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Speaker 1: Good morning. It's Friday, the tenth of November here in London.

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Speaker 1: This is the BlueBag Daybacurate podcast. I'm Caroline Hepkin.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Held to ransom,

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Speaker 2: the world's biggest bank is forced to trade via USB

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Speaker 2: stick after a major cyber attack.

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Speaker 1: The head of the Federal Reserve says the Central Bank

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Speaker 1: will be careful about where it goes next on interest rates.

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Speaker 2: And we have a special report on how the wars

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Speaker 2: in Ukraine in the Middle East have thrown normal aviation

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Speaker 2: routes and flight times into disarray.

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

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Speaker 2: The Industrial and Commercial Bank of China or ICBC, has

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Speaker 2: been hit by a major cyber attack, and the effects

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Speaker 2: have been felt far and wide. As a result of

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Speaker 2: the hack, trades handled by the world's largest bank and

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Speaker 2: the globe's biggest market were forced to use USB sticks

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Speaker 2: to complete transactions. On Thursday, Boomberg's chief North Asia correspondent,

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Speaker 2: Stephen Engels, says the details of the ransomware attack are

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Speaker 2: still emerging.

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Speaker 3: ICBC, China's largest banks, has confirmed that its US division

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Speaker 3: was attacked by this malware. Malicious software called ransomware, and

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Speaker 3: again we don't know the extent of the disruptions other

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Speaker 3: than traders are saying that there have been a liquidity

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Speaker 3: issues some transactions in the United States and the treasury

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Speaker 3: market have failed to clear, also saying that traders have

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Speaker 3: asked to be to reroot a number of their deals.

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Speaker 2: Steven Angel says the ICBC is suspected of being hacked

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Speaker 2: by Lockbit, the same group that's also attacked Boeing, Ion

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Speaker 2: Trading and the UK's Royal Mail in the past year.

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Speaker 2: The criminal gang with ties to Russia specializes in using

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Speaker 2: ransomware to encrypt files and its victims computers before demanding

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Speaker 2: payment to unlock them.

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Speaker 1: Now, the FED chief Jerown Powell says the Central Bank

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Speaker 1: will continue to move carefully, but won't hesitate to tighten

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Speaker 1: policy further if needed to contain inflation. Speaking at an

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Speaker 1: International Monetary Fund conference in Washington, Power said that policymakers

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Speaker 1: are committed to ensuring interest rates are high enough to

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Speaker 1: return inflation to the two percent target.

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Speaker 4: If it becomes appropriate to tighten policy further, we will

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Speaker 4: not hesitate to do so. We will continue to move carefully, however,

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Speaker 4: allowing us to address both the risk of being misled

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Speaker 4: by a few good months of data and the risk

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Speaker 4: of overtightening.

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Speaker 1: The FED chief also said it wasn't clear how much

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Speaker 1: more inflation progress can be made in the future through

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Speaker 1: supply side improvements. Traders are now betting that the Fed

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Speaker 1: is at the peak of its hiking cycle and will

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Speaker 1: begin cutting rates next year. The dollar and tennure treasure

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Speaker 1: yields added to their advance following the release of POWs

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Speaker 1: remarks ahead of the address, while the S and P

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Speaker 1: extended losses.

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Speaker 2: The UK economy probably contracted slightly in the third quarter.

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Speaker 2: That's according to Bloomberg Economics, who believe that today's GDP

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Speaker 2: data may show the start of a policy induced recession

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Speaker 2: over the summer. We'll get the official figures shortly, but

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Speaker 2: our economists are forecasting that grows will shrink by zero

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Speaker 2: point one percent compared to the previous quarter, while rising

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Speaker 2: year on year. They say the strain of higher rates

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Speaker 2: is already showing, while around half of the impact of

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Speaker 2: Bank of England tightening is yet to feed through to

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Speaker 2: the real economy.

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Speaker 1: Israel says that it has fired back at a Syrian

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Speaker 1: group that targeted a school in the south of the

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Speaker 1: country with a drone. This after the Pentagon said that

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Speaker 1: US military personnel in Syria and Iraq had come under

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Speaker 1: attack four times this week. The White House, meanwhile has

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Speaker 1: confirmed that Israel has agreed to daily four our humanitarian

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Speaker 1: pauses in northern Gaza to allow civilians to escape, but

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Speaker 1: Mark Regev, who advises Israel's Prime Minister, says it's not

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Speaker 1: a cease fire.

