1 00:00:02,680 --> 00:00:05,320 Speaker 1: Good morning. It's Thursday, the twelfth of October in London. 2 00:00:05,400 --> 00:00:08,440 Speaker 1: This is the Bloomberg Daybreak You're podcast. I'm Stephen Carroll 3 00:00:08,480 --> 00:00:11,920 Speaker 1: coming up today. Israel vows to wipe Hamas off the 4 00:00:11,960 --> 00:00:14,880 Speaker 1: face of the earth, as the Palestinians worn of a 5 00:00:14,920 --> 00:00:18,360 Speaker 1: war of extermination. In other news, the boss of Barclays 6 00:00:18,400 --> 00:00:22,360 Speaker 1: tells us that bank earnings remain under pressure and it's 7 00:00:22,440 --> 00:00:24,840 Speaker 1: good to be wanted. The CEO of the London Stock 8 00:00:24,880 --> 00:00:28,760 Speaker 1: Exchange makes the case for the upside of having fewer listings. 9 00:00:29,040 --> 00:00:32,880 Speaker 1: Let's start with a roundup of our top stories. Five 10 00:00:33,000 --> 00:00:36,159 Speaker 1: days after Hamas carried out the deadliest attack on Israel 11 00:00:36,200 --> 00:00:38,919 Speaker 1: in half a century, both sides are bracing for a 12 00:00:38,960 --> 00:00:42,840 Speaker 1: major ground attack on Gaza. Israel has formed a rare 13 00:00:42,960 --> 00:00:46,600 Speaker 1: emergency government with some opposition parties to see the country 14 00:00:46,640 --> 00:00:50,160 Speaker 1: through its war with Hamas. The country's Defense Minister, Joav 15 00:00:50,240 --> 00:00:53,600 Speaker 1: Galant has vowed to wipe the group off the face 16 00:00:53,640 --> 00:00:56,240 Speaker 1: of the earth, while Prime Minister Benjamin Neettania who says 17 00:00:56,240 --> 00:00:58,840 Speaker 1: the response will be overwhelming and we. 18 00:00:58,800 --> 00:01:02,600 Speaker 2: Are fighting with all strength on all fronts. We went 19 00:01:02,680 --> 00:01:06,200 Speaker 2: on the offensive. Every Hamas member is a dead man. 20 00:01:06,680 --> 00:01:10,440 Speaker 2: Hamas is Isis, and it will be crushed and eliminated, 21 00:01:10,880 --> 00:01:13,280 Speaker 2: just as the world crushed an eliminated Isis. 22 00:01:13,560 --> 00:01:15,840 Speaker 1: Natanaw Who's comments come as the fate of dozens of 23 00:01:15,880 --> 00:01:19,280 Speaker 1: hostages taken by Hamas over the weekend hangs in the balance. 24 00:01:19,600 --> 00:01:22,800 Speaker 1: Despite threats that the militant group will start killing hostages, 25 00:01:22,840 --> 00:01:25,880 Speaker 1: the latest rhetoric from the Israeli government suggests they may 26 00:01:25,920 --> 00:01:30,280 Speaker 1: not wait to secure their safety before going in. The 27 00:01:30,360 --> 00:01:33,040 Speaker 1: US President has again offered his full support to Israel, 28 00:01:33,080 --> 00:01:36,119 Speaker 1: saying the US stands shoulder to shoulder with its ally. 29 00:01:36,560 --> 00:01:38,839 Speaker 1: Joe Biden says he can't give details of the action 30 00:01:38,959 --> 00:01:41,760 Speaker 1: they're taking to secure the release of American hostages. 31 00:01:42,319 --> 00:01:44,280 Speaker 3: We want to make it real clear. We're working on 32 00:01:44,480 --> 00:01:47,240 Speaker 3: every aspect of the hostage crisis, and there's an including 33 00:01:47,840 --> 00:01:51,400 Speaker 3: deployed experts to advise and assist with recovery efforts. Now 34 00:01:51,400 --> 00:01:53,320 Speaker 3: the press are going to shout to me, and many 35 00:01:53,360 --> 00:01:55,840 Speaker 3: of you are that you know what are you doing 36 00:01:55,880 --> 00:01:59,960 Speaker 3: to bring these get these folks home. If I told you, 37 00:02:00,120 --> 00:02:03,240 Speaker 3: I wouldn't be able to get them home. Folks, there's 38 00:02:03,280 --> 00:02:06,040 Speaker 3: a lot we're doing, a lot we're doing. I have 39 00:02:06,160 --> 00:02:09,200 Speaker 3: not given up hope bring these folks home. 40 00:02:10,840 --> 00:02:13,480 Speaker 1: Joe Biden is conducting a series of calls with leaders 41 00:02:13,480 --> 00:02:15,640 Speaker 1: in Europe in the Middle East to rally support for 42 00:02:15,760 --> 00:02:19,359 Speaker 1: Israel in response to last weekend's deadly attacks. The US 43 00:02:19,520 --> 00:02:21,720 Speaker 1: Secretary of State Anthony Blincoln is on his way to 44 00:02:21,760 --> 00:02:24,000 Speaker 1: Tel Aviv, saying the point of his trip is to 45 00:02:24,080 --> 00:02:27,760 Speaker 1: show how they have Israel's back at a time of crisis. 