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

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Speaker 1: Day BAC podcast, available every morning on Apples, Spotify or

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Speaker 1: wherever you listen. It's Friday, the thirteenth of December in London.

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Speaker 1: I'm Caroline Hepka and.

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Speaker 2: I'm Stephen Carroll. Coming up today, Emmanuel Macrar is set

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Speaker 2: to name a new French prime minister today after missing

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Speaker 2: his self imposed deadline.

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Speaker 1: European Central Bank policymakers are said to be planning more

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Speaker 1: interest rate cuts in January and March as economic growth

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Speaker 1: remains sluggish.

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Speaker 2: Plus Klarner has stopped all hiring and cut its headcount

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Speaker 2: by more than twenty percent using AI.

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

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Speaker 2: Emmanuel Macron missed his self and post deadline to replace

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Speaker 2: Michel Bagnier, whose government was ousted in a no confidence

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Speaker 2: vote after just three months and the job. The European

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Speaker 2: Union's second largest economy is reeling from political instability. Without

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Speaker 2: a budget agreed for twenty twenty five.

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Speaker 1: The European cent Bank cut interest rates for the third

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Speaker 1: strate meeting and signaled more reductions are coming. Bluebakers learned

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Speaker 1: the policymakers expect to cut interest rates by another quarter

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Speaker 1: point in January and probably also in March. The Central

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Speaker 1: Banks President Christina Guard painted a gloomy picture though of

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Speaker 1: the Block's economy.

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Speaker 3: The latest information suggests it is losing momentum. So viz

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Speaker 3: indicate that manufacturing is still contracting and growth in services

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Speaker 3: is slowing. Firms are holding back the investment spending in

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Speaker 3: the face of weak demand and a highly uncertain outlook.

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Speaker 3: Exports are also weak, with some European industries finding it

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Speaker 3: challenging to remain competitive.

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Speaker 1: Reguard speaking there to the press after taking the deposit

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Speaker 1: rate down to three percent, the Central bank chief also

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Speaker 1: warned of dangers from coming from global trade frictions. PIMCO

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Speaker 1: and Fidelity are among investors who say the darkening economic outlook, though,

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Speaker 1: may force the ECB to cut more than unexpected.

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Speaker 2: UK households are avoiding buying big items like furniture and

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Speaker 2: electronics ahead of Christmas as they remain gloomy about the

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Speaker 2: economic outlook. Research firm GfK says consumers are hesitant because

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Speaker 2: of the uncharitable view on the UK's general economic situation,

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Speaker 2: with their sentiment index rising one point in December to

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Speaker 2: minus seventeen. The findings are a further blow to retail

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Speaker 2: and hospitality companies, which are basing for bracing for challenging

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Speaker 2: trading during their most crucial period of the year.

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Speaker 1: Russia is nearing a deal with Syria's new leadership to

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Speaker 1: maintain military basis in the country. Bloomberg understands that talks

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Speaker 1: are taking place for Russian forces to remain at the

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Speaker 1: naval port of Tatus and an airbase close to the

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Speaker 1: Turkish border. The Russian Defense Ministry believes that it has

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Speaker 1: an informal understanding with Hayeta al sham Hts to stay

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Speaker 1: at the Syrian basis, but the situation could still change

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Speaker 1: amid instability. US Sector of State Anthony Blincoln says that

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Speaker 1: America is working to ensure security in the region.

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Speaker 4: We're also going to be very focused on preventing any

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Speaker 4: actor inside or outside the country from putting there now

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Speaker 4: self interests ahead of the interests of the Syrian people,

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Speaker 4: especially in this delicate moment, and that includes, of course, Isis,

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Speaker 4: which no doubt will seek to regroup, and I think,

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Speaker 4: as we've demonstrated, the United States is determined to prevent

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Speaker 4: that from happening.

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Speaker 1: Anthony Blincoln speaking there from Jordan. The international community has

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Speaker 1: expressed interest in maintaining the status quare in serious, seeing

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Speaker 1: the Russian bases as a deterrent to extremism in the country.

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Speaker 2: Clarna says it stopped all hiring a year ago to

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Speaker 2: replace workers with artificial intelligence. The CEO has told Bloomberg

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Speaker 2: that the buy now, pay later provider is using the

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Speaker 2: technology to increase efficiency, resulting in a twenty two percent

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Speaker 2: decrease in headcount.

