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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Daybacurate podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Tuesday, the sixteenth of April in London.

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Speaker 1: I'm Caroline Hepka.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Military officials in

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Speaker 2: Israel vowed to strike back against Iran as allies are

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Speaker 2: a restraint.

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Speaker 1: China's growth beats expectations, but a strong start to the

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Speaker 1: year is already fading.

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Speaker 2: Plus, the UK announces plans to criminalize the creation of

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Speaker 2: intimate deep fake images, but how easy will it be

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Speaker 2: to enforce.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Israel's top military commander says the country has no choice

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Speaker 2: but to hit back after Iran's weekend drone and missile attack.

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Speaker 2: In a speech to troops at the airbase, which was

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Speaker 2: targeted on Saturday nights at Strike, Herzy Halev said the

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Speaker 2: missiles fired into Israel will be met with a response.

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Speaker 2: His comments come as US and European officials have boosted

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Speaker 2: their calls to avoid an escalation. Is what UK Prime

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Speaker 2: Minister Ishi Sunak tell the House of Commons.

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Speaker 3: We are working urgently with our allies to de escalate

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Speaker 3: the situation and prevent further bloodshed. We want to see

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Speaker 3: karma heads prevail, and we are directing all our diplomatic

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Speaker 3: efforts to that end. Yesterday I spoke to my fellow

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Speaker 3: G seven leaders. We are united in our condemnation of

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Speaker 3: this attack. We discussed further potential diplomatic measures which we

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Speaker 3: will be working together to coordinate in the coming days.

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Speaker 3: I will also shortly be speaking to Prime Minister Netanyahoo

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Speaker 3: to express our solidarity with Israel in the face of

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Speaker 3: this attack and to discuss how we can prevent further

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Speaker 3: escalation soon.

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Speaker 2: Next comments Echo, there was a French President, Emmanuel Macron,

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Speaker 2: who says France will do everything it can to avoid

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Speaker 2: flare ups. Meanwhile, around Deputy Foreign Minister vowed to counter

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Speaker 2: any Israeli attack with a more severe, faster, and more

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Speaker 2: immediate blas in.

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Speaker 1: The United States. Events in the Middle East mean a

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Speaker 1: month's long Republican blockade of military aid for key allies

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Speaker 1: could be about to end, but getting a bill over

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Speaker 1: the line still isn't a done deal. As Bloomberg's head

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Speaker 1: backs to reports.

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Speaker 4: Speaker Mike Johnson is planning separate votes this week on

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Speaker 4: new aid to both Israel and Ukraine. This in an

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Speaker 4: attempt to assemble fragile coalitions to speed weaponry to both places.

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Speaker 5: We have terrorist in tyrants and terrible leaders around the world.

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Speaker 2: Like Putin and g and in Iran, and they're watching

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Speaker 2: to see if America will stand up for its allies

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Speaker 2: and in our own interest around the globe, and we will.

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Speaker 4: Now, his party majority is very slim, and he may

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Speaker 4: need Democrat support, and he very well may get it.

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Speaker 4: The mpasse over eight has been dragging on since October

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Speaker 4: ed Baxter Bloomberg Radio.

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Speaker 2: China's economy grew faster than expected in the first three

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Speaker 2: months of twenty twenty four, with GDP climbing five point

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Speaker 2: three percent from a year earlier, but the surprisingly strong

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Speaker 2: numbers were offset by industrial production and retail sales figures

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Speaker 2: for March that were weaker than forecast. Blackrocks Vice chairman

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Speaker 2: Philip Hildebrand says one strong print doesn't affect underlying issues

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Speaker 2: over time.

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Speaker 6: The challenge is going to be this domestic demand problem

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Speaker 6: and of course the fact that China is really in deflation.

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Speaker 6: So these are big challenges. And then when you look

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Speaker 6: Further down the line you look at population growth and

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Speaker 6: so forth, you know, you really see growth declining on

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Speaker 6: a structural basis, and that's going to be a challenge

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Speaker 6: going forward. So I'd say this as roughly as expected

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Speaker 6: with this big caveat around domestic demand.

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Speaker 2: Philip Helderbrand added many of these challenges are far from

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Speaker 2: unique to China and reflect the state of the global economy.

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Speaker 2: The offshore you on held losses having dipped earlier after

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Speaker 2: the week PBOC fixing.

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Speaker 1: Now the European Union is launching a fleet of trade

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Speaker 1: investigations into China, saying that it has been played for years.

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Speaker 1: The block is threatening tariffs on electric vehicles and investigating

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Speaker 1: potentially illegal Chinese support for wind, solar, rail and the

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Speaker 1: medical sectors. Our Greater China editor John lu says it's timing.