46 00:02:28,720 --> 00:02:31,520 Speaker 1: More than twenty four hundred people have now been killed 47 00:02:31,560 --> 00:02:35,240 Speaker 1: since Saturday's surprise attack against Israel. The Israeli Army says 48 00:02:35,280 --> 00:02:38,919 Speaker 1: extensive attacks are underway against a large number of Hamas 49 00:02:38,960 --> 00:02:42,959 Speaker 1: locations in Gaza. The bombardment comes as Palestinian Foreign Minister 50 00:02:43,040 --> 00:02:45,840 Speaker 1: Riad Malki warned that his people are facing a quote 51 00:02:46,000 --> 00:02:50,360 Speaker 1: war of extermination. British surgeon Abd Alhamad is currently in 52 00:02:50,440 --> 00:02:52,960 Speaker 1: Gaza and says hospitals are struggling a. 53 00:02:53,160 --> 00:02:56,720 Speaker 4: Look a bit warried now because the electricity has been 54 00:02:56,960 --> 00:03:01,520 Speaker 4: cut off, so all dependent on the and if they 55 00:03:01,520 --> 00:03:04,800 Speaker 4: don't have enough fuels to run them then it would 56 00:03:04,800 --> 00:03:06,760 Speaker 4: become a disaster. 57 00:03:07,200 --> 00:03:10,520 Speaker 1: Doctor Abdelhammad's warning comes as the UN Secretary General Antonio 58 00:03:10,600 --> 00:03:14,320 Speaker 1: Guitaresh calls for essential supplies of food, fuel, and water 59 00:03:14,440 --> 00:03:18,520 Speaker 1: to be allowed to reach civilians in the territory. Turning 60 00:03:18,520 --> 00:03:22,000 Speaker 1: to other news, stagnant deal activity, easing volatility, and peaking 61 00:03:22,040 --> 00:03:25,000 Speaker 1: interest rates are set to compound pressure on bank earnings. 62 00:03:25,040 --> 00:03:28,079 Speaker 1: According to the boss of Barclay's, speaking to Bloomberg's In 63 00:03:28,120 --> 00:03:31,400 Speaker 1: the City podcast, CESVN, Katea Krishnan said a deal making 64 00:03:31,440 --> 00:03:33,560 Speaker 1: revival won't be happening anytime soon. 65 00:03:34,440 --> 00:03:37,200 Speaker 5: There is a challenge in the banking environment. Number one, 66 00:03:37,600 --> 00:03:41,560 Speaker 5: you've got deal flow which increased very slightly at the 67 00:03:41,560 --> 00:03:45,480 Speaker 5: start of September. Still looking that the revival is looking 68 00:03:45,520 --> 00:03:48,280 Speaker 5: a little further away. I'm still hopeful by the way 69 00:03:48,440 --> 00:03:50,520 Speaker 5: that if things settled down, deal flows come back. So 70 00:03:50,520 --> 00:03:52,440 Speaker 5: I think you need to look through this period. You've 71 00:03:52,440 --> 00:03:55,720 Speaker 5: got interest rates which are peaking for a bank, it 72 00:03:55,760 --> 00:03:58,200 Speaker 5: would lead to a peaking in net interest margins, and 73 00:03:58,240 --> 00:04:01,400 Speaker 5: then market volatility which is there but less than it 74 00:04:01,480 --> 00:04:03,920 Speaker 5: used to be, which will obviously impact the way you 75 00:04:03,960 --> 00:04:05,920 Speaker 5: think longer term about trading revenues. 76 00:04:06,720 --> 00:04:09,120 Speaker 1: Fank catcreation and ada that the lack of deals will 77 00:04:09,160 --> 00:04:12,800 Speaker 1: hold back front office recruitment for the time being, while 78 00:04:12,880 --> 00:04:16,520 Speaker 1: hiring has likely already reached a plateau. In investment banking, 79 00:04:17,279 --> 00:04:19,599 Speaker 1: the UK listings may be thin on the ground, but 80 00:04:19,680 --> 00:04:22,479 Speaker 1: the boss of the London Stock Exchange says there's value 81 00:04:22,520 --> 00:04:26,960 Speaker 1: in such scarcity. Speaking to Bloomberg, ls CEO David Swimmer 82 00:04:27,200 --> 00:04:30,039 Speaker 1: says argued that it could be a selling point for 83 00:04:30,120 --> 00:04:31,000 Speaker 1: certain firms. 84 00:04:31,240 --> 00:04:35,480 Speaker 6: There are plenty of companies that feel that London Europe 85 00:04:35,680 --> 00:04:39,320 Speaker 6: is their home. We are the most international financial center 86 00:04:39,360 --> 00:04:42,520 Speaker 6: and that includes the most international listing destination. You may 87 00:04:42,520 --> 00:04:45,599 Speaker 6: be a company that gets lost in the US market 88 00:04:45,760 --> 00:04:48,200 Speaker 6: and gets a lot of attention in London. I don't 89 00:04:48,200 --> 00:04:49,440 Speaker 6: think when you spend a lot of time about the 90 00:04:49,480 --> 00:04:52,520 Speaker 6: litigation environment in the US, which I think is painful 91 00:04:52,560 --> 00:04:54,680 Speaker 6: for those who choose to choose to list in the US. 92 00:04:55,520 --> 00:04:58,880 Speaker 1: Swimmer says he also believes that various reforms to boost 93 00:04:59,000 --> 00:05:02,440 Speaker 1: London listings will soon bear fruit, adding that he expects 94 00:05:02,560 --> 00:05:07,479 Speaker 1: listing pipelines to increase once economic conditions improve and the 95 00:05:07,480 --> 00:05:12,000 Speaker 1: crises in the Middle East and Ukraine ease. FED officials 96 00:05:12,040 --> 00:05:15,000 Speaker 1: agreed policy should remain restrictive for some time. According to 97 00:05:15,040 --> 00:05:17,760 Speaker 1: the minutes of their September meeting. They also noted that 98 00:05:17,880 --> 00:05:20,400 Speaker 1: risks have become more two sided, with the danger of 99 00:05:20,480 --> 00:05:25,800 Speaker 1: overtightening under recession balanced against prolonging inflation above two percent. 