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

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Speaker 2: This is the Blueberg day Bag.

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Speaker 3: You're podcast Good morning, It's Monday, the thirteenth of July.

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Speaker 3: I'm Caroline hepkea in London and.

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Speaker 1: I'm Stephen Caroline Brussels. Coming up today a straight standstill.

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Speaker 1: Traffic through hor Moves once again slows to a trickle

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Speaker 1: as the US and Iran trade fresh strikes.

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Speaker 3: European countries report thousands of deaths linked to this year's

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Speaker 3: record breaking heat waves.

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Speaker 1: Plus Burnham considers going big. The UK's soon to be

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Speaker 1: Prime minister contemplates a bumper budget later this year.

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

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Speaker 1: The United States has attacked Iran for the fourth time

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Speaker 1: in a week, with Tehran once again launching strikes and

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Speaker 1: retaliation across the Middle East. The US military says it

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Speaker 1: bombed dozens of Iranian targets, including air defense systems and

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Speaker 1: coastal radar sites. Iran State News agency says the country's

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Speaker 1: retaliatory operations are continuing, with reports of attacks on Jordan's

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Speaker 1: Prince Hassan airbase and on commercial ships. Tehran also claims

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Speaker 1: the Strait of Hormuz is now closed speaking to ABC's

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Speaker 1: This Week program, US Ambassador to the UN Mike Woltz

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Speaker 1: says Iran is attempting to hold the world hostage.

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Speaker 4: Think Iran is still very much of the mindset that

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Speaker 4: it can use the global economy as some type of leverage.

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Speaker 4: We've not just the United States, but we've said here

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Speaker 4: at the United Nations, one hundred and forty three nations

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Speaker 4: have stood together and said what Iran is doing is

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Speaker 4: in violation of international law. Regardless of whether your party

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Speaker 4: to some conflict, you cannot start shooting in all directions,

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Speaker 4: attacking your neighbors, attacking civilian shipping.

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Speaker 1: Mike Well spoke to ABC as there was almost no

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Speaker 1: visible traffic in the Straight offmus today, despite US insistence

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Speaker 1: that the waterway remains open. Data analyzed by bloom showed

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Speaker 1: six commodity carriers traveling through the Straight on Sunday, all

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Speaker 1: with their transponders turned off.

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Speaker 3: The latest strikes in the Middle East have revived concerns

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Speaker 3: that higher energy prices will keep inflation elevated and rates

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Speaker 3: higher for longer. Brent Krude climbed close to eighty dollars

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Speaker 3: a barrel as treasuries dropped across the curve. Meanwhile, the

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Speaker 3: dollar strengthened against its peers on speculation that the US

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Speaker 3: Federal Reserve will now be forced to raise rates to

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Speaker 3: cool inflationary pressure. With all eyes now on the latest

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Speaker 3: USCPI reading out tomorrow. That also made non yielding precious

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Speaker 3: metals less appealing, sending gold and silver lower.

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Speaker 1: Europe recorded more than ten thousand excess deaths during the

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Speaker 1: record breaking heat wave at the end of June. Data

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Speaker 1: from monitoring service Urumomo shows the vast majority of those

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Speaker 1: were among people aged sixty five and above. It comes

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Speaker 1: as a separate study shows heat waves may have led

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Speaker 1: to over two thousand, seven hundred debts in England in

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Speaker 1: Wales alone. Doctor Claire Bien from Imperial College London is

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Speaker 1: co author of the report.

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Speaker 5: We know for a fact that the number of people

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Speaker 5: dying during heat waves will continue to increase as long

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Speaker 5: as the number and the intensity of heat waves continue

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Speaker 5: to increase, and that will continue to be the case

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Speaker 5: as long as we keep putting fossil fuels into the

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Speaker 5: atmosphere and keep increasing global warming.

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Speaker 1: Barnes's comments were echoed by the WHL, which warned that

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Speaker 1: extreme temperatures are a quote dress rehearsal for what's to come.

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Speaker 3: Andy Burnham is considering a mega fiscal event should he

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Speaker 3: come to power, buttons presumed next Prime Minister is being

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Speaker 3: lobbied by allies to look at a land tax and

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Speaker 3: public ownership of utilities. Labour MP miatafan Bula tells the

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Speaker 3: BBC that the new administration needs to do more than

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Speaker 3: the previous one.

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Speaker 6: It's unprecedented to have had a decade and a half

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Speaker 6: in which people's living standards have been squeeze. Pay packets

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Speaker 6: are flat lined and the cost of essentials are rising.

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Speaker 2: People at breaking points.