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Speaker 1: Alongside German leader Earla Schultz's visit to Beijing is.

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Speaker 7: Clear exports is something Beijing is hoping will be a

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Speaker 7: pillar that it can depend on to get the economy

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Speaker 7: going again. That's not going to work if tariffs are

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Speaker 7: being put in place in Europe.

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Speaker 1: New ads that Schultz and she meet earlier met earlier

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Speaker 1: today and that the German leader had said that trade

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Speaker 1: would be top of the agenda. Beijing has dismissed charges

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Speaker 1: that the rapid growth of its ev industry was due

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Speaker 1: to government's subsidies as groundless, instead pointing to its innovation prowess.

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Speaker 2: The New York FAD president John Williams still expects the

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Speaker 2: Central Bank to cut interest rates this year. His comments

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Speaker 2: come as a key US inflation measure rose by more

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Speaker 2: than expected in March, prompting traders to scale ail back

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Speaker 2: bets on cutts. In twenty twenty four, in an exclusive

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Speaker 2: interview with Bloomberg, John Williams said he expects rate reductions

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Speaker 2: this year as inflation continues to gradually come down.

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Speaker 8: I think Marty policy is working at the rates that

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Speaker 8: we have now, so I think I think Marte policy

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Speaker 8: is in a good place. We will need a start

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Speaker 8: a process at some point to bring interest rates back

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Speaker 8: to more normal levels, and my own view is that, well,

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Speaker 8: you know that process will likely start this year, but

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Speaker 8: again it's going to be driven driven by the data

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Speaker 8: in achieving our goals.

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Speaker 2: Speaking to Bloomberg's Mike McKee, Williams also pointed to strong

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Speaker 2: consumer spending as evidence of the country's economic strength. His

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Speaker 2: comments are somewhat at odds with those of fellow voting

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Speaker 2: member Mary Daily, who says there's no urgency to alter

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Speaker 2: interest rates.

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Speaker 1: Analyst had expected Goldman Sachs's first quarter profit to drop. Instead,

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Speaker 1: net income rose by twenty eight percent, the impressive showing

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Speaker 1: BOOS CEO David Solomon, who had faced a chorus of

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Speaker 1: criticism about his leadership.

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Speaker 9: We feel very good about our first quarter results, which

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Speaker 9: reflect the strength of our world class and interconnected franchises

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Speaker 9: and the earnings power of our firm. This performance was

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Speaker 9: aided by the swift actions we took last year to

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Speaker 9: narrow our strategic focus and played our core strengths.

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Speaker 1: Solomon also echoed other US finance CEO's caution about the

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Speaker 1: stock market's record highs in spite of major global headwinds.

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Speaker 1: Gomm Sax's shares rose as much as six percent, the

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Speaker 1: most intra day since December, before pairing some of those gains.

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Speaker 2: The UK government is cracking down on explicit deep fake

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Speaker 2: images online. It's part of a set of reforms aimed

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Speaker 2: at preventing violence against women. Poomberg's Tea out of Bio

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Speaker 2: has the details.

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Speaker 10: Creating and sharing sexually explicit AI generated images could now

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Speaker 10: be punishable with jail time in the UK. That's according

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Speaker 10: to the Ministry of Justice, who aiming to stem the

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Speaker 10: rise of deep fake pictures and videos made possible by

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Speaker 10: rapidly developing technology. A potential new law will mean creating

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Speaker 10: such deep fakes without consent, even if the images are

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Speaker 10: not shared, could mean prosecution, an unlimited fine or prison.

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Speaker 10: People familiar with the matter say the government is also

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Speaker 10: planning talks with big tech giants like Apple and Meta

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Speaker 10: to persuade them to sign a voluntary charter granting parents

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Speaker 10: more control over their teen's social media use. In London,

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Speaker 10: Tea added Bayo Bloomberg Radio.

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Speaker 1: And those are our top stories this morning. On the

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Speaker 1: markets this hour, the MISI Asia Pacific index is currently

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Speaker 1: down one point eight percent, US SOX fifty futures also

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Speaker 1: dropping one point two percent, and ten year US treasury

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Speaker 1: yields fairly steady at four point sixty one percent this morning.