100 00:05:26,279 --> 00:05:28,760 Speaker 1: The release of the minutes come as central bank policy 101 00:05:28,760 --> 00:05:31,880 Speaker 1: makers continue to weigh in on the rate path. Federal 102 00:05:31,960 --> 00:05:35,520 Speaker 1: Reserve Bank of Boston presidentsus and Collins said officials are 103 00:05:35,520 --> 00:05:37,840 Speaker 1: now adopting a weight and sea strategy. 104 00:05:38,120 --> 00:05:41,080 Speaker 7: In my view, this transition to a more patient approach, 105 00:05:41,480 --> 00:05:45,919 Speaker 7: taking the time to holistically assess incoming information, was warranted 106 00:05:45,920 --> 00:05:48,919 Speaker 7: for a number of reasons. In particular, it reflects the 107 00:05:48,920 --> 00:05:51,919 Speaker 7: fact that we're likely very near and perhaps at the 108 00:05:51,960 --> 00:05:54,960 Speaker 7: peak for this tightening cycle, with the risk of inflation 109 00:05:55,080 --> 00:05:58,880 Speaker 7: remaining persistently high more closely balanced with the risk of 110 00:05:58,920 --> 00:06:01,800 Speaker 7: slowing activity more than then needed to achieve price stability. 111 00:06:03,040 --> 00:06:06,000 Speaker 1: Collins, who does not vote on rate decisions this year, 112 00:06:06,040 --> 00:06:09,000 Speaker 1: said she expects policymakers will need to hold rates at 113 00:06:09,040 --> 00:06:13,280 Speaker 1: restrictive levels for some time, and the UK housing market 114 00:06:13,360 --> 00:06:16,600 Speaker 1: showed signs of stabilizing in September. The latest survey from 115 00:06:16,640 --> 00:06:19,720 Speaker 1: the Royal Institution of Chartered Surveyors showed an increase in 116 00:06:19,720 --> 00:06:24,279 Speaker 1: inquiries from buyers and an uptick in sales. Expectations for 117 00:06:24,360 --> 00:06:27,719 Speaker 1: housing transactions for the next twelve months also turned positive. 118 00:06:28,080 --> 00:06:30,520 Speaker 1: RIX says market sentiment was boosted by the Bank of 119 00:06:30,560 --> 00:06:33,640 Speaker 1: England pausing its interest rate hikes, but it's warned that 120 00:06:33,640 --> 00:06:36,960 Speaker 1: most of the indicators are still deeply negative, with falling 121 00:06:37,000 --> 00:06:42,360 Speaker 1: house prices now the most widespread since two thousand and nine. Well, 122 00:06:42,440 --> 00:06:44,960 Speaker 1: let's get more on the situation in Israel now the 123 00:06:45,000 --> 00:06:48,080 Speaker 1: country's defense minister promising to wipe Hamas off the face 124 00:06:48,120 --> 00:06:50,120 Speaker 1: of the earth, as a ground invasion into Gaza now 125 00:06:50,120 --> 00:06:53,200 Speaker 1: looks increasingly likely. For more, we're joined by our head 126 00:06:53,200 --> 00:06:56,960 Speaker 1: of Middle Eastern North Africa, Stewart Livingstone Wallace, for details. Stewart, 127 00:06:56,960 --> 00:07:00,040 Speaker 1: good morning to you. Israel's ministy providing an update this 128 00:07:00,160 --> 00:07:03,160 Speaker 1: morning on their activities targeting Hamas. What's been happening overnight? 129 00:07:04,120 --> 00:07:06,880 Speaker 8: I think we can assume, given what we've heard overnight, 130 00:07:07,160 --> 00:07:09,520 Speaker 8: that it's been much the same as the last several days, 131 00:07:09,560 --> 00:07:14,120 Speaker 8: where typically hundreds of targets have been hit over twenty 132 00:07:14,120 --> 00:07:16,560 Speaker 8: four hour periods. So it'll be more of the same, 133 00:07:16,600 --> 00:07:18,880 Speaker 8: we suspect. But again, that briefing kicks off in twenty 134 00:07:18,920 --> 00:07:22,320 Speaker 8: minutes and we'll have headlines shortly after that. What we 135 00:07:22,360 --> 00:07:25,320 Speaker 8: can say about the situation on the ground. Obviously, things 136 00:07:25,400 --> 00:07:28,640 Speaker 8: are getting pretty bad in Gaza itself. As I think 137 00:07:28,680 --> 00:07:32,000 Speaker 8: one of your previous guests said, the electricity has gone 138 00:07:32,160 --> 00:07:34,880 Speaker 8: off and they are running on generators. The fuel at 139 00:07:34,880 --> 00:07:38,120 Speaker 8: some point will run out, and remember there's a blockade 140 00:07:38,160 --> 00:07:41,120 Speaker 8: around it, so you know, similarly, we have concerns about 141 00:07:41,200 --> 00:07:44,440 Speaker 8: food supply, medical supplies and so on. And we do 142 00:07:44,560 --> 00:07:48,960 Speaker 8: know that something like three hundred thousand, of fact more 143 00:07:49,000 --> 00:07:51,640 Speaker 8: than three hundred thousand have been displaced within Gaza. Remember 144 00:07:51,680 --> 00:07:54,320 Speaker 8: it's a very narrow strip of land, so typically they're 145 00:07:54,360 --> 00:07:56,960 Speaker 8: only moving a few kilometers at a time. We know 146 00:07:57,000 --> 00:08:00,760 Speaker 8: a great many of them are taking shelter in the 147 00:08:00,880 --> 00:08:05,040 Speaker 8: un schools that are operated there to try and offer 148 00:08:05,080 --> 00:08:08,000 Speaker 8: them some sort of protection. Meanwhile, on the other side 149 00:08:08,000 --> 00:08:12,600 Speaker 8: of the border, the reserves continue to build up. I think, 150 00:08:12,600 --> 00:08:14,840 Speaker 8: as I mentioned yesterday, we have this sort of forward 151 00:08:14,880 --> 00:08:18,200 Speaker 8: base being built that can house certainly several thousands of soldiers. 