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Speaker 6: And so for me my criticism was yes, change, but

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Speaker 6: the pace and scale of it needs to be much

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Speaker 6: greater to meet the demand of the country. That's certainly

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Speaker 6: what I heard from my constituents and that's the thing

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Speaker 6: I think we have to address going forward.

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Speaker 3: Van Booler is one of the politicians working on Burnham's

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Speaker 3: economic policy. Burnham is on course to take over from

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Speaker 3: Keir Starmer next Monday by his top team, and policy

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Speaker 3: plans are mostly unknown.

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Speaker 1: Staying in the UK police say they've arrested a twenty

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Speaker 1: eight year old man on suspicion of the murder of

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Speaker 1: former minister and reformer UK politician Anne Where to come

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Speaker 1: Devil and Cornwell Police as Matthlanman is the Assistant Chief

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Speaker 1: Constable leading the operation.

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Speaker 7: At this point, there is still no information to suggest

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Speaker 7: that this is a terrorism related incident and at this

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Speaker 7: point we are not looking for anyone else in connection

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Speaker 7: with this murder. We retain primacy of this investigation and

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Speaker 7: detectives remain open minded about the potential motive.

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Speaker 2: Stage.

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Speaker 7: There is nothing to suggest that was politically motivated.

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Speaker 1: System costiler Matt Langman. There British plantations have reacted with

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Speaker 1: shocked to where it comes death.

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Speaker 2: The seventy eight.

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Speaker 1: Year old Foreign minister served in the nineteen nineties before

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Speaker 1: later leaving the party and joining the populist right wing

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Speaker 1: Reform UK.

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Speaker 3: Three prominent artificial intelligence developers release new models in the

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Speaker 3: past week, and while they promised to be more advanced,

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Speaker 3: all three are emphasizing reduced costs with more here's Bloomberg's

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Speaker 3: Uwan parts.

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Speaker 8: Only a few months ago, firms were encouraging employees to

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Speaker 8: outdo one another by using as much AI as possible,

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Speaker 8: but as more and more companies bulk at the resulting bills,

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Speaker 8: AI developers are stressing not just the power but also

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Speaker 8: the efficiency of THEIRNUE models. Opening says GBT five point

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Speaker 8: six completes more work while using significantly fewer tokens. GROCK

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Speaker 8: four point five from Elon Musk's space Xai is built

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Speaker 8: as having twice a token of vision its comparel models

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Speaker 8: from other firms a metaboss Mark. Zuckerberg recently told Bloomberg

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Speaker 8: that the pricing for its must Spark at one point

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Speaker 8: one is very attractive in London.

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Speaker 2: I'm you and pots to Bloomberg Radio. Those are top

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Speaker 2: storys for you today.

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Speaker 3: Sovereign yields, rising equities tumbling with what's happening in the

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Speaker 3: Middle East. The All Country World Index is currently down

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Speaker 3: by three tens of one percent. Brain Crew price is

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Speaker 3: up four and a half percent, trading at seventy nine

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Speaker 3: dollars forty three. The dollar also strengthening on the Blueberg

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Speaker 3: Dollar spotlighted egs up a tenth of one percent. European

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Speaker 3: stock futures have dropped today, are down one percent right

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Speaker 3: now SMB five hundred EVENI futures also down six tens

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Speaker 3: of one percent. We're also back to these major swings

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Speaker 3: on the Cosby in South Korea currently down by seven

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Speaker 3: point five percent this morning, sk Heinex plunging almost fifteen percent,

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Speaker 3: two year treasury yields also hitting a sixteen month high,

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Speaker 3: so currently trading at four point five eight percent, up

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Speaker 3: by two basis points, and gold bullion prices are also slumping,

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Speaker 3: so trading at four thousand and sixty nine dollars.

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Speaker 2: Those are the markets.

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Speaker 1: In a moment, we'll bring you more on those latest

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Speaker 1: US strikes on Iran, plus how the surgeon oil prices

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Speaker 1: is causing a dilemma for the EU's sanctions on Russia.

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Speaker 1: What another story that caught our eye this morning. If

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Speaker 1: you're thinking about what you're going to read on the plane, train,

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Speaker 1: or beach in the coming weeks, thinking wistfully about your

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Speaker 1: summer holidays. Adam Riema has a selection of some top

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Speaker 1: reads about money from the Bloomberg Money newsletter. Inspired by

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Speaker 1: the success of Bell Burdens Stranger, a memoir of divorce

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Speaker 1: and financial betrayal that apparently is wrecking up huge sales

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Speaker 1: in the US now, he says that reading books about

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Speaker 1: money can be a good time to perhaps take some

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Speaker 1: of the longer term view on ideas like what money

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Speaker 1: really means? To you, what are the convictions that drive

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Speaker 1: your financial habits and what exactly are you trying to

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Speaker 1: achieve by working so hard? Caroline, that's the point.

