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

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Speaker 2: This is the Bloomberg Daybak podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Tuesday, the seventh of

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Speaker 2: May here in London. I'm Caroline Hepkin and.

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Speaker 3: I'm Stephen Carroll. Coming up today.

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Speaker 4: UBS smashes past profit estimates in the first quarter as

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Speaker 4: it prepares to complete the Credit Suite merger this month.

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Speaker 2: Israel rejects a cease far proposal backed by her Mass

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Speaker 2: and vows to continue its military operation in Galza.

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Speaker 4: And change is good except when it isn't. Why moving

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Speaker 4: jobs doesn't always make you happier.

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

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Speaker 2: UBS has returned to profit after two quarters of losses,

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Speaker 2: but is warning of further costs from its integration of

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Speaker 2: Credit Suites. The Swiss banking giant reported first quarter net

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Speaker 2: income of almost one point eight billion dollars, three times

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Speaker 2: what analysts were expecting. The outpufore moments was driven by

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Speaker 2: its investment bank and wealth management divisions, but UBS is

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Speaker 2: expecting to book one point three billion dollars in expenses

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Speaker 2: linked to the Credit Suisse merger in the coming months.

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Speaker 2: The legal tie up with its former rival, is due

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Speaker 2: to be completed on the thirty first of May, and.

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Speaker 4: Just breaking earnings results this hour, BP reporting first quarter

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Speaker 4: adjusted net profit that missed expectations at two point seven

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Speaker 4: two billion dollars, so that some two hundred million dollars

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Speaker 4: less than had been expected. The company also announcing a

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Speaker 4: share buyback in the first quarter of one point seventy

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Speaker 4: five billion dollars.

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Speaker 2: Now to the Middle East, Israeli troops have taken control

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Speaker 2: of the main border crossing into Gaza, blocking aid trucks

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Speaker 2: and people entering from Egypt. The move comes a day

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Speaker 2: after Israel told residents in parts of Raffa to leave

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Speaker 2: ahead of a possible attack on the city. Israel's war

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Speaker 2: cabinet has unanimously rejected a Gaza ceasefire proposal backed by Hamas,

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Speaker 2: saying that it does not meet the country's necessary demands.

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Speaker 2: Jonathan Panikoff of the Atlantic Council's Middle East program says

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Speaker 2: that Prime Minister Benjamin Netanya, who is facing increasing pressure

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Speaker 2: from inside Israel.

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Speaker 5: Domestically, it's a real challenge. Hostage families and Israelis as

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Speaker 5: a whole have been calling for his temporary ceasefire for

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Speaker 5: months now that would bring another set of hostages. Pon

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Speaker 5: the November release of hostages seems like a lifetime ago,

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Speaker 5: and really there's an increasing pressure in Israel for Benjamin

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Speaker 5: DETTANYAHUO and the coalition to make progress on the hostages

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Speaker 5: being released.

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Speaker 2: Jonathan Panakoff's comments come as Israel said that it would

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Speaker 2: send a delegation to meet with mediators to exhaust the

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Speaker 2: possibility of reaching an agreement. It's understood that any deal

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Speaker 2: would include the release of Israeli hostages held in Gaza

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Speaker 2: in exchange for Palestinians detained in Israeli jails and a pause.

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Speaker 4: Infighter Seatingping has called on France to help prevent a

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Speaker 4: new Cold War. China's president told his French counterpart, and

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Speaker 4: Manuel Macron, that the two countries should be fostering closer

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Speaker 4: economic ties rather than decoupling. Bloomberg's chief North Asia correspondent

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Speaker 4: Steven Angel says this comes as the EU has been

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Speaker 4: more robust in its trade relations with China.

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Speaker 6: Clearly, he has a mission to offer the Europeans China's

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Speaker 6: economic benefits. The European Union is sort of aligning itself

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Speaker 6: more towards a US position. Towards China on trade on

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Speaker 6: a number of issues and potential tariffs on evs and

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Speaker 6: the like, and also, of course the security threat with

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Speaker 6: the war in Ukraine into its third year right now,

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Speaker 6: and that is at front and center.

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Speaker 4: Angel adds that China's no limits friendship with Russia has

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Speaker 4: stirred distrust in European capitals. Francis Macron responded to she,

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Speaker 4: saying that there cannot be security in Europe without security

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Speaker 4: in Ukraine.