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Speaker 5: In our company by now. With the three thousand and five,

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Speaker 5: I would say it's a core group of two hundred

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Speaker 5: people who have really learned how to apply it practically,

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Speaker 5: to really deploy it to different purposes for automation improvements,

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Speaker 5: generating images, generating videos, product development, cursor for engineering like

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Speaker 5: there's an endless right now, opportunities to deploy it for

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Speaker 5: for moving faster accelerate the business.

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Speaker 2: Clarina CEO Sebastian simiat Kowski, speaking there, He also said

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Speaker 2: remaining employees seek we'll see a portion of the productivity

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Speaker 2: gains in their paychecks, making the transition popular with the workforce.

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Speaker 2: Clarina is aiming to become a bank in the United

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Speaker 2: States and is open to investing one billion dollars in

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Speaker 2: the US market in exchange for a sped up licensing process.

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Speaker 2: According to the CEO, the.

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Speaker 1: Suspect charged in the murder of the United Healthcare CEO

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Speaker 1: Brian Thompson was not a customer of the firm. That's

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Speaker 1: according to a company spokesperson who said that neither Luigi

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Speaker 1: Mangioni nor his that were members. New York Police Department

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Speaker 1: Commissioner Jessica Tish says that evidence has been gathered linking

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Speaker 1: Manjouroni to the crime scene.

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Speaker 6: We're also able at our crime lab to match the

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Speaker 6: person of interests fingerprints with fingerprints that we found on

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Speaker 6: both the water bottle and the kind bar near the

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Speaker 6: scene of the homicide in Betown.

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Speaker 1: The NIPDS Jessica Tish speaking that Magjoni was arrested in

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Speaker 1: Pennsylvania on Monday with a manifesto inaccurately describing United Health

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Speaker 1: as the fourth largest company by market value. According to

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Speaker 1: Bloomberg Reporting.

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Speaker 2: Those are your top stories on the markets. We saw

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Speaker 2: stocks in the US closing down. The S and P

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Speaker 2: five hundred finished ten half of one percent, the nasd

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Speaker 2: AC slip seven tenths from old time high's Treasury yields

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Speaker 2: rose for a fourth day in a row. Ten year

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Speaker 2: yields at ever is in twelve basis points this week,

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Speaker 2: they're currently training at four point three read two percent.

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Speaker 2: On currency markets, we have seen the dollar maintaining its

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Speaker 2: gains and Asian trading. Today equity markets are in the red.

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Speaker 2: The hangstings down by one and a half percent, the

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Speaker 2: CSI three hundred also one and a half percent lower.

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Speaker 1: Those are the markets. In a moment, we're going to

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Speaker 1: bring you more on the ECB rate decision, overshadowed by

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Speaker 1: the collapse of the French and German governments. Will go

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Speaker 1: live to Paris, also because emmanue and Macco is expected

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Speaker 1: to announce a new prime minister this morning. But another

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Speaker 1: story caught my eye this morning. This is the account

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Speaker 1: of how South Korea's president declared martial law in a

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Speaker 1: cabinet meeting that lasted only five minutes, so short, there

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Speaker 1: wasn't even a transcript or a memo about it. You

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Speaker 1: made the announcement on TV only minutes later. It's just

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Speaker 1: a fascinating read. It's quite brief, so you have time

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Speaker 1: to look at it this Friday morning.

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Speaker 2: Yeah, indeed, look at the chronology of this massive moment

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Speaker 2: in South Korean politics as well, how the cabinet ministers

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Speaker 2: themselves were taken by surprise as they had been summoned

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Speaker 2: to this late night meeting, and then what happened next

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Speaker 2: as well, as the lawmakers rushed to the National Assembly

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Speaker 2: to try and overturn the declaration, to one of the

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Speaker 2: opposition leaders actually filming himself climbing over a wall to

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Speaker 2: get into the National Assembly as troops had been sent

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Speaker 2: there at the same time. Lots of details and it's

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Speaker 2: a great read from arch colleague Sam Kim on Bloomber,

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Speaker 2: on the Bloomberg terminal and on Bloomberg dot com.

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Speaker 1: Now, the European Central Bank load interest rates for a

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Speaker 1: third consecutive meeting, signaled two more quarter point rate cuts

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Speaker 1: to come inflations near two percent, but the economy in

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Speaker 1: Europe is struggling, joining us now. Bloomberg's Lizzie Burden, who

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Speaker 1: was in Frankfurt yesterday for that decision. You're back in

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Speaker 1: London this morning there, Lizzie. And how duvish was yesterday's

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Speaker 1: cut really?