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Speaker 3: Yeah, well listen. Bell Burden's book is a huge hit

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Speaker 3: in London as well. The plenty of people are reading it,

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Speaker 3: although fewer who you know, have them maybe sixty million

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Speaker 3: dollars that she had and was trying to protect in

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Speaker 3: that sort of terrible tale. No, I think the recommendations

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Speaker 3: are really interesting. One that made me rather nostalgic Stephen

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Speaker 3: Susie Orman. Of course, she was, you know, in her

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Speaker 3: US Heyday USTv Heyday, teaching women how to be wealthy

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Speaker 3: women that being financially strong and independent could kind of

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Speaker 3: be married with purpose and happiness and generosity to other people. Yeah,

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Speaker 3: loads of great recommendations in this list.

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Speaker 2: Yeah, certainly.

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Speaker 1: I mean it kind of open some interesting cultural questions

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Speaker 1: as well about your askit you to money? Do you

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Speaker 1: want to be thinking about money while you're on your holidays?

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Speaker 1: Always you're right to be just thinking about you know,

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Speaker 1: what you're going to do this afternoon, or when when

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Speaker 1: you might be able to squeeze in a nap between

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Speaker 1: other commitments.

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Speaker 2: You know it depends.

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Speaker 3: If the cocktails are all inclusive or not.

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Speaker 2: As my answers to.

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Speaker 1: That, different financial calculations happening there as well. We'll put

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Speaker 1: a link to the Bloomberg Money newsletter in our podcast

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Speaker 1: show Notes. Let's turn back to our top story this

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Speaker 1: morning and bring you the latest on events in the

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Speaker 1: Middle East. After the another round of US strikes we've

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Speaker 1: seen on Iran overnight and retaliation coming from Tehran as well.

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Speaker 1: Stuart Livingston Wallace, who heads our coverage of the Middle

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Speaker 1: East and North Africa, joins us now for more. Stuart,

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Speaker 1: what do we know then about this latest round of

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Speaker 1: strikes and the response from Iran?

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Speaker 9: I mean, it feels in much the same vein as

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Speaker 9: we've seen the last several days, except I would say

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Speaker 9: it does appear to have been an escalation, particularly from

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Speaker 9: the US side. So I think day one of the

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Speaker 9: sort of the current round of ter and fro was

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Speaker 9: sort of something like eighty targets, and it was ninety

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Speaker 9: targets now, and then it was one hundred and forty targets.

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Speaker 9: We don't have a number for the most recent round,

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Speaker 9: but the direction of travel is sort of upwards and

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Speaker 9: that obviously poses some deep concerns from that side, and

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Speaker 9: then from the others. Qait and Bahrain has sort of

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Speaker 9: periodically been the targets for the retaliation, and then that

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Speaker 9: expanded now to Jordan, you know, and Katar I think

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Speaker 9: as well, and there were alerts elsewhere in the region.

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Speaker 9: So it feels like an escalation from that side. Now,

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Speaker 9: I must underline that it is nothing like what we

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Speaker 9: saw in the first month or two of the war,

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Speaker 9: but it is nonetheless a very concerning trend. And there

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Speaker 9: doesn't appear to be an obvious exit ramp for either side.

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Speaker 3: Indeed, And so what is the situation in the Strait

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Speaker 3: of hor Moves? I mean, all prices are going up.

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Speaker 3: One side says that the strait is closed. What do

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Speaker 3: we know about it?

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Speaker 9: It's a really good question. I mean I don't have

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Speaker 9: a good answer. I mean I've sort of somewhat flippantly

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Speaker 9: been telling people the only way you're going to know

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Speaker 9: with any certainty what's going through hor Moves is to

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Speaker 9: sit on the shoreline with a pair of binoculars. Because

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Speaker 9: here's the problem. Most of the ships going through, or

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Speaker 9: certainly many of the ships going through, have their transponder

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Speaker 9: shot off. And what that effectively means is that we

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Speaker 9: lose visibility on where they are, and that means that

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Speaker 9: often we're not picking up on the fact that they've

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Speaker 9: transitted until probably several days after they've gone through. So

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Speaker 9: to have a day to day snapshot of the traffic

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Speaker 9: through there is pretty much impossible. Both sides are obviously

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Speaker 9: coming out with different lines about what's going through. The Americans,

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Speaker 9: I think most recently said twenty ships are transitated. Yesterday,

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Speaker 9: Iran says the whole thing shut. I suspect the truth

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Speaker 9: is somewhere in between, but I don't have a definitive

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Speaker 9: answer for just what is going through. What I will say,

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Speaker 9: which sounds fairly self evident, is that you're going to

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Speaker 9: have to be a very brave captain to navigate your

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Speaker 9: vessel through that straight right now because of the amount

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Speaker 9: of firepower in the region and that is being utilized.