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Speaker 2: Now on earning this morning, Aramco will pay thirty one

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Speaker 2: billion dollars in dividends to the Saudi government and other

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Speaker 2: investors despite lower profits. The world's biggest crude all exporter

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Speaker 2: made a first quarter profit of twenty seven and a

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Speaker 2: half billion dollars, but that missed estimates. Aramco's generous payouts

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Speaker 2: are becoming increasingly important for the Gulf state as all

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Speaker 2: prices remain below the levels that it needs to balance

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Speaker 2: its budget. The kingdom needs oil at around one hundred

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Speaker 2: and eight dollars about to balance the budget with which

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Speaker 2: is more than twenty dollars above the current trading price.

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Speaker 4: Richmond Federal Reserve President Thomas Barkin says the full impact

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Speaker 4: of high interest rates is yet to come. The voting

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Speaker 4: policymaker added he still expects to hit the central banks

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Speaker 4: two percent inflation target without further hikes. It comes as

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Speaker 4: the central bank speakers like New York Fed President John

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Speaker 4: Williams continue to signal caution over murky economic data.

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Speaker 7: Do we have the maximum employment and price to building goal?

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Speaker 7: From my perspective, see all the data and information speaks to.

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Speaker 3: All of that.

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Speaker 7: And really, you know, as the data come in, hopefully

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Speaker 7: we'll be moving in the direction we want to see

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Speaker 7: both on inflation in terms of restoring balance to the economy,

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Speaker 7: and then we'll make our decisions based on that.

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Speaker 3: John Williams speaking there.

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Speaker 4: Both Williams and Barkin joined other right setters and voting

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Speaker 4: unanimously to keep US rates at a two decade high

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Speaker 4: last week.

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Speaker 2: Now, the UKAI startup Wave has raised a billion dollars

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Speaker 2: in funding for its self driving technology. It's one of

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Speaker 2: the largest cash injections for a European AI venture on record.

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Speaker 2: In Vidio Softbak and Microsoft are three of the key

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Speaker 2: investors in Wave, which was founded by CEO Alex Kendall

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Speaker 2: in twenty seventeen. Although no valuation was disclosed, the company

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Speaker 2: says that it should be its last major funding around

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Speaker 2: as it starts to get profit from commercial deals.

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Speaker 4: And job seeker is looking for a happier work life

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Speaker 4: with a new employer may find the grass isn't always greener.

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Speaker 4: That's according to new research in the United States that

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Speaker 4: shows recent switchers are less satisfied.

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Speaker 3: Than those who stayed. Pot Bloomberg's Tea Adabio has the details.

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Speaker 8: Once a sure fire away to make workers happier, switching

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Speaker 8: jobs is now leaving them more miserable than before. A

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Speaker 8: survey from the US Conference Board found that in twenty

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Speaker 8: twenty two, recent hires had greater job satisfaction, but just

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Speaker 8: a year later that trend has reversed. Lucrative pandemic pay

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Speaker 8: bumps could be to blame for the change, encouraging job

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Speaker 8: hunters to ignore other factors like culture and training. Despite

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Speaker 8: the dip in new highest sentiment ratings for overall job

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Speaker 8: satisfaction are still at their highest since nineteen eighty seven.

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Speaker 8: In London, tiwa ad a Bio Bloomberg Radio.

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Speaker 4: In a moment, we will bring you our interview with

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Speaker 4: the UBS CEO, Sodio Ramati and also talk about the

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Speaker 4: latest developments in the Middle East. But another story that

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Speaker 4: cod aur I this morning now, Havier Blastom Bomberg opinion

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Speaker 4: is the person that you want to be reading if

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Speaker 4: you're worried about the cost of important goods going up.

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Speaker 4: He's our commodities experts. He flagged quite a long time

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Speaker 4: ago at the soaring cost of olive oil, very important

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Speaker 4: if you're a heavy consumer.

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Speaker 3: Now he's worried about coffee.

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Speaker 2: Yeah, this is also he has a lovely kind of

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Speaker 2: line about how his favorite breakfast foods are going up

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Speaker 2: in price because hea'ts bred with a dash of olive

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Speaker 2: oil and a coffee. Now, the issue is that there

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Speaker 2: is it's not just weather that is affecting. And we

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Speaker 2: have talked, for example about the sawing price of cocoa beans.

