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Speaker 8: with the Abraham Abraham calls that were signed in Trom's

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Speaker 8: first term, I think it desires to return to that

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Speaker 8: as as kind of the path forward of some sort

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Speaker 8: of reconciliation and joint recognition and are more peaceful approach

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Speaker 8: to regional affairs. And I think that's largely based on

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Speaker 8: two things. One is, most of those states have very

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Speaker 8: ambitious goals in terms of transforming their economies away from

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Speaker 8: sort of being fossil fuel led to a far wider

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Speaker 8: industrial base, and they can't do that in an environment

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Speaker 8: where there is constant warfare, which is exactly what we're

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Speaker 8: seeing over the last couple of years, you know, very

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Speaker 8: widespread conflicts. So a great deal of optimism, I think

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Speaker 8: a great deal of hope that again this is the

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Speaker 8: start of something far wider, far more consequential for the

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Speaker 8: region and in terms of generating that prosperity that they're

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Speaker 8: all after.

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Speaker 2: Indeed, so potentially a very significant breakthrough in the Middle East. Stuart,

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Speaker 2: thank you so much for being with us. That is

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Speaker 2: boom Both Stuart Livingstone Wallace, who heads our coverage of

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Speaker 2: the Middle East, thank you so much for being with us.

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Speaker 2: Stay with us. More from Bloomberg DAYBAQUB coming up after this.

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Speaker 2: So also want to think about what's happening in France

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Speaker 2: and political term are there. There is now a new

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Speaker 2: deadline emmanue and macall says that he'll name a new

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Speaker 2: prime minister by tomorrow evening. That's after outgoing Premier Sebastie

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Speaker 2: Lacorneo signaled progress with other parties in two days of

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Speaker 2: last ditch talks, and our own Stephen Caroll is in

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Speaker 2: Paris for us this morning. Has been there for the

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Speaker 2: last few days, really keeping close tabs on this good

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Speaker 2: morning Stephen. Why is Mackwell waiting another forty eight hours

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Speaker 2: then to name his next prime minister.

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Speaker 9: Well, the key thing here is that Emmanuel mac krank

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Speaker 9: is going to name another Prime minister. That's the conclusion

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Speaker 9: that Sebastiana Corney was able to come to after two

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Speaker 9: days of these desperate negotiations with political parties, both allies

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Speaker 9: and opposition. Now, the message that he delivered in his

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Speaker 9: TV interview last night is that there was a majority

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Speaker 9: of MPs who don't want new elections to the National Assembly.

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Speaker 9: He also says he believes there is a platform of

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Speaker 9: stability those are the words he used, and a way

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Speaker 9: forward that could allow a budget to be passed by

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Speaker 9: the end of the year. So that means elections look

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Speaker 9: to be off the table for now. The President will

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Speaker 9: try again with another Prime minister to get a budget

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Speaker 9: agreed on the basis set by these talks. That would

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Speaker 9: be the sixth Prime minister in two years. As for

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Speaker 9: the timing, it does give to Alaniel Macron some time

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Speaker 9: to come up with someone to do this job, but

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Speaker 9: it also actually plays around a major event that's happening

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Speaker 9: in France here today there's a state ceremony to honor

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Speaker 9: the late Justice Minister Robert Madantere for his work on

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Speaker 9: civil liberties, including the abolition of the death penalty forty

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Speaker 9: four years ago. Today, that's a huge state of event

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Speaker 9: involving the president and they want to separate the politics

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Speaker 9: from that event happening today.

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Speaker 2: So who do you think it could be then to

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Speaker 2: be the next prime minister and what sort of budget

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Speaker 2: then would that person actually be able to pass?

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Speaker 3: Well.

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Speaker 9: Look, sebastohna corney was asked about this repeatedly last night.

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Speaker 9: He said that it was up to the president to decide.

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Speaker 9: He said that it shouldn't be anyone who has ambitions

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Speaker 9: for the presidential election in twenty twenty seven, pointing us

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Speaker 9: towards this idea of maybe a technocratic figure. That's something

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Speaker 9: that he says is a potential solutions. That's one option.

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Speaker 9: One thing we know is that it won't be sebastianna'corneyo.

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Speaker 9: He said that his mission is over as far as

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Speaker 9: he's considered, he does not want to be Prime Minister anymore.