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Speaker 5: We will continue this operation until we have destroyed Hamasa's

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Speaker 5: military machine. The idea of a humanitarian pause is in

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Speaker 5: a specific place for a specific time, to help the

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Speaker 5: civilian population, who are not the target of our operation.

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Speaker 5: On the contrary, we want to see them move out

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Speaker 5: of Hamswach.

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Speaker 1: Mark Regev was speaking as Benjamin Etniahu said in a

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Speaker 1: separate interview that a piece deal with Saudi Arabia was

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Speaker 1: still possible despite the ongoing fighting in the Gaza strip.

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Speaker 2: Here in the UK, Rashi Sunak is coming under increasing

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Speaker 2: pressure to sack his Home secretary after she accused London's

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Speaker 2: police of bias over their handling of pro Palestinian marches.

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Speaker 2: In an opinion piece in The Times, Sala Braverman claimed

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Speaker 2: senior officers were playing favorites with protesters. London's labor Mayor

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Speaker 2: Sadik Khan, whoever sees the city's policing, says he's concerned

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Speaker 2: by her remarks.

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Speaker 4: Policing is an independent operational matter for the police rather

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Speaker 4: than politicians, and I worry when Home sackatis and prime

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Speaker 4: ministers tried to interfere.

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Speaker 2: Sadi Khan's comments have been echoed by the labor leader

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Speaker 2: Kir Starmer, who says that Rishi Sunac must step in.

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Speaker 2: And Bloomberg has learned that the Deputy Prime Minister Oliver

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Speaker 2: Dawden has been meeting Sunak's senior advisers to discuss a

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Speaker 2: shakeup of senior ministers, which could happen as soon as

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Speaker 2: next week.

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Speaker 1: US Treasury Secretary Janet Yellen and Chinese economic policies are

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Speaker 1: hurly Feng have begun talks to say the groundwork for

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Speaker 1: an expected visit to the United States by China's President

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Speaker 1: Hijinping next week. Bluebag's Ed Baxter has more.

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Speaker 6: Treasury Secretary Janet Yellen meets again today here in San

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Speaker 6: Francisco with Chinese Vice Premier Hu LaFong. She is saying

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Speaker 6: the US has no desire to break economic ties with China,

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Speaker 6: but these two day meetings are aimed at making progress

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Speaker 6: on a slew of economic issues before the heads of

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Speaker 6: state sit down. The White House has already said it

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Speaker 6: does not expect any major breakthroughs, although would like some

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Speaker 6: communication progress. China's main concerns in the supply chains at

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Speaker 6: high tech, the US focusing on fair competition in tech,

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Speaker 6: as well as freedoms and the issue of Taiwan. In

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Speaker 6: San Francisco, I'm at Baxter Bloomberg Radio.

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Speaker 2: The new Lord Mayor of London wants the city to

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Speaker 2: become a trading hub for the asset classes of the future.

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Speaker 2: Michael Mainelli sees a future for London and hydrogen trading

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Speaker 2: or bonds guaranteeing their removal of space debris. He starts

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Speaker 2: as one year time as Lord Mayor tomorrow, at a

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Speaker 2: time when London's stock market listings are in the doldrums.

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Speaker 2: British investor Pete Flint of Silicon Valley venture capital firm

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Speaker 2: NFX says he wouldn't advise any firms he's backing to

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Speaker 2: list in London.

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Speaker 7: And routing for more British listings, but I would absolutely

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Speaker 7: not advise any company that I'm backing to go public

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Speaker 7: in the UK. Go do in the US, particularly technology.

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Speaker 7: I mean, I don't think the investor base really understand it,

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Speaker 7: and I think they will encourage a British listed company

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Speaker 7: to sort of add more like the other staff in

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Speaker 7: the foot.

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Speaker 8: Sea, which are very traditional, whether.

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Speaker 7: It's pharmaceutical, whether it's or in a guess or manufacturer.

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Speaker 7: I just think go to the US, the investors understand it.

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Speaker 7: There's orders of manitude, more capital.

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Speaker 2: Peterlint of NFX was responding to recent comments in London

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Speaker 2: Stock Exchange CEO Julia Haggard that she wants the London

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Speaker 2: market to be young, scrappy and hungry in the search

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Speaker 2: for new listings. Now coming up in a moment, we

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Speaker 2: will hear from our aviation czar about how wars and

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Speaker 2: geopolitical tensions are adding ours to flight times and many

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Speaker 2: parts of the world. That caught her eye this morning

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Speaker 2: is about a partner who left Goldman Sachs and is

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Speaker 2: now staging a cabaret about it.