152 00:08:19,040 --> 00:08:22,440 Speaker 8: And most importantly in terms of thinking forward to what 153 00:08:22,520 --> 00:08:24,760 Speaker 8: might happen in the next few days, we had that 154 00:08:24,840 --> 00:08:28,560 Speaker 8: emergency government formed in Israel last night late last night 155 00:08:29,320 --> 00:08:32,720 Speaker 8: that includes at least one member of the opposition, So 156 00:08:32,960 --> 00:08:36,199 Speaker 8: really all of that is pointing to a ground ward now. 157 00:08:36,280 --> 00:08:39,119 Speaker 8: So far, we have not had anyone say that officially, 158 00:08:40,000 --> 00:08:41,959 Speaker 8: but if you look at all the evidence, it really 159 00:08:41,960 --> 00:08:44,720 Speaker 8: does seem to be pointing that way. 160 00:08:45,120 --> 00:08:45,679 Speaker 5: Stuart. 161 00:08:45,960 --> 00:08:49,400 Speaker 1: We've also had on the northern border of Israel as well, 162 00:08:49,840 --> 00:08:54,319 Speaker 1: Israeli jets starking Hesbla targets after we saw guided missiles 163 00:08:54,400 --> 00:08:57,559 Speaker 1: launched an Israeli army post yesterday. How real is the 164 00:08:57,640 --> 00:08:59,080 Speaker 1: risk of an escalation on that front. 165 00:09:00,840 --> 00:09:03,319 Speaker 8: It is something I think that we and everyone else 166 00:09:03,320 --> 00:09:07,240 Speaker 8: are very concerned about. I mean, obviously Hesbullah is an 167 00:09:07,280 --> 00:09:11,040 Speaker 8: extremely large fighting force, it is very well armed, and 168 00:09:11,320 --> 00:09:13,720 Speaker 8: while it is absolutely true that we've not seen any 169 00:09:13,920 --> 00:09:19,200 Speaker 8: large scale incursions or large scale attacks from that arena yet, 170 00:09:20,120 --> 00:09:21,839 Speaker 8: I think the big warrior is that if a ground 171 00:09:21,840 --> 00:09:25,120 Speaker 8: war does start in Gaza, that Hesbula may open up 172 00:09:25,120 --> 00:09:28,880 Speaker 8: the second front in the north. Again, very difficult to 173 00:09:29,240 --> 00:09:32,319 Speaker 8: judge now whether that's likely to happen, but again I 174 00:09:32,320 --> 00:09:34,160 Speaker 8: would say they have form when it comes to that 175 00:09:34,200 --> 00:09:34,800 Speaker 8: sort of thing. 176 00:09:35,559 --> 00:09:39,040 Speaker 1: That the international community has for the most part been 177 00:09:39,200 --> 00:09:43,840 Speaker 1: outraged by the actions of Hamas in Israel. If Israel 178 00:09:43,880 --> 00:09:47,960 Speaker 1: proceeds with the ground invasion, could perceptions across the region change? 179 00:09:49,480 --> 00:09:53,320 Speaker 8: Yeah, I think that is a very real possibility. As 180 00:09:53,360 --> 00:09:55,520 Speaker 8: you know, the sort of the last several years have 181 00:09:55,640 --> 00:09:59,160 Speaker 8: really been punctuated by a series of nations signing the 182 00:09:59,200 --> 00:10:02,079 Speaker 8: so called Abraham Cards, that is, basically making peace with 183 00:10:02,200 --> 00:10:05,000 Speaker 8: Israel and trying to foster trade and economic growth as 184 00:10:05,000 --> 00:10:07,480 Speaker 8: a means of bringing stability to the region. And that 185 00:10:07,559 --> 00:10:11,160 Speaker 8: had made some headway, and until very recently, you know, 186 00:10:11,160 --> 00:10:13,280 Speaker 8: as recently as a couple of weeks ago, the expectation 187 00:10:13,400 --> 00:10:15,320 Speaker 8: was that eventually we would end up with sadly Raber 188 00:10:15,400 --> 00:10:18,160 Speaker 8: in that as well. But I think the events, certainly 189 00:10:18,160 --> 00:10:20,560 Speaker 8: of the last five days have put that on hold. 190 00:10:20,679 --> 00:10:22,960 Speaker 8: And as you say, it really depends on what happens 191 00:10:22,960 --> 00:10:27,160 Speaker 8: in Gaza. I think if it gets very, very bad, 192 00:10:27,840 --> 00:10:31,280 Speaker 8: then that will change public opinion within the Arab world 193 00:10:31,920 --> 00:10:33,960 Speaker 8: and it's going to be very difficult, I think for 194 00:10:34,040 --> 00:10:37,160 Speaker 8: governments to continue with those sort of those measures. Now 195 00:10:37,240 --> 00:10:39,680 Speaker 8: quite half aur that goes. Does it end up with 196 00:10:39,840 --> 00:10:41,920 Speaker 8: sort of the Abraham calls breaking up that That is 197 00:10:42,400 --> 00:10:44,480 Speaker 8: really difficult to judge at this stage of the game, 198 00:10:44,920 --> 00:10:47,360 Speaker 8: but it is certainly a big, big concern. 