September 16, 2025 • 21 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) US President Donald Trump expects to announce economic deals totaling more than $10 billion during his trip this week to the United Kingdom, senior US officials said Monday.
(2) Prime Minister Keir Starmer has suffered a third forced departure from his government in less than two weeks as one of his senior advisers resigned amid media allegations about his past conduct.
(3) President Donald Trump said he would speak with Chinese leader Xi Jinping on Friday as US and Chinese officials reached a framework deal on keeping the TikTok app running in the US.
(4) Donald Trump’s economic adviser Stephen Miran is on his way to joining the Federal Reserve board after the Senate confirmed him to the post in a vote Monday evening.
(5) Overseas investors are slashing their dollar exposure at “an unprecedented pace” as they put on currency hedges when buying US stocks and bonds, according to a Deutsche Bank AG analysis of exchange-traded funds.
(6) Wall Street’s main regulator said it is “prioritizing” a proposal from Donald Trump to reduce the frequency of corporate earnings reports, after the president again stepped into a long-running debate over transparency in American capitalism.
(7) Top dealmakers from global investment banks have been heading to Zurich in recent weeks to pitch UBS Group AG on transactions that could change the face of Swiss finance.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the bloom Big Day Break you at podcast.
Good morning, It's Tuesday, the sixteenth of September. I'm Caroline
Hepga in London.
Speaker 1 (00:16):
And I'm Stephen Caroline Brussels. Coming up today, Carostarmer rolls
out the red carpet as Donald Trump expects to announce
deals worth more than ten billion dollars during his state
visit to the UK.
Speaker 2 (00:28):
An appeals court blocked the US President's efforts to fire
Federal Reserve Governor Lisa Cook ahead of tomorrow's interest rate decision.
Speaker 1 (00:37):
Plus more capital or a new headquarters abroad? Could UBS
really take the nuclear option in its showdown with the
Swiss government.
Speaker 2 (00:46):
Let's start with a roundup of our top stories.
Speaker 1 (00:48):
Economic deals totaling more than ten billion dollars are expected
to be announced during US President Donald Trump's state visit
to the UK, which begins later today. It comes as
London's Final Sector called on the government to go further
to attract private investment into British assets. Bloomberg's teaa adebio has.
Speaker 3 (01:07):
More a science in technology partnership, plans to build nuclear
power stations and deeper financial connections just some of the
goods on offer to the UK. As Donald Trump's US
delegation prepares to visit, But whilst Kirs Starmer gears up
to host discussions with the President in the English countryside,
the country's financial hub is calling for change. According to
(01:31):
a City of London Corporation report, the UK faces one
hundred and fifty billion pounds in unmet funding needs over
the next five years. The financial district's governing body are
calling for measures to steer pension capital into UK equities.
This just weeks ahead of an autumn budget that economists
widely expect to hike taxes to fill a fiscal hole.
(01:55):
In London, Tiwa ad a bio Bloomberg radio.
Speaker 2 (01:58):
Well saying in the UK, the Prime Minister Kis Starmer
has lost a third key ally from government in less
than two weeks. Starmer's director of strategy, Paul Ovenden, resigned
after sexually explicit comments he made in twenty seventeen were
published by ITV News. The senior advisor's exit comes after
Starmer lost both his deputy Prime Minister and ambassador to
(02:22):
the United States over separate scandals. In his first public
comments since he fired ambassador Peter Mandelson. The Prime Minister,
says that Mandelson's ties to Jeffrey Epstein made his position untenable.
Speaker 4 (02:37):
Had I known then what I know now, i'd never
appointed him, because what emerged last week were emails Bloomberg
emails which showed that the nature and extent of the
relationship that Peter Mandelson had with Epstein was far different
to what I had understood to be the position.
Speaker 2 (02:59):
But Starmer's decision is likely to be a sore point
doing Trump's visit, given the US leader's own struggle to
move on from questions about his ties to Epstein. The
loss of so many senior figures in a short time
in the UK is leading some to question how stable
Starmer's own position is despite his large majority in Parliament.