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Speaker 1: Looks pretty fantastic. I want to go, yeah, sparkly dress

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Speaker 1: the whole thing. Of course, it's at the cutting room

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Speaker 1: in New York, which is hugely famous venue for cabaret

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Speaker 1: and singing. I think it is part of perhaps it's

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Speaker 1: our version in the financial world of silly season is

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Speaker 1: when everyone gets have a little bit of fun, isn't

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Speaker 1: it Perhaps outside of work it's all for charity, I think.

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Speaker 2: Yeah, indeed, this is Stacy Parley, who was a star

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Speaker 2: affect income sales at Goldman for almost twenty five years.

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Speaker 8: Our colleague A.

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Speaker 2: Manda Gordon writing about this story this morning and quoting

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Speaker 2: some of her former colleagues as well talking about it.

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Speaker 2: She's joking in the cabaret about how she's founding you

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Speaker 2: out for a competitive streak after leaving Goldman sacks and

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Speaker 2: has also found time for golf, which is part of

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Speaker 2: her life after leaving the bank. So an interesting night out.

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Speaker 2: I think if you're in New York.

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Speaker 1: Shore, absolutely look this slogan grabs you divorced, retired, survived.

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Speaker 2: Yeah, you taste of that show From from Stacy Polly,

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Speaker 2: let's turn though to matters financial and Jerome Powell warning

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Speaker 2: that interest rates may have to climb further, echoing comments

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Speaker 2: from other FED speakers we've been hearing from, traders have

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Speaker 2: priced in slightly higher odds of an additional hike. They've

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Speaker 2: pushed back the first potential twenty five basis cut from

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Speaker 2: June to July. Joining us just Gosspinber opinion columnist Daniel

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Speaker 2: mass from Singapore, Dania. Great to have you with us

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Speaker 2: this morning. So we saw shares dropping in many key

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Speaker 2: markets across Asia and Australasia after these comments from Jerome Powell.

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Speaker 2: What's been the impact of the words that we heard

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Speaker 2: from the Federal Reserve chair.

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Speaker 8: There perceived to be just a little more hawkish or

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Speaker 8: a little less darvish, perhaps walking back a bit of

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Speaker 8: the dorvishness from his press conference after the latest FOMC decision.

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Speaker 8: I don't know that, other than a difference in tone,

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Speaker 8: whether we're getting a substantively new message. You know, My

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Speaker 8: sense is the bar for an additional hike is still

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Speaker 8: quite high. They're not really thinking about thinking about cutting

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Speaker 8: the rates.

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Speaker 1: Markets are pricing for the FED rate to actually four

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Speaker 1: by the end of twenty twenty four to four point

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Speaker 1: five five percent. What do we think that the rate

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Speaker 1: trajectory looks like it didn't move a little bit after

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Speaker 1: Powell spoke.

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Speaker 8: Yeah, but again, has it moved substantively? I mean, these

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Speaker 8: things aren't static. You know, the real question is did

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Speaker 8: Pow change his underlying message. I'm not seeing anything that

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Speaker 8: suggested he did. Maybe it's trying to convey Look, we

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Speaker 8: didn't want to come across as too dubvish at the

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Speaker 8: post fom Press conference. You know, it's not necessarily an

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Speaker 8: indication that their underlying message that they're going to proceed carefully.

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Speaker 8: There's no indication that that message is being altered. It

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Speaker 8: is my perception, my feeling that the bar for an

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Speaker 8: additional hike is quite high. You know, to all intents

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Speaker 8: and purposes, they are done. Might there be an extra

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Speaker 8: twenty five somewhere? Sure, Danniel.

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Speaker 2: We're at this point now in the hiking cycle of

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Speaker 2: many of the major central banks where we're thinking about

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Speaker 2: being at the top of the rate hiking cycle, and

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Speaker 2: this conversation about a potential another hike coming from the

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Speaker 2: Federal Reserve interesting to discuss as well. Of course, it's

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Speaker 2: something that's come up at the New Economy Forum in Singapore,

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Speaker 2: where you are as well, Citadel founder Ken Griffin talking

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Speaker 2: about the world facing higher baseline inflation that may last

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Speaker 2: for decades. I wonder in that context, how interesting a

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Speaker 2: moment is this when thinking about global central banking and

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Speaker 2: how they tackle the idea of inflation, perhaps staying with

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Speaker 2: us while they're stuck in this moment of not wanting

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Speaker 2: to push the economy too far.