199 00:10:48,000 --> 00:10:50,800 Speaker 1: Okay Stewart Livingston Wallace are head of Middleast North Africa. 200 00:10:50,840 --> 00:10:53,560 Speaker 1: Thank you so much for joining us this morning. Let's 201 00:10:53,559 --> 00:10:56,280 Speaker 1: bring in our mid least anchor, Yusef Kamaladan, who's with 202 00:10:56,360 --> 00:10:58,000 Speaker 1: us in our London studio this morning. You have great 203 00:10:58,000 --> 00:11:00,280 Speaker 1: to have you with us. We are also, of course 204 00:11:00,320 --> 00:11:04,040 Speaker 1: watching for the arrival of US Secretary of State Anthony Blincoln, 205 00:11:04,200 --> 00:11:08,040 Speaker 1: due to arrive in Israel today. What should we expecting 206 00:11:08,080 --> 00:11:09,479 Speaker 1: to hear during that visits. 207 00:11:09,600 --> 00:11:14,040 Speaker 9: It's going to be even clearer indication of the kind 208 00:11:14,080 --> 00:11:17,959 Speaker 9: of support militarily that the Israeli government could get. We understand, 209 00:11:18,000 --> 00:11:21,280 Speaker 9: of course that they're going to replenish some of the 210 00:11:21,400 --> 00:11:26,560 Speaker 9: iron down supplies and at the world's largest aircraft carriers 211 00:11:26,559 --> 00:11:29,280 Speaker 9: there as well in terms of military force, but we 212 00:11:29,360 --> 00:11:30,920 Speaker 9: have something a little bit more tangible that we can 213 00:11:30,920 --> 00:11:33,679 Speaker 9: put our teeth into in terms of the volumes. And 214 00:11:33,720 --> 00:11:37,440 Speaker 9: then after that probably a trip to Aman to meet 215 00:11:37,440 --> 00:11:39,960 Speaker 9: with the Jordanian delegation. Whether he meets with the king 216 00:11:40,040 --> 00:11:41,440 Speaker 9: or not remains to be seen. The king gave a 217 00:11:41,480 --> 00:11:44,040 Speaker 9: very passionate speech, Yester. They're calling for an end to 218 00:11:44,080 --> 00:11:46,400 Speaker 9: the violence. But more importantly, there may be a meeting 219 00:11:46,440 --> 00:11:49,360 Speaker 9: with the President of the Palestinian Authority, so that is 220 00:11:49,520 --> 00:11:53,720 Speaker 9: mahmouda Bass. And then we'll see whether Mahamuda Bass and 221 00:11:53,760 --> 00:11:58,000 Speaker 9: then by virtue maybe or by extension Katari diplomatic efforts, 222 00:11:58,040 --> 00:12:02,000 Speaker 9: they can bring everybody to the table and see how 223 00:12:02,080 --> 00:12:04,560 Speaker 9: they can resolve this. I mean, obviously, with the stated 224 00:12:04,600 --> 00:12:08,640 Speaker 9: military objectives from Israel to destroy Hamas in the Gaza strip, 225 00:12:08,679 --> 00:12:12,720 Speaker 9: which is very compressed area, it's hard to see how 226 00:12:12,720 --> 00:12:14,480 Speaker 9: they're going to get there, but they're going to try. 227 00:12:15,679 --> 00:12:16,040 Speaker 5: Of course. 228 00:12:16,080 --> 00:12:19,400 Speaker 1: The role of Iran has been very carefully scrutinized in 229 00:12:19,480 --> 00:12:23,320 Speaker 1: recent days as well, the US Treasury Secretary Janney Allen 230 00:12:23,400 --> 00:12:26,439 Speaker 1: saying that the Biden administration hasn't ruled out new sanctions 231 00:12:26,600 --> 00:12:29,440 Speaker 1: against Iran. What should we be watching when it comes 232 00:12:29,440 --> 00:12:32,800 Speaker 1: to Iran's movements and activities in the next few days. 233 00:12:33,000 --> 00:12:34,640 Speaker 9: Well, the rhetoric is going to be key here, because 234 00:12:34,679 --> 00:12:38,240 Speaker 9: as much as it is controversial, they've been very selective 235 00:12:38,280 --> 00:12:40,959 Speaker 9: about the words that they choose, and they haven't actually 236 00:12:41,000 --> 00:12:44,240 Speaker 9: acknowledged responsibility for it. They've cheered for it. That's a 237 00:12:44,240 --> 00:12:47,200 Speaker 9: big difference in taking responsibility for it. What I would 238 00:12:47,240 --> 00:12:50,840 Speaker 9: point to as well is how Saudi Arabia is reaching 239 00:12:50,840 --> 00:12:53,520 Speaker 9: out to Iran, and the two have already seen a 240 00:12:53,520 --> 00:12:56,480 Speaker 9: bit of rap Roschman throughout the year, so they reopened 241 00:12:56,520 --> 00:13:00,199 Speaker 9: embassies only recently. For years they didn't speak to each other. 242 00:13:00,720 --> 00:13:02,760 Speaker 9: But now, in order to find a way to break 243 00:13:02,760 --> 00:13:06,240 Speaker 9: the mold, the Saudi kron Prince Muhammad bin Salman got 244 00:13:06,280 --> 00:13:08,640 Speaker 9: on the phone with the Iranian head of state. I mean, 245 00:13:08,640 --> 00:13:11,080 Speaker 9: this is something you know, unheard of in the region. 