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Speaker 7: I mean, it was noteworthy that the UCB only went

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Speaker 7: for twenty five basis point cut given the SMB did fifty,

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Speaker 7: but some investors really can't shake the idea that the

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Speaker 7: ECB's going to do a jumbo move at some point

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Speaker 7: in the coming months because of the shaky economy. So

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Speaker 7: remember as well, in the guidance yesterday, they dropped the

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Speaker 7: guidance that policy is going to stay sufficiently restrictive for

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Speaker 7: as long as possible as necessary. And what's interesting is

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Speaker 7: not only did Christine Legard refuse to rule out a

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Speaker 7: fifty basis point cut, but she did admit as well

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Speaker 7: that the forecast yesterday don't include assumptions on Trump's trade

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Speaker 7: policy and Caroline, it seems a pretty safe bet that

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Speaker 7: some of the countries in the euro Area are in

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Speaker 7: for bigger tariffs, so it seems highly probable that that

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Speaker 7: will weigh on Europe, even if only indirectly. On top

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Speaker 7: of that, economists are already saying that the new GDP

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Speaker 7: outlook for twenty twenty five's to rosy given all the

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Speaker 7: political chaos in France and Germany, none of which seems

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Speaker 7: to be going away anytime soon, Which comes back to

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Speaker 7: how much stimulus ECB officials need to provide, probably more

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Speaker 7: than the Bank of England and the fared and this

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Speaker 7: is why you've got Pimco and Fidelity warning that the

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Speaker 7: ECB may have to go lower than neutral.

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Speaker 2: Yeah, which is kind of a really interesting thought given

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Speaker 2: where we were only a couple of months ago and

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Speaker 2: looking at rates coming down. I mean, how pressed was

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Speaker 2: Christine Laguarz in the press conference on these big issues

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Speaker 2: that the bank is going to be facing.

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Speaker 7: Well, was a French woman in Germany. She was going

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Speaker 7: to be asked about politics, and it was kind of

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Speaker 7: the elephant in the room. She didn't want to comment

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Speaker 7: on the situation in French politics. She merely referred to

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Speaker 7: the general political risks that make forecasting difficult. She mentioned

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Speaker 7: the snap elections in Germany in twenty twenty five February.

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Speaker 7: She talked about the uncertainties around the new US government,

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Speaker 7: but no specifics. What we really wanted to know was

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Speaker 7: whether the ECB would be prepared to use the Transmission

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Speaker 7: Protection Instrument if there's another French yield spike like we

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Speaker 7: saw to the grease levels. She said that the use

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Speaker 7: of TPI was not discussed at the ECB meeting, so

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Speaker 7: kind of echoing the Budder's bank president Jokim Nagel in

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Speaker 7: saying that, you know, it's not for the fallout of

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Speaker 7: political developments.

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Speaker 1: Yeah, in terms of the market reac action then to this,

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Speaker 1: I mean, I think it's noteworthy. You know, people like

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Speaker 1: John author Is talking about the world according to Trump

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Speaker 1: is here already that basically the arizon's cutting into a

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Speaker 1: space in anticipation. Even if le Guard wasn't specifically talking

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Speaker 1: about Trump policies.

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Speaker 7: Yeah, well, I would say she wasn't as ubvish as expected.

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Speaker 7: Traders economists can read what they like into the forecasts.

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Speaker 7: But after she spoke, you saw European bonds, especially Italian debt, falling.

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Speaker 7: A Liss saying that her tone basically didn't match the outlook.

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Speaker 7: Traders pairing ECB bets for twenty twenty five so that

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Speaker 7: they saw less than twenty one hundred and twenty five

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Speaker 7: basis points. And partly it comes down to the gap

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Speaker 7: between ECB and FED rates staying wide. That risks weighing

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Speaker 7: on the Euro because you could have this divergence next year.

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Speaker 7: If the situation in the US domestically is they have

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Speaker 7: the lower taxes, it's inflationary. The FED cuts are slower,

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Speaker 7: but the ECB has to cut that currency impact could

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Speaker 7: be what forces the ECB to think about Donald Trump.

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Speaker 2: Yeah, really interesting to see how the European Center Bank

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Speaker 2: will continue from here as well, given that we had

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Speaker 2: that repricing in markets as well after yesterday's meeting. Lizzie

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Speaker 2: Burden for now, thank you very much for joining us

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Speaker 2: on the latest on the European Central Bank meeting. Of course,

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Speaker 2: one of the key factors that we're watching on markets today.

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Speaker 2: We're looking at the euro just below one oh five

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Speaker 2: against the dollar. In this question of dollar strength also

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Speaker 2: very much in focus when we're thinking about where the

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Speaker 2: ECB goes next.