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Speaker 8: In my view, central banking is always interesting. I mean,

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Speaker 8: I have a stack of central banking books on my nightstand,

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Speaker 8: so it's never boring for me. I would be cautious about,

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Speaker 8: you know, assuming that you know, the levels of inflation

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Speaker 8: we've seen are permanent, you know, don't forget. In the

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Speaker 8: decade before the pandemic, the anxiety was, my god, inflation's

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Speaker 8: just too low. You know, we could use a little

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Speaker 8: higher inflation, Thank you very much. Janet Yellen, when she

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Speaker 8: was then FED chair in twenty seventeen, called inflation's quiescence

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Speaker 8: a mystery. And that was in the middle of the

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Speaker 8: longest US expansion on record. So, you know, we need

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Speaker 8: to be careful about assuming things are going to last

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Speaker 8: for decades and decades. And it's important to add that

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Speaker 8: the Fed's preferred gauge of inflation PCE has come down

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Speaker 8: significantly over the course of this year. Last year, they

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Speaker 8: had a problem, no question about it, and they were

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Speaker 8: determined to get on top of it, and they appear

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Speaker 8: to have done that. Now. Is it too high for comfort? Sure?

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Speaker 8: But is it high and coming down or high and

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Speaker 8: remaining it? It's high and coming down.

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Speaker 1: Okay, Daniel, thank you so much for being with us

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Speaker 1: this morning. Been a big opinion. Colonist Daniel Mosse joined

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Speaker 1: US Life from Singapore.

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Speaker 2: We're turning to matters elsewhere now. The Middle East has

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Speaker 2: long been a global crossroads for air travel, but flying

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Speaker 2: those routes has become more difficult in recent weeks, with

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Speaker 2: airlines forced to skirt war zones and curtail services as

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Speaker 2: a safety precaution. That's after Russia's invasion of Ukraine had

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Speaker 2: already added hours to many journeys by shutting down vast

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Speaker 2: airspace to many transnational operators. Showing us now to discuss

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Speaker 2: Blueger Bloomberg's global aviation z are Anthony Pallazzo. Great to

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Speaker 2: have you with us on the program. Anthony, what it's

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Speaker 2: been the impact, first of all of Russia's airspace being

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Speaker 2: closed on long distance.

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Speaker 9: Flights, Well, it's been a big problem for the US

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Speaker 9: and European airlines. It's added hours to trips that used

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Speaker 9: to fly over the top of the globe through Siberia,

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Speaker 9: especially to North Asian destinations like Tokyo and Seoul and Shanghai.

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Speaker 9: It's even It's even caused the Scandinavian carrier fit Air

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Speaker 9: to completely change its long haul strategy, which used to

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Speaker 9: give it great access to shorter trips to Asia based

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Speaker 9: on its geographic location. So big US and European carriers

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Speaker 9: like United and Air France have complained loudly about this.

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Speaker 9: Chinese airlines can still overfly Russia, as can Indian airlines

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Speaker 9: because they're not subject to the Russian sanctions, and that

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Speaker 9: puts them an advantage.

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Speaker 1: Israel as a war with ham though, how has that

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Speaker 1: added to the difficulties Antonay.

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Speaker 10: Well, it's had an effect a couple in a couple

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Speaker 10: of places. First of all, it's made it harder to

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Speaker 10: fly in and out of the region. So most carriers

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Speaker 10: stopped flying to Tel Aviv shortly after the October seventh

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Speaker 10: attacks by Hamas, and some airlines like Lufthansa are avoiding

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Speaker 10: nearby cities like Beirut because of the danger that they perceive,

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Speaker 10: and so then travelers also aren't eager to fly into

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Speaker 10: the Middle East. So we've heard from a number of

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Speaker 10: airlines from Ryanair to Air France, and we heard from

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Speaker 10: Whiz yesterday and they've all reported a softening of demand

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Speaker 10: to the area, so that's something we're keeping an eye on.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: stories making news from London to Wall Streets and beyond.

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Speaker 1: I'm Caroline Hepka and.

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