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Speaker 2: Again that's the kind of weather climate change related issue,

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Speaker 2: but it's also to do with the fact that China

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Speaker 2: is affecting the price and what growers actually plant, as

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Speaker 2: well as rather falling in love with coffee themselves and

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Speaker 2: so pushing up the price of Arabica and other coffee

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Speaker 2: blends that are so important in the West.

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Speaker 4: Yeah, definitely worth there is. If you've got time this

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Speaker 4: morning in China's need love of coffee is coming for yours.

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Speaker 4: Have of last's latest piece FM Bloomberg Opinion.

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Speaker 2: Now let's get more on our top story, the bumper

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Speaker 2: results from UBS these UK based lender return to profit

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Speaker 2: after two loss making quarters. The robust set of results

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Speaker 2: will be a boost for Sergio and Moti, the CEO,

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Speaker 2: as he grapples with a tightening regulatory outlook in Switzerland.

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Speaker 2: Sergio Motti has been speaking to our editor at large,

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Speaker 2: franc In Laqua, and Moti began by highlighting the strength

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Speaker 2: in the bank's recent performance.

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Speaker 9: First of all, we are making very good progress on

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Speaker 9: our integration plans, but also it was great to see

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Speaker 9: a very strong return to profitability both on a reported

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Speaker 9: basis but also very strong underlying profits. We also see

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Speaker 9: a good momentum with clients with inflows across our businesses,

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Speaker 9: and our capital is strong, so allowing us to continue

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Speaker 9: to pursue our capital return plans.

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Speaker 10: And also the investment bank was actually quite strong, better

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Speaker 10: than expected. Again, what does it tell you about what

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Speaker 10: you can see in the future. Is it a one

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Speaker 10: off or actually is a path ahead better?

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Speaker 9: Actually, it's a good momentum. You may remember in the

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Speaker 9: four quarter. We also had a very strong performance in banking.

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Speaker 9: As we integrate a new colleagues from Credit Switch on

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Speaker 9: our platform, we start to see the pipeline developing we

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Speaker 9: are able to execute and so it's very much aligned

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Speaker 9: with our expectations of improving the mix between our markets

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Speaker 9: business and our banking business in the investment bank.

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Speaker 10: So in the investment bank where you see the biggest

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Speaker 10: strength and know we also heard about possible job losses

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Speaker 10: in Asia. Is Asia at the moment weaker than, for example,

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Speaker 10: parts of the US and investment bank.

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Speaker 9: No, I think that we reinforced our franchises globally. I

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Speaker 9: think that, of course, we are still going through across

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Speaker 9: the entire bank. We are still a lot of work

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Speaker 9: to be done to res structure the businesses and to

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Speaker 9: bring them back into even stronger profitability. So I think

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Speaker 9: that is a good momentum. We achieve almost a ten

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Speaker 9: percent return on CT one, which is still a third

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Speaker 9: or fifty percent away from our final targets, so still

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Speaker 9: work to be done. We always say that twenty twenty

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Speaker 9: four is an important year, and as we now approach

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Speaker 9: the end of May, we're going to execute on our

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Speaker 9: legal entity mergers which allow us to unlock in the

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Speaker 9: future further cost settings.

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Speaker 10: An important year twenty twenty four because it's also more

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Speaker 10: difficult year to twenty twenty three.

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Speaker 3: No, because is the.

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Speaker 9: More First of all, we have two huge milestones, the

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Speaker 9: merger of our legal entities and the second one we

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Speaker 9: start to do the migration of clients from the credit

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Speaker 9: switch platforms into the UBS platforms. So this is very technical,

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Speaker 9: still requires a lot of support and.

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Speaker 3: People to do that.

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Speaker 9: But as we start to do that, we can unlock

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Speaker 9: some cost savings, but also unlock capital savings, funding savings,

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Speaker 9: and therefore you know, achieving our final targets to achieve

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Speaker 9: thirteen billions of savings by the end of twenty twenty

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Speaker 9: six forty this year we do expect half of that

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Speaker 9: being achieved, so six and a half billions.

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Speaker 10: So when you look at global wealth, I mean the

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Speaker 10: outlook talks about interest rate cuts. Again, how do you

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Speaker 10: worry about you know, things that are outside.