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Speaker 2: In a moment, we'll get the latest on the tensions

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Speaker 2: in the Middle East, plus some analysis of those Chinese

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Speaker 2: economic figures out this morning. But another story that caught

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Speaker 2: our eye today, Alfa Romeo has been forced to change

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Speaker 2: the names of one of its cars after it annoyed

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Speaker 2: the Italian government. So the suv was originally named Milano,

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Speaker 2: but last week the Industry Minister head out at the

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Speaker 2: CEO of Stillants, which owns the brand, for using the

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Speaker 2: name because the car is made in Poland. As a result,

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Speaker 2: CEO Carlistavirus has said the car is going to be

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Speaker 2: renamed Junior. He said they worked over the weekend to

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Speaker 2: change the name. He said it's a signal of appeasement

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Speaker 2: as they have a big library of names. But it's

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Speaker 2: been an issue that the company's been facing criticism over

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Speaker 2: because they have been moving jobs abroad, essentially to lower

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Speaker 2: production sites.

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Speaker 1: And if you frustrate the unions and it becomes a

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Speaker 1: sort of political issue, then I mean that's the trouble,

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Speaker 1: isn't it, Because Italian workers have been striking because of

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Speaker 1: the loss of jobs. So yes, amazing what is in

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Speaker 1: a name and how frustrating it can be to politicians they.

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Speaker 2: Said no to Milano. Anyway, More on that story you'll

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Speaker 2: find on Bloomberg to Common on the terminal, But let's

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Speaker 2: go back to our top story now. In Israeli is

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Speaker 2: still weighing its options on how to respond to around

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Speaker 2: weekend drone and missile attack. European and US leaders have

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Speaker 2: called for restraint, but Israeli military officials say the country

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Speaker 2: has no choice but to respond. Our Meadileas Breaking News

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Speaker 2: editor Patrick Sykes is with us for more. Patrick, what

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Speaker 2: do we know about the options that are under consideration

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Speaker 2: by Israel morning?

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Speaker 5: Yes, the Israeli War Cabinet met for a second day yesterday,

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Speaker 5: but there's still no final position yet. Israeli official saying

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Speaker 5: at least publicly that, as you say, they have no

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Speaker 5: choice to respond, but keeping relatively quiet on the specific options.

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Speaker 5: They're also pointing out their respond at a time of

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Speaker 5: their choosing. I think we can think about the sort

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Speaker 5: of range of options on their table from the least

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Speaker 5: escalatory right through to the most as being you know,

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Speaker 5: on the former side of the spectrum, a direct strike

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Speaker 5: on something related to the Iranian weekend strike which involved

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Speaker 5: missiles and drones, through to obviously Iran's nuclear program, are

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Speaker 5: much more much longer term, longer term thorn in Israel.

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Speaker 5: Israel's side and something that it sees as an extential threat.

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Speaker 5: The closer we are to the lower end of that spectrum,

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Speaker 5: I think the greater the chances that this either ends

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Speaker 5: there or fizzles out, the great the further we are

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Speaker 5: to the latter. I think the in term we're going

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Speaker 5: to see Iran also feel that it needs to respond,

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Speaker 5: and so it continues.

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Speaker 1: Yeah, and so there have also been a lot of

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Speaker 1: calls for restraint from Israel's allies, and perhaps that is weighing. Then,

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Speaker 1: given you know that the deliberations and how difficult they are,

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Speaker 1: is there any sign that the calls around restraint are

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Speaker 1: weighing on the decision making weighing on Benjamin at Niau, I.

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Speaker 5: Think only in an absence we could say. Really the

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Speaker 5: only sign of that is that Netta, who's personal term

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Speaker 5: on this has been relatively more measured compared with some

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Speaker 5: of the right wing parts of his cabinet. One cabinet

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Speaker 5: member yesterday said Israel should go berserk as a deterrance

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Speaker 5: to Iran from doing future strikes like that of last weekend.

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Speaker 5: I think the odd thing here is it's kind of

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Speaker 5: parallel with the Iranian position of a few weeks ago,

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Speaker 5: right when they were considering how to respond to this

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Speaker 5: suspected Israeli attack on their consulate in Damascus, where you

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Speaker 5: had parts of the government, the regime officials, saying that

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Speaker 5: we need to act right away, we need to be

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Speaker 5: really aggressive, and then others saying, hang on, we need

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Speaker 5: to show restraint, we need to think about this more strategically.

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Speaker 5: So I think, in an odd parallel way, the fate

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Speaker 5: of the whole issue is going to depend on which

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Speaker 5: side of those cabinets and power dynamics went out.

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Speaker 2: Padrick, what's the latest that we've heard from Iran on this?

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Speaker 2: What are they preparing for?