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Speaker 2: Sores.

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Speaker 1: In the context of all of that, I mean, what

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Speaker 1: does this escalation of strikes mean for the prospect of

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Speaker 1: any peace Sougs.

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Speaker 9: Yeah, again, a difficult one to answer. I mean, I

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Speaker 9: think we can still say with a degree of certainty

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Speaker 9: that the US, in particular, I think is eager for

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Speaker 9: some sort of dast arn't largely. I suppose a function

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Speaker 9: of gasoline prices, the midterms coming up, and then again

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Speaker 9: being no obvious way of winning this war completely. You know,

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Speaker 9: I think it's unlikely you're going to get total capitulation

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Speaker 9: from Iran, and then from the Iranian side, you know,

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Speaker 9: as I've said before, they've discovered this wonderful new leverage

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Speaker 9: over the world economy with you know, the threatening of

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Speaker 9: commercial shipping through Haull moves, and it's pretty clear that

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Speaker 9: they're not going to be willing to give that up

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Speaker 9: anytime soon. And so you sort of have this basical

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Speaker 9: an impasse between the two sides, and Iran is basically

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Speaker 9: working on the assumption that it's pain threshold, or its

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Speaker 9: willingness to absorb pain, is going to be a great

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Speaker 9: deal higher than the US and seems to be going

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Speaker 9: down that path.

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Speaker 10: Yeah.

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Speaker 3: Absolutely, so those US Iranian attacks persist and the uncertainty

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Speaker 3: does too set. Thank you so much for well doing

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Speaker 3: your best answer some of those very difficult questions, do it.

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Speaker 3: Livingston Wallets, who heads our coverage of the Middle East

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Speaker 3: and North Africa, thank you.

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Speaker 2: Stay with us. More from Bloomberg daybakeuope coming up after this.

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Speaker 1: Well here in Brussel's European foreign ministers will be grappling

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Speaker 1: with the developments in the Middle East when they meet

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Speaker 1: this morning. They're also going to be discussing the latest

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Speaker 1: sanctions package on Russia and our Brussels buroitys A Linch

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Speaker 1: is with me in studio for more. Now, Suzann, what

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Speaker 1: should we expecting to hear from ministers on the Iran war?

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Speaker 1: This is a conflict they've largely opposed, but they've suffered

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Speaker 1: the consequences of higher energy prices.

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Speaker 2: Absolutely.

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Speaker 10: I mean, the Europeans have been dramatically affected by this

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Speaker 10: war that's obviously much more, much closer geographically than it

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Speaker 10: is to the US. But I think the sense has

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Speaker 10: been that they want to keep out of this, it's

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Speaker 10: not their war. At the same time, their language is

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Speaker 10: quite careful here. I mean last week at the Natio summit,

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Speaker 10: we saw Mark Rutte, the National Secutary General, besides Trump,

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Speaker 10: saying that he believed these US attacks on Iran were justified.

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Speaker 10: For example, we had the E three powers at Germany,

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Speaker 10: France in the UK the weekend calling for swift resumption

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Speaker 10: of commercial shipping in the straightform use and condemning Iranian

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Speaker 10: strikes in the area. So I think they're trying to

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Speaker 10: facilitate some kind of resumption of the ceasefire. The European

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Speaker 10: economy was already impacted by this by high energy prices

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Speaker 10: on individuals, on households and businesses, and this resurgence of

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Speaker 10: activity now is a real concern economically for the block.

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Speaker 3: Yeah, okay, so there is a worry about what's happening

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Speaker 3: in the Middle East. But then ministers will also be

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Speaker 3: discussing more sanctions on Russia over the war in Ukraine,

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Speaker 3: as it seems there are preparations starting for winter for

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Speaker 3: further conflict. Now this also includes the price cap on

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Speaker 3: Russian oil that ministers are going to discuss. What is

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Speaker 3: at stake there.

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Speaker 10: Yes, so the twenty first sanctions package is the lazist

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Speaker 10: package of successive sanctions that the EU has introduced against Russia.

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Speaker 10: But negotiations on the details of that have been ongoing

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Speaker 10: behind the scenes here in Brussels now for weeks. And

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Speaker 10: over the weekend you had a kind of a very

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Speaker 10: good example of EU policymaking at work. You had ambassadors

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Speaker 10: hold up for an extra meeting on Sunday to try

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Speaker 10: and get agreement on this twenty first Actions package and

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Speaker 10: they fail to. They have still not got agreement on

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Speaker 10: the details of that. Now there are various aspects to that.