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Speaker 1: Yeah. Absolutely, Well, we were just talking about political uncertainty

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Speaker 1: and instability in France. In Germany, Will, the French President

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Speaker 1: of Manuo In Macon, is expected to name a new

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Speaker 1: prime minister this morning, though he has missed his own

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Speaker 1: self imposed forty eight hour deadline to appoint a success

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Speaker 1: successor to Michelle Barnier. Joining us now from Paris is

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Speaker 1: our senior editor Phil Serafino. Good morning, Phil. What mompromise

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Speaker 1: might mac all come up with? Can whoever it is,

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Speaker 1: lasts longer than Barnier?

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Speaker 8: Well, all the reporting from the past week or so

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Speaker 8: indicates that he's trying to sort of bring the Socialist

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Speaker 8: Party into a coalition of centrist parties center left, center

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Speaker 8: right and sort of leave the far left and the

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Speaker 8: far right parties out on their own. You know, he's

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Speaker 8: been trying this for months and he has not succeeded.

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Speaker 8: But I think the collapse of the Barneer government has

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Speaker 8: focused people's minds a little bit. So, you know, one

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Speaker 8: possible compromise might be the Socialist agree to support this

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Speaker 8: new prime minister and thus the effort to draft a

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Speaker 8: budget that might come along with the condition that he

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Speaker 8: appointed a prime minister from the left. I guess we'll

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Speaker 8: find out in the next couple of hours whether he

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Speaker 8: has managed to get that agreement that seems to be

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Speaker 8: the only way to thread this needle of you know,

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Speaker 8: this divided parliament.

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Speaker 2: Yeah, certainly when you look at the numbers, it's difficult

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Speaker 2: to see alternatives to that as well. I mean, the

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Speaker 2: most passing issue, of course, for whatever takes on this

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Speaker 2: job will be trying to pass a budget. How quickly

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Speaker 2: could that happen?

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Speaker 8: You know the Finance minister, the outgoing finance minister, said

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Speaker 8: it will take weeks or months to get a budget done.

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Speaker 8: It took Barnier of, you know, a month and a

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Speaker 8: half or something like that to come up with the

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Speaker 8: outlines of a budget. One thing that's interesting is the

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Speaker 8: markets seem to be giving France time to get as

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Speaker 8: ack together. I noticed the CAC is actually up one

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Speaker 8: point six percent since the Barneai government fell. The yield

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Speaker 8: spread over German bonds has come down a little bit

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Speaker 8: from its highes, so there's no sense of panic in markets,

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Speaker 8: and investors seemed to be willing to give the government time.

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Speaker 8: If that changes, that would really force them to accelerate things.

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Speaker 8: I think.

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Speaker 1: Can anyone also plicate Marine la Penn and the National Rally?

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Speaker 1: What's the situation with them now?

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Speaker 8: Yeah, my colleagues had some great reporting yesterday what went

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Speaker 8: on behind the scenes. Barnier thought he had an agreement

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Speaker 8: with Marine la Penn to support the budget. He made

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Speaker 8: several concessions that she asked for, and he walked away

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Speaker 8: from a meeting with her thinking she was behind him

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Speaker 8: on this. This is according to people familiar with what

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Speaker 8: went on. And then she called back and asked for

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Speaker 8: more concessions that he refused to make, and that's why

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Speaker 8: she supported the no confidence vote. So you know, if

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Speaker 8: Macron decides to try and pull the Socialists into a

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Speaker 8: centrist coalition, he will sort of in effect be giving

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Speaker 8: up on trying to play Kate marine le Pen and

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Speaker 8: she will remain in the opposition because it seems like

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Speaker 8: she's not She's not willing to compromise to the extent

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Speaker 8: that Macron is, so maybe she can't be placated.

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Speaker 2: Does if I'm Anria macromage is to pull this off?

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Speaker 2: And guess a coalition that works in parliament, is that

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Speaker 2: going to save the rest of his presidency and sort

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Speaker 2: of leave some of those calls for him to quit.

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Speaker 8: It would certainly be a step in that direction, but

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Speaker 8: it is a country in a parliament that is so divided.

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Speaker 8: You know, getting the budget done is the basics. That's

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Speaker 8: the basics of governing, and anything beyond that would still

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Speaker 8: seem to be very difficult. You know, Macron says he's

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Speaker 8: not going to resign, He's going to serve out his

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Speaker 8: term till twenty twenty seven. He is in a much

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Speaker 8: weaker position though, there's no doubt about it.

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