246 00:13:11,120 --> 00:13:14,000 Speaker 9: I mean, it's something it's something you could consider a 247 00:13:14,000 --> 00:13:17,680 Speaker 9: milestone within the context of Middle East politics in the 248 00:13:17,720 --> 00:13:20,080 Speaker 9: last fifty years. And so they got on the phone 249 00:13:20,120 --> 00:13:23,800 Speaker 9: and talked about the war on Guz and maybe with 250 00:13:23,920 --> 00:13:28,120 Speaker 9: some Saudi Iranian coordination, you know, there can be a 251 00:13:28,200 --> 00:13:32,160 Speaker 9: way to steer this into halt and violence and the 252 00:13:32,360 --> 00:13:33,319 Speaker 9: loss of lives. 253 00:13:33,760 --> 00:13:36,920 Speaker 1: One of the elements around around that we are watching is, 254 00:13:36,960 --> 00:13:39,200 Speaker 1: of course, because if the potential impact on oil markets. 255 00:13:39,200 --> 00:13:41,480 Speaker 1: Now we had that jump on oil prices on Monday 256 00:13:41,640 --> 00:13:47,160 Speaker 1: as markets reopened following those attacks, that has largely retrenched sense, 257 00:13:47,280 --> 00:13:49,319 Speaker 1: but this is going to be a factor to watch 258 00:13:49,400 --> 00:13:51,840 Speaker 1: when we're thinking about the market element of the story. 259 00:13:52,040 --> 00:13:54,920 Speaker 9: Yeah, absolutely so. I mean all week we've been talking 260 00:13:54,920 --> 00:13:58,760 Speaker 9: about the potential of increased sanctions coming again and taking 261 00:13:58,800 --> 00:14:02,319 Speaker 9: away the rebound that we've seen in Iranian oil exports, 262 00:14:02,320 --> 00:14:05,080 Speaker 9: which are about seven hundred thousand barrels per day. I 263 00:14:05,120 --> 00:14:07,880 Speaker 9: was looking at a note from mcguori just this morning, 264 00:14:07,880 --> 00:14:10,840 Speaker 9: and they actually make the case that what you're seeing 265 00:14:10,880 --> 00:14:14,839 Speaker 9: in terms of the Israel Hamas war is actually bearish 266 00:14:14,880 --> 00:14:18,400 Speaker 9: for energy prices. The conflict is unlikely to upset physical 267 00:14:18,440 --> 00:14:21,840 Speaker 9: oil flows because the Biden administration's policy approach has been 268 00:14:21,880 --> 00:14:25,560 Speaker 9: to limit supply disruption. That's according to their team. There 269 00:14:25,840 --> 00:14:28,720 Speaker 9: basically some upside risks associated with the conflict of the beliefs, 270 00:14:28,760 --> 00:14:32,400 Speaker 9: but overall they remain bearish on energy prices and waning 271 00:14:32,480 --> 00:14:36,120 Speaker 9: OPEK plus compliance given the rising production of sweet oils 272 00:14:36,120 --> 00:14:39,600 Speaker 9: from the US, North Sea and Brazil, so you know, 273 00:14:39,680 --> 00:14:41,600 Speaker 9: a lot of moving pieces. The Sallis said they're going 274 00:14:41,680 --> 00:14:44,080 Speaker 9: to keep coordinating with the Russians. They want to meet 275 00:14:44,120 --> 00:14:45,800 Speaker 9: in person in November. 276 00:14:46,000 --> 00:14:47,480 Speaker 5: Okay, plenty to watch there USUF. 277 00:14:47,560 --> 00:14:49,520 Speaker 1: Great to have you in studio and bringing us your 278 00:14:49,560 --> 00:14:52,240 Speaker 1: expertise as well that subliver televisions use of Gamaladen who 279 00:14:52,320 --> 00:14:55,920 Speaker 1: joins us in London this morning. The Bartley CEO says 280 00:14:56,000 --> 00:14:58,840 Speaker 1: a revival and deal making is still looking a little 281 00:14:58,920 --> 00:15:02,920 Speaker 1: further away. That's despite tentative signs of activity returning. At 282 00:15:02,920 --> 00:15:05,840 Speaker 1: the start of September. C spen Kate Christian has been 283 00:15:05,840 --> 00:15:08,760 Speaker 1: speaking to Bloomberg's In the City podcast with David Merritt 284 00:15:08,760 --> 00:15:11,520 Speaker 1: and Francine Laqua. They've also been talking about the outlook 285 00:15:11,560 --> 00:15:12,600 Speaker 1: for the UK economy. 286 00:15:13,600 --> 00:15:17,960 Speaker 5: I think what we see in the UK more companies 287 00:15:18,120 --> 00:15:22,840 Speaker 5: are talking about efficiency and they're talking about quote unquote 288 00:15:22,960 --> 00:15:25,920 Speaker 5: right sizing. At the Conservative Party conference in Manchester, the 289 00:15:26,000 --> 00:15:29,880 Speaker 5: Chancellor of the Exchequer spoke about freezing civil service recruitment. 290 00:15:30,560 --> 00:15:33,560 Speaker 5: So those are signs we have to see how they 291 00:15:33,640 --> 00:15:34,520 Speaker 5: build or that. 292 00:15:34,600 --> 00:15:37,720 Speaker 10: Yeah, I think right, okay, the government is putting back 293 00:15:37,720 --> 00:15:40,800 Speaker 10: on hiring. You know, do you think corporate Britain and 294 00:15:40,840 --> 00:15:42,680 Speaker 10: corporate America hear those signals and think we've got to 295 00:15:42,680 --> 00:15:43,840 Speaker 10: slow down a hiring as well. 296 00:15:43,880 --> 00:15:46,000 Speaker 5: But I think people companies have been thinking about it 297 00:15:46,040 --> 00:15:48,240 Speaker 5: for quite some time. And you saw it in tech 298 00:15:48,360 --> 00:15:50,280 Speaker 5: very earlier this year, much earlier this year. 299 00:15:50,120 --> 00:15:51,760 Speaker 10: And you're thinking about it at parties. 