Speaker 1 (03:21):
A growing number of economists believe the Bank of England
has finished cutting interest rates as it grapples with a
fresh spike in inflation. Figures you out tomorrow are expected
to show inflation peaking at four percent this month, double
the bank's target. Membrooks, Freddie Filston has more.
Speaker 5 (03:35):
Economists surveyed by Bloomberg say they believe the BOE will
keep rates at four percent for the foreseeable future. The group,
which includes Santander, Schroeders and others, unanimously believes rates will
stay on hold this Thursday. The prospect of limited further
rate cuts or none at all, will pile further pressure
(03:58):
on Chancellor Rachel Reeves, who businesses blame for fueling inflation
with her twenty six billion pound tax hike on employers
in London. Freddie Fulston Bloomberg Radio Now.
Speaker 2 (04:10):
Officials from the US and China have reached a framework
on keeping TikTok running in the United States. The deal
was reached during talks in Madrid, with Treasury Sectary Scott
Bessen confirming a plan for US ownership of the app.
CBS News reports that Oracle is among a group of
firms that could enable TikTok operations to continue. The framework
(04:32):
sets these stage for a phone call on Friday between
President Trump and President Hijinping. Donald Trump spoke to reporters
in the Oval Office.
Speaker 6 (04:41):
It's important and it can maybe even bring us closer
to channel.
Speaker 4 (04:46):
We had a very good meeting with John.
Speaker 2 (04:47):
I was surprised.
Speaker 7 (04:48):
I didn't expect it to that extent, and I'm going
to speak again with President Chi on.
Speaker 1 (04:53):
Friday, and you know, I think I think that'll confirm
things up.
Speaker 2 (04:57):
That was President Trump speaking there. China's Comma Ministry called
the deal a consensus, though some technical hurdles remain. The
breakthrough could unlock a long awayed Trump Gee summit at
an Asia Pacific Corporation Forum in South Korea, which will
take place at the end of next month.
Speaker 1 (05:16):
The Federal Appeals Court has rejected President Trump's bid to
unseat the FED Governor Lisa Cook ahead of the rate
setting meeting. The ruling makes it more likely that Cook
will take part, although Trump could still ask the Supreme
Court to intervene. Meanwhile, the Senate confirmed Stephen Myron is
a FED governor. It'll pave the way for Myron, who's
currently Trump's economic advisor, to join the policymakers. Here is
(05:38):
Bloomberg's Katarina Sarreva.
Speaker 7 (05:41):
We haven't seen a huge market reaction yet, you know,
even when he was first nominated by the President, there wasn't,
you know, some massive reaction. And that's kind of been
kind of interesting, right People have thought that maybe we
would see a bigger reaction now. Maybe part of that
is because he is just one role, you know, out
(06:03):
of twelve on the Federal Open Market Committee, so he's
alone is not going to change inter streight policy.
Speaker 1 (06:11):
That's Bloomberg's Katerina Sarava. Myron has said that he would
take leave from his role as chair of the White
House Council of Economic Advisors, but not resign. It'll be
the first time in ninety years that are sitting White
House official will have a role in setting monetary policy.
Speaker 2 (06:26):
Elsewhere, Deutsche Bank says that international investors are slashing their
dollar exposure at an unprecedented pace through currency hedges for
US stock and bond purchases. The bank says that for
the first time this decade, flows into dollar hedged ETFs
that by US assets have exceeded those in unhedged funds.
(06:47):
Writing in a note to clients, Deutschebank's global head of
currency Research, Georgia sarr Velos, says that he believes this
explains why the dollar remains weak despite international investors plowing
money back into USS.
Speaker 1 (07:00):
Wall Street's main regulator says it's prioritizing President Trump's proposal
to reduce the frequency of corporate earnings reports. The SEC
says it's pursuing plans to quote further eliminate unnecessary regulatory
burdens on companies. It follows a social media post in
which Trump called for an end quarterly reports for investors.