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Speaker 9: As for the budget, La Courney says there will be

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Speaker 9: a plan presented on Monday that is in keeping with

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Speaker 9: the constitutional timetable. Now, he said that it won't be

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Speaker 9: a perfect plan. There'll be lots to debate, and he

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Speaker 9: again said the general agreement among parties is that the

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Speaker 9: deficit would be under five percent. That's something for markets

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Speaker 9: then to take heart from. But building a censors on

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Speaker 9: a budget now seems to be centering on the thorny

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Speaker 9: political issue of pension reform. Freezing the current changes that

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Speaker 9: raise the retirement age is a key demand of left

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Speaker 9: wing parties. It comes at a huge financial cast at

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Speaker 9: least three billion by twenty twenty seven, according to Lecornu.

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Speaker 9: He says that's an area for the next prime minister

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Speaker 9: to negotiates, but he said it will be a key challenge. Again,

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Speaker 9: he warned if there's no budget, he described it as

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Speaker 9: being absolutely dramatic consequences for France.

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Speaker 2: Stephen, thank you. Now, I want to get back to

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Speaker 2: the AI story. ASML is planning a major expansion in

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Speaker 2: Eindhoven in the next six months. Bloomberg's Amsterdam bureau chief

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Speaker 2: Dasher Afanasieva, is with us this morning. Good morning, Dasher,

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Speaker 2: what does ASML want to do in Eindhoven, Hello.

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Speaker 1: It wants to build a massive, a massive expansion site.

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Speaker 1: The total area is around one hundred hectors and there.

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Speaker 1: It wants to use the site to help it boost

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Speaker 1: production and to grow sales to as much as sixty

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Speaker 1: billion euros by twenty thirty.

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Speaker 3: Now.

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Speaker 1: A lot of those sales will be its most extreme,

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Speaker 1: most expensive, most advanced sophisticated extreme ultraviolet machines, which are

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Speaker 1: an integral part of the AI food chain because they

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Speaker 1: are have greater computational ability and are able to process

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Speaker 1: quicker and cheaper than other chips. And ASML is sort

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Speaker 1: of the bottleneck because it's the only company in the

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Speaker 1: world that makes these most advanced lithography machines to make

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Speaker 1: these chips.

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Speaker 2: So how are they going to deliver on that expansion.

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Speaker 2: It needs the support of government, of local people, workers, surely, absolutely.

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Speaker 1: The company has been wanting to do this for a while,

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Speaker 1: but it can't do it alone because the city and

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Speaker 1: oven is very densely populated, like a lot of the Netherlands,

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Speaker 1: there's already kind of a shortage of housing, a shortage

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Speaker 1: of skilled workers, so it really needs the support of

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Speaker 1: the whole kind of ecosystem and that's why the government,

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Speaker 1: both local and national, have dedicated around four point one

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Speaker 1: billion euros together. There's a bit from private companies in

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Speaker 1: there as well to drive this expansion, to improve housing,

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Speaker 1: to improve infrastructure, to improve education. But there's still so

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Speaker 1: much to do. For example, the area where ASML plants

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Speaker 1: to expand currently has no electricity, and as you can imagine,

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Speaker 1: that's that's quite crucial, and everything moves, you know, maybe

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Speaker 1: what feels for corporate like quite a slow pace because

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Speaker 1: you have to get all these approvals, you have to

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Speaker 1: get everybody on board, and whether Mayor of Eindoven told

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Speaker 1: us is what they don't want to do is to

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Speaker 1: kind of be rash about it and end up with

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Speaker 1: a silicon valley, which you know, in his opinion, is

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Speaker 1: a very unequal place to live and the only people

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Speaker 1: that can afford to live there are kind of very rich.

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Speaker 8: Hm.

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Speaker 2: That's interesting, But obviously it's massively important for AIRSML and

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Speaker 2: also for Europe, given it's the largest company by stock

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Speaker 2: market value in Europe.

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Speaker 1: It is the it is the largest company by stock

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Speaker 1: market value, and that reflects just what a bottleneck, what

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Speaker 1: sort of a lynch pin it is in this very

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Speaker 1: very complicated global chip making process, so we don't have

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Speaker 1: massive chip makers, but ASML is the most relevant thing

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Speaker 1: we've got, and they've you know, back into the two

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Speaker 1: thousands they made this euv bet and now they've invested

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Speaker 1: into an AI company, so it's very much front and

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Speaker 1: center of their mind.

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