300 00:15:52,320 --> 00:15:56,680 Speaker 5: Well, we always look at the efficiency of our operations 301 00:15:57,280 --> 00:16:00,000 Speaker 5: and so yes, we do think about it as well. Yeah, 302 00:16:00,080 --> 00:16:01,280 Speaker 5: you're way too optimistic. 303 00:16:01,440 --> 00:16:03,280 Speaker 11: I mean, Dave and I speak all the time and 304 00:16:03,400 --> 00:16:07,200 Speaker 11: I'm usually the optimist, and you're even more optimistic than me. 305 00:16:07,840 --> 00:16:11,440 Speaker 11: I don't see who's hiring when you look at businesses. 306 00:16:11,480 --> 00:16:13,760 Speaker 11: When you look at you don't talk about the government 307 00:16:13,760 --> 00:16:16,880 Speaker 11: maybe hiring less. I just don't understand how we're going 308 00:16:16,960 --> 00:16:17,720 Speaker 11: to grow from here. 309 00:16:18,400 --> 00:16:22,760 Speaker 5: So you're right that as people look at hiring itself, 310 00:16:23,720 --> 00:16:27,000 Speaker 5: that in the very very short term everybody is a 311 00:16:27,040 --> 00:16:31,200 Speaker 5: little more cautious. The two things to keep in mind 312 00:16:31,560 --> 00:16:34,440 Speaker 5: in the UK, to begin with, is that there was 313 00:16:34,480 --> 00:16:38,680 Speaker 5: a real structural supply shock in labor post to Brexit, 314 00:16:39,320 --> 00:16:42,320 Speaker 5: right where the labor four shrunk. And it wasn't that 315 00:16:42,480 --> 00:16:44,680 Speaker 5: long ago we were talking about people, and in fact 316 00:16:44,720 --> 00:16:46,800 Speaker 5: the Chancellor of the Exchequer spoke about it again in 317 00:16:47,440 --> 00:16:51,320 Speaker 5: the UK. We were talking about people who were retiring 318 00:16:51,360 --> 00:16:54,200 Speaker 5: early and the impact it's having on benefits people who 319 00:16:54,240 --> 00:16:56,320 Speaker 5: should be able to work, but we're not willing to 320 00:16:56,320 --> 00:16:59,520 Speaker 5: write resignation. So it wasn't that long ago we were 321 00:16:59,520 --> 00:17:03,280 Speaker 5: talking about. So I think our mood gets amplified one 322 00:17:03,280 --> 00:17:06,120 Speaker 5: way or the other, right, And so I wouldn't sort 323 00:17:06,119 --> 00:17:09,320 Speaker 5: of say so, Francine, I rarely would disagree with you, 324 00:17:09,720 --> 00:17:12,600 Speaker 5: So I wouldn't say that I'm optimistic. Perhaps I'm a 325 00:17:12,640 --> 00:17:14,000 Speaker 5: little calmer than I should. 326 00:17:13,800 --> 00:17:17,800 Speaker 10: Be, so very very calm indeed't it? What about the 327 00:17:17,840 --> 00:17:20,600 Speaker 10: whole banking industry as a whole? In your industry, I mean, 328 00:17:20,880 --> 00:17:23,320 Speaker 10: as Fancy said, it's been an unbelievable couple of years. 329 00:17:23,400 --> 00:17:25,320 Speaker 10: But you know who would have predicted Credit Swiss would 330 00:17:25,359 --> 00:17:28,359 Speaker 10: cease to exist. They've had the SVB to Baccarada this year. 331 00:17:28,440 --> 00:17:30,280 Speaker 10: I mean, how does the industry fail? 332 00:17:30,320 --> 00:17:30,560 Speaker 11: For you? 333 00:17:30,640 --> 00:17:33,160 Speaker 10: At the moment, it feels a little bit like it's 334 00:17:33,240 --> 00:17:35,080 Speaker 10: perilous times for banks. 335 00:17:35,160 --> 00:17:38,639 Speaker 5: It depends on where in the industry you ask that question, 336 00:17:39,440 --> 00:17:43,480 Speaker 5: and I think the large banks, the megabanks, banks like Barclays, 337 00:17:44,200 --> 00:17:46,719 Speaker 5: the g ciphies, the money center banks in the US 338 00:17:47,359 --> 00:17:52,120 Speaker 5: have all spent a number of years improving their capital, 339 00:17:52,760 --> 00:17:58,199 Speaker 5: increasing their liquidity, managing their risks more carefully, and we 340 00:17:58,400 --> 00:18:01,040 Speaker 5: all feel in a better place because of that. Now, 341 00:18:01,440 --> 00:18:04,320 Speaker 5: the latest rules on Basel three point one caused some 342 00:18:04,400 --> 00:18:07,800 Speaker 5: amount of nerves among people, but it's coming at a 343 00:18:07,840 --> 00:18:10,280 Speaker 5: time when we are all well capitalized, and none of 344 00:18:10,320 --> 00:18:13,640 Speaker 5: the very big banks were being called into question this year. 345 00:18:14,359 --> 00:18:19,240 Speaker 5: What you had was therefore, other pockets. One is fintech, 346 00:18:20,040 --> 00:18:22,520 Speaker 5: where obviously there was a business model which was based 347 00:18:22,560 --> 00:18:25,120 Speaker 5: on cheap money, which is getting tested and they've