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Speaker 9: Your control, well, things that are side our control. You know,

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Speaker 9: we always need to wonder what can happen on the

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Speaker 9: geopolitical front, what can happen on any sudden change in

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Speaker 9: the macroeconomic pictures. So I think that we do indeed

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Speaker 9: a factor in our outlook for NII. For example, three

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Speaker 9: rate cuts in the US, two rate cuts in Switzerland.

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Speaker 9: This can change. If it changes, may be beneficiary to

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Speaker 9: our NII, but maybe the underlying macroeconomic event is not

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Speaker 9: so positive. So you know, we need to always assess well,

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Speaker 9: we are prepared for any scenario. We stay focused one

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Speaker 9: on our plan, but also we have you know, a

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Speaker 9: balance sheet for old seasons, allowing us to really manage

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Speaker 9: any unexpected event.

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Speaker 10: So when you look at market volatility, it's a little

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Speaker 10: bit unusual to see this much market volatility or even

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Speaker 10: pricing on the fact. How do you describe the.

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Speaker 9: Markets, Well, it's a kind of market volatility around bonds

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Speaker 9: and ten years. But if I look on effects, I

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Speaker 9: look at equities and many other anset classes, the volatility

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Speaker 9: is not there is more subdued. We saw more client

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Speaker 9: and activity, but let's not forget that there is a

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Speaker 9: little bit of seasonality factor in the first quarter. So

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Speaker 9: we need to really see how in the next quarter

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Speaker 9: things are going to play out. We have to remember

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Speaker 9: that we are still facing in the in the in

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Speaker 9: the foreseeable future, big elections coming, and how this is

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Speaker 9: going to then play out into the sentiment of clients.

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Speaker 10: Still still open, and that will be very regionally. Again,

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Speaker 10: if you look at pipelines, did you see a difference.

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Speaker 9: Yeah, very origionally, but you know nowadays things in every

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Speaker 9: region can affect others, so I think that things are

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Speaker 9: quite fluid.

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Speaker 10: Is Europe weaker than the rest of the world, Well,

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Speaker 10: Europe is.

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Speaker 3: Still not growing.

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Speaker 9: If I look at our businesses, of course, it's still

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Speaker 9: somehow clear that the real growth is mainly driven by

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Speaker 9: the US and in Asia. I'm also very pleased with

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Speaker 9: our performance in Switzerland, but when I look at Europe

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Speaker 9: in general, it's still not so constructive.

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Speaker 2: So that was the UPS Group CEO Searge and mostly

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Speaker 2: that's wee into Bloombogs Francine Laqua. Of course, the Swiss

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Speaker 2: authorities warm systematically important banks to hold more capital. That's

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Speaker 2: one major issue. In terms of the tea live blog

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Speaker 2: that is live on the Bloomberg Tumil, you can follow

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Speaker 2: all of our experts speaking about the UBS results. Now,

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Speaker 2: jan Patrick Barnett, a senior reporter, talking about UBS shares

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Speaker 2: indicated higher three percent this morning, so that on one

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Speaker 2: of our key earning stories.

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Speaker 4: Well, let's turn two events in the Middle East. Next,

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Speaker 4: and Israeli troops have taken control of the Rafa border

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Speaker 4: crossing area in Gazo, with Hama saying that all aid

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Speaker 4: flows from Egypt saying have stopped.

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Speaker 3: It's the latest development.

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Speaker 4: Is Hamas and Israel been negotiating via cut Our Egypt

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Speaker 4: and the US on a ceasefire, hostage and prison and

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Speaker 4: agreement for weeks. Now joining us with more is Our

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Speaker 4: EMEA Ands director rasalind Mathis and Raz Good morning to you.

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Speaker 4: First of all, what do we know about what's been

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Speaker 4: happening at Rafa this morning and how significant is it?

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Speaker 1: Well, what we know is that there were actually strikes

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Speaker 1: in the Rafa area by Israel air strikes overnight and

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Speaker 1: then today we've got news that troops have moved into

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Speaker 1: the Rougher crossing area and that's the first time since

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Speaker 1: the war broke out since Hermas attacked Israel back in October,

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Speaker 1: and they've secured that crossing and they've blocked it off

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Speaker 1: and so that means that no aid at all people

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Speaker 1: can move back and forth between that and that is

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Speaker 1: the conduit between Egypt and Gaza and has been a

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Speaker 1: major port of operation for aid to go into Gaza

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Speaker 1: in recent months. It's not the only crossing into Gaza,