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Speaker 5: Yeah, their message is and it has been from the start, really,

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Speaker 5: it has been one of the Terrans saying they're very

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Speaker 5: keen to frame what they did as a one off,

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Speaker 5: not as a start of a broader conflict. They say

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Speaker 5: they're not looking for a broader conflict. They also frame

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Speaker 5: what they did as an act of self defense, as

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Speaker 5: I said, in reaction to that strike on the consulate,

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Speaker 5: But they are at the same time given this veiled

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Speaker 5: threat that if Israel does respond, then we will we

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Speaker 5: will be forced to do so ourselves as well. And

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Speaker 5: obviously it's that Shane reaction risk that's the real risk here,

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Speaker 5: rather than I think any individual strike we had the

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Speaker 5: Uranian deputy Foreign Minister overnight, saying that they would counter

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Speaker 5: any Israeli attack with a quote more severe, faster and

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Speaker 5: more immediate blow. So, you know, rather than the last time,

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Speaker 5: where Iran waited I think around twelve days not quite

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Speaker 5: two weeks before undertaking its attack, He's given the impression,

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Speaker 5: you know, with each retaliation, the gaps between them are

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Speaker 5: going to get strong, going to get shorter, and the

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Speaker 5: gravity of them is only going to get greater.

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Speaker 1: That's the risk, Okay, indeed the risk. Patrick, Thank you

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Speaker 1: so much for being with us. Patrick Sykes is our

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Speaker 1: Middle East Breaking News editor.

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Speaker 2: To China next, where the economy grew more than expected

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Speaker 2: in the first three months of the year, growth boosted

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Speaker 2: by the industrial sector, but there were signs of weakness

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Speaker 2: emerging in March. Our Asia Economics correspondent Katia Dimitrieva joins

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Speaker 2: us now for more. Katy, are great to have you on.

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Speaker 2: What's the good news? First of all in these numbers, well, we.

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Speaker 11: Can talk about factories. I think that was the one

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Speaker 11: piece of very good, very strong news in the GDP report.

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Speaker 11: Of course, growth coming in higher than any economist had forecast,

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Speaker 11: and it was really led by this portion of GDP,

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Speaker 11: which is secondary market so secondary industry is you could

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Speaker 11: think of that as factories and exports. We kind of

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Speaker 11: knew that's story going into these numbers because of the

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Speaker 11: strong exports growth in the first two months of the year,

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Speaker 11: but already kind of sizzling in fizzling rather in March.

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Speaker 11: You look outside of manufacturing, though, and there isn't really

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Speaker 11: much to be very happy about in the economy consumer side.

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Speaker 11: It was particularly weak when it came to retail sales,

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Speaker 11: real estate market also sales and prices declining further. And

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Speaker 11: even on the headline GDP, you know, we look at

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Speaker 11: the effect of deflation, the effect of prices kind of

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Speaker 11: being lower in the past few quarters, and the GDP

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Speaker 11: deflator actually was below zero again for another quarter. So

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Speaker 11: this is all around. You know. The headline number is good,

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Speaker 11: Factories are strong, Manufacturing demand abroad is strong, particularly in

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Speaker 11: the US, but there are so many other, so many

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Speaker 11: other headwinds this year for China.

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Speaker 1: Yeah, absolutely, so maybe the on some thin ice. The

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Speaker 1: other issue the German chance that Olaf Schultz has met

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Speaker 1: with the Chinese president she after issuing this warning about

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Speaker 1: over capacity and the treatment of foreign firms. It comes

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Speaker 1: as the EUS also launching all of these investigations into China.

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Speaker 1: It was Margareta Vesiga who talked about, you know, the

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Speaker 1: EU being played and that teaches you a lesson. I mean,

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Speaker 1: that's quite change in tone by Europe towards China.

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Speaker 11: Yeah, and these two things are in fact connected. When

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Speaker 11: you have an economy like China that's already under a

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Speaker 11: lot of pressure from the West, both the US and

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Speaker 11: Europe to stop this kind of you know, they say

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Speaker 11: over capacity issue, but what that really means is that

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Speaker 11: Western nations are concerned about dumping about China kind of

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Speaker 11: inflating by helping local companies, domestic companies over foreign companies,

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Speaker 11: kind of lower their prices and export the goods into

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Speaker 11: markets where they're going to be competing with the US

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Speaker 11: and with the European companies. And so if you have

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Speaker 11: an economy that's driven largely by that, and that's really

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Speaker 11: the one leg on the three leg stool, if you

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Speaker 11: want to say, that's going to be supporting the economy

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Speaker 11: throughout the year. Of course these other countries are going

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Speaker 11: to be. Their ears are kind of perking up right now,

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Speaker 11: probably when they saw this data and thinking, okay, what

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Speaker 11: does this mean for the rest of the year. This

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Speaker 11: is something that US Treasury Secretary Jennet Yellen also mentioned,

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Speaker 11: as my colleague Eric Martin reported very same issue will

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Speaker 11: be coming up the IMF meetings.

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