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Speaker 10: There is the Russian oil cap and that's the at

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Speaker 10: the moment crude oil the cap it's just over forty

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Speaker 10: four dollars per barrel, but that's set to increase on

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Speaker 10: July fifteenth if a decision is not made on that,

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Speaker 10: So that is, you know, ministers today would be under

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Speaker 10: pressure to do something on that. You've also got other

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Speaker 10: aspects of that package. For example, there is a proposal

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Speaker 10: to ban Russian soldiers from entering the EU. You some

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Speaker 10: countries pushing for that, but others wanting that I suppose

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Speaker 10: water down in a sense maybe just short term visas,

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Speaker 10: et cetera. And there are other elements to do with

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Speaker 10: fish imports that now some countries are impacted by. So

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Speaker 10: we're going to be watching closely today to see A.

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Speaker 2: Will there be agreement and b if.

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Speaker 10: There is an agreement by foreign ministers, and if they

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Speaker 10: do discuss it, how water down effectively will this package be.

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Speaker 1: This is on another issue that's related to this that's

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Speaker 1: not included in this sanctions package, but it is something

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Speaker 1: that's topic of conversation, particularly since Ireland took over the

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Speaker 1: rotating presidency of the Council on the first of July,

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Speaker 1: and that's the potential for sanctions over alumina exports that

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Speaker 1: go from Ireland to Russia.

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Speaker 10: That's right, There is a huge smelter of the on

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Speaker 10: the west coast of Ireland organist alumina, which is one

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Speaker 10: of the I suppose the rare heavy industries that are

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Speaker 10: still there in Ireland to Ireland is obviously developed its

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Speaker 10: economy through through tech as services industry exam for example,

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Speaker 10: but this organised alumina, it now has emerged. The arch

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Speaker 10: Times reported this over the last few weeks that it

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Speaker 10: is exporting alumina raw material that's used in Russian weaponry.

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Speaker 10: Now the problem, of course is this illumina that's been

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Speaker 10: exported from here is also used in other things across Europe.

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Speaker 10: So again it's a tricky balance. And actually this came

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Speaker 10: up back around twenty and eighteen twenty nineteen, when the

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Speaker 10: US wanted to sanction aleg Deris Pasco, who is a

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Speaker 10: shareholder and one of the companies controlling the plant, and

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Speaker 10: also those aluminum and steel sanctions from the US back

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Speaker 10: and that time. So it's now research as a problem

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Speaker 10: now for Ireland. Some countries want this to be included

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Speaker 10: in the next sanctions package, as you said there, Steve,

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Speaker 10: and it's not in this twenty first sanctions package. The

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Speaker 10: Irish government would be under pressure on this in the

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Speaker 10: next sanctions package. The status now is is that the

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Speaker 10: Irish authorities are doing an investigation into this. The European

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Speaker 10: Commission will then look at that and then they will

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Speaker 10: have a discussion about whether to include this alumina in

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Speaker 10: the next round of sanctions from.

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Speaker 2: Brussels last c Susan.

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Speaker 3: There is also another possible sanctions package or measures, certainly

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Speaker 3: that the EU is also weighing when it comes to

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Speaker 3: trade with Israeli settlements. How important is that? How much

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Speaker 3: discussion is there about it?

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Speaker 10: Yeah, Look, there's been growing pressure on the EU to

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Speaker 10: do something about the trade that comes from these illegal

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Speaker 10: Israeli settlements, and the Commission, the European Commission, the EU's

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Speaker 10: executive branch, brought forward a proposal this last week. Now

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Speaker 10: there's a kind of a very EU row about whether

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Speaker 10: you need unanimous agreement to agree that or whether it

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Speaker 10: can be pushed through by qualified majority voting the European Commission,

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Speaker 10: and frankly, countries that are opposed to this idea are

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Speaker 10: saying you need unanimous agreement, which means this will probably

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Speaker 10: not get agreed anytime soon. The reality is the EU

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Speaker 10: European countries are divided on this. You've got some countries

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Speaker 10: who think that you should be taking a stronger stance

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Speaker 10: against Israel, but you have other countries. Germany is one,

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Speaker 10: for example, Czech Republic is another who are more resistant

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Speaker 10: to come out and do something dramatic against Israel, particularly

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Speaker 10: on the trade front.

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Speaker 2: So we do expect a.

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Speaker 10: Lot of discussion on that today, very few decisions.

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