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Speaker 1: but there's only a few, and you know, they've been

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Speaker 1: pretty troubled throughout and so it's really going to raise

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Speaker 1: questions about the flow of aid into Gaza. It also

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Speaker 1: points to the fact that Israel is very determined to

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Speaker 1: push ahead with some sort of offensive in Rufa, whether

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Speaker 1: that's within weeks or days or whatever. They're making preparations

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Speaker 1: for it, and so they're picking up their activity there

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Speaker 1: and that's really a sign that despite the talks that

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Speaker 1: are still going to go on towards the ceasefire, that

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Speaker 1: Israel sees its primary goal as going to rough for

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Speaker 1: at some point.

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Speaker 2: Yeah, absolutely, those negotiations expected to continue today. What do

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Speaker 2: we know about the cease far proposal and a possible deal,

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Speaker 2: you know, talks of Hamas backing a deal and a

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Speaker 2: rebuttal from Israel.

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Speaker 1: Well we know that Hamas that accepted the deal that

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Speaker 1: was proposed by cut Her and Egypt, of course facilitated

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Speaker 1: also by the US, and Israel says that's not good enough.

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Speaker 1: And it seems to be a continuation of disagreement over

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Speaker 1: felling minor wording in the end, but it's really about

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Speaker 1: what this deal might mean in terms of setting the

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Speaker 1: pathway for a full end to the war. A Hamas

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Speaker 1: wants it to be a pathway to an end to

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Speaker 1: the war. Israel wants to prevaricate on that because they

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Speaker 1: want to have the option to keep fighting if needed,

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Speaker 1: And it's really about the language that that might bake

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Speaker 1: in to that.

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Speaker 3: Agreement at this point.

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Speaker 1: I mean, Israel says they will show up for further talks,

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Speaker 1: but they've also said that's going to be on the

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Speaker 1: same track as they continue their preparations for Rafa, and

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Speaker 1: so for the US in Europe and cut Her in

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Speaker 1: Egypt and others. It's really about a matter of time,

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Speaker 1: the race the clock here to try and get a

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Speaker 1: deal sealed on before Israel does proceed with Ruffa.

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Speaker 4: How much of a risk is this for Israel in

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Speaker 4: terms of attention Nasha relationships, because of the pressure that

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Speaker 4: they've been facing from their allies like the US to

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Speaker 4: not go ahead with this, the fans.

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Speaker 1: Of in Rauffa, well, there is that incredible pressure on Israel.

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Speaker 1: But as also have we seen throughout You've seen Benjamin Netanyahu,

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Speaker 1: you've seen other members of the leadership, the war Cabinet

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Speaker 1: and so on, really saying they're undeterred because they see

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Speaker 1: their goals as being ultimately two things. One is to

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Speaker 1: try and get the release of the remaining Israeli hostages.

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Speaker 1: But also they don't want to be in a position

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Speaker 1: where they feel vulnerable to Hamas again, and that's a

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Speaker 1: really existential thing for Israel. And so despite the many

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Speaker 1: phone calls again a phone call yesterday yet again with

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Speaker 1: the US President Joe Biden and Israeli Prime Minister Benjamin Netanyahu,

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Speaker 1: where Joe Biden said, if you go into Rafa, it's

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Speaker 1: a full offensive with civilians at stake. That's a mistake,

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Speaker 1: he said to him, those words, it is quote. But

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Speaker 1: the rhetoric from Israel doesn't change, and that again because

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Speaker 1: they see it as fundamental. Of course, there has been

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Speaker 1: a hard tack to the right in politics, so Benjamin

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Speaker 1: Netnio is bound a bit by members of his own,

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Speaker 1: you know, in a circle, who are pushing him on

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Speaker 1: this front. But the reality is also is that despite

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Speaker 1: all the retoric, the US is not going to stop

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Speaker 1: sending weapons to Israel. They've made clear they want to

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Speaker 1: support Israel militarily, and so the leverage the US has

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Speaker 1: and others have in Europe and elsewhere, is arguably limited.

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Speaker 4: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 4: stories making news from London to Wall Street and beyond.

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Speaker 4: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

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Speaker 2: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carol.

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Speaker 4: Join us again tomorrow morning for all the news you

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Speaker 4: need to start your day right here on Bloomberg Daybreak

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Speaker 4: Europe