got 348 00:18:25,119 --> 00:18:29,600 Speaker 5: to show real profitability. And ultimately size catches up with 349 00:18:29,640 --> 00:18:31,399 Speaker 5: you in some of these smaller firms, because do you 350 00:18:31,480 --> 00:18:34,800 Speaker 5: have the ability to put in all the systems? Do 351 00:18:34,840 --> 00:18:36,920 Speaker 5: you put in all the checks and balances in terms 352 00:18:37,000 --> 00:18:40,520 Speaker 5: of KYC money laundering and so on? And you see 353 00:18:40,560 --> 00:18:45,040 Speaker 5: that about certain firms, and then in the US regional 354 00:18:45,080 --> 00:18:48,680 Speaker 5: banks where they were of a certain size, now where 355 00:18:48,720 --> 00:18:50,600 Speaker 5: if they creep up to about one hundred billion dollars 356 00:18:50,640 --> 00:18:54,000 Speaker 5: they get caught in the regulatory net. And of course 357 00:18:54,000 --> 00:18:56,440 Speaker 5: there was an asset liability issue which came to the 358 00:18:56,480 --> 00:19:01,200 Speaker 5: four in February March. Credit Sueez occupies a different part 359 00:19:01,240 --> 00:19:04,000 Speaker 5: of this universe. It was a bank that was having 360 00:19:04,320 --> 00:19:08,080 Speaker 5: difficulty coming into this year. And if you had said 361 00:19:08,080 --> 00:19:11,399 Speaker 5: to people in January of this year that credit space 362 00:19:11,440 --> 00:19:13,880 Speaker 5: might have difficulty in twenty twenty three, I think people 363 00:19:13,920 --> 00:19:16,159 Speaker 5: would have accepted it because we knew that they were 364 00:19:16,200 --> 00:19:19,639 Speaker 5: dealing with deep structural issues. The others were more surprising. 365 00:19:20,000 --> 00:19:22,920 Speaker 10: If you think about your business than now as it stands, 366 00:19:23,520 --> 00:19:25,760 Speaker 10: where are you most concerned about? You know, the IPO 367 00:19:25,840 --> 00:19:28,080 Speaker 10: market has been pretty deadly. You did get a great 368 00:19:28,119 --> 00:19:32,119 Speaker 10: mandate on ARM, as we did, but what does the 369 00:19:32,160 --> 00:19:34,800 Speaker 10: pipeline look like, I mean, particularly in investment banking. 370 00:19:35,040 --> 00:19:39,200 Speaker 5: Yeah, I mean there is a sentimentality or sentiment driven 371 00:19:39,320 --> 00:19:42,640 Speaker 5: aspect to that pipeline. I would have said a month 372 00:19:42,640 --> 00:19:46,800 Speaker 5: ago in early September, especially with ARM Instacart coming, people 373 00:19:46,880 --> 00:19:51,440 Speaker 5: were a little hopeful. Interest rates have risen since then, 374 00:19:52,040 --> 00:19:54,880 Speaker 5: and those IPOs themselves have traded off a bit from 375 00:19:54,920 --> 00:19:58,200 Speaker 5: their initial peak, so people are cautious about the IPO market. 376 00:19:58,280 --> 00:20:00,800 Speaker 5: Sentiment has to come back for that because it's a 377 00:20:00,840 --> 00:20:03,520 Speaker 5: fundamental driven thing in terms of the build up to 378 00:20:03,640 --> 00:20:06,639 Speaker 5: the decision to do an IPO, but the timing is 379 00:20:06,720 --> 00:20:11,480 Speaker 5: sentiment driven. So I think if you look at it overall, 380 00:20:12,080 --> 00:20:14,840 Speaker 5: there is a challenge in the banking environment. Number One, 381 00:20:15,520 --> 00:20:19,800 Speaker 5: you've got deal flow which increased very slightly at the 382 00:20:19,800 --> 00:20:23,840 Speaker 5: start of September, still looking that the revival is looking 383 00:20:23,880 --> 00:20:27,680 Speaker 5: a little further away. I'm still hopeful by the way 384 00:20:28,080 --> 00:20:30,520 Speaker 5: that if things settle down, deal flows come back. So 385 00:20:30,560 --> 00:20:32,880 Speaker 5: I think you need to look through this period. You've 386 00:20:32,920 --> 00:20:36,159 Speaker 5: got interest rates which are peaking. For a bank, it 387 00:20:36,200 --> 00:20:39,000 Speaker 5: would lead to a peaking in net interest margins, and 388 00:20:39,040 --> 00:20:42,199 Speaker 5: then market volatility, which is there but less than it 389 00:20:42,320 --> 00:20:44,720 Speaker 5: used to be, which will obviously impact the way you 390 00:20:44,760 --> 00:20:46,720 Speaker 5: think longer term about trading revenues. 391 00:20:48,520 --> 00:20:51,200 Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the 392 00:20:51,240 --> 00:20:54,320 Speaker 1: stories making news from London to Wall Street and beyond. 393 00:20:54,440 --> 00:20:57,240 Speaker 1: Look for us on your podcast feed every morning on Apple, 394 00:20:57,359 --> 00:21:00,760 Speaker 1: Spotify and anywhere you've get your podcasts. Also listen live 395 00:21:00,840 --> 00:21:04,520 Speaker 1: each morning on London Dab Radio, Bloomberg Business App, and 396 00:21:04,640 --> 00:21:07,680 Speaker 1: Bloomberg dot Com. 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