Research Affiliates chair and founder Rob Arnett says the move
(07:22):
could increase companies long term focus.
Speaker 8 (07:25):
I'm a libertarian. I prefer to let people and businesses
do what they want. I think a requirement of every
three months fine. Lift the requirement. If a company wants
to report every six months, every twelve months, that's fine.
Publicly traded it out a report at least once in
a while, but a requirement for quarterly reporting increases short termism.
(07:47):
I've often said that I will never ever work for
a publicly traded company again. I've been saying that for
a quarter century, and the reason is regulatory distraction and
short termism.
Speaker 1 (08:00):
Search Affiliates chair and founder Rob Barnett. There As, supporters
of quarterly reporting say it's crucial for keeping investors informed
and reduces the chances of market manipulation.
Speaker 2 (08:10):
Those are our top stories for you this morning. Let's
look at the markets where you have very bullish stock traders.
Asian stocks hitting record high MSCI Asia Pacific indexes up
seven tenths of one percent, ten days of gains in
a row. The S and P five hundred above six
six hundred, again on a stellar run, the expectation of
a FED rate cut on Wednesday's softer labor market conditions
(08:34):
and no big inflationary surprises. Gold has also climbed to
due record this morning, three thousand, six hundred and eighty
three dollars. We're up by another almost two tenths of
one percent. Treasuries are steady today, two year yields hovering
near their lowest since last September. The dollars also sliding,
and we get US retail sales data later on today.
Those are the markets in a moment.
Speaker 1 (08:54):
More and what to expect from Donald trump state visit
to the UK, plus the options being considered by the
Swiss Bank UBS as it faces a massive increase in
capital requirements. Put another story that we've been reading this morning,
perhaps an optimistic spin on AI creativity. Karl, I feel
like you and I are the AI curmudgeons essentially in
this world. Move It's just me, but who worry about
(09:17):
thus being inundated with AI slot but Bradstone is the
editor of Bloomberg BusinessWeek. Has been writing about how the
AI generator content in social media in I suppose he's
looking at it from a boon in creativity point of
this is something you know. To be able to create
the great AI content, you still need to have imagination
to begin with. And he talks about one example, which
(09:38):
is this eight second clip of rabbits bouncing on a
trampoline outside made to look like grainy security footage. It's
in eight seconds one of them disappears, and this caused
a massive furori. I suppose we describe it as online
people got very excited about where was the rabbit? How
could it have disappeared? People guessing before it was flagged
(09:58):
as being AI generated, how it could have been done?
Speaker 2 (10:02):
And not just a few people. This is millions and million,
two hundred and thirty million times this little video has
been viewed around the world. Look, even I have been
sucked into watching these AI videos on TikTok and elsewhere.
I mean the talking babies phenomenon, yes, I think basically
(10:22):
sometimes quite drking dogs.
Speaker 1 (10:24):
There's talking dogs as well as the dog podcast. It's
called a podcast.
Speaker 2 (10:29):
I mean, they're cute, they're a bit creepy, they're a
bit weird. Yes, it is creative, but it also does
suck up a lot of time, doesn't it. And it's
advertising back to you.
Speaker 1 (10:38):
But I suppose the argument made by one of these
creators that spoke to Brad for this piece is is
this better than us just being marketed really fancy things
that make you feel bad about our lives. Wouldn't you
rather see a dog talk than feel bad that you
can't afford that, you know, car slash house, slash watch
slash holiday.
Speaker 2 (10:54):
Yeah, look, I have less qualms about it because of
course they're AI generated, so the babies and the dogs
are actually not real babies and dons. They don't belong
to anybody, so actually you're kind of you're not infringing
on their privacy. I suppose it's just weird.
Speaker 1 (11:10):
A good point to end a conversation about AI generation contaent, It.
Speaker 2 (11:13):
Is just weird.
Speaker 1 (11:14):
You could read Brad's peace. We'll put a LinkedIn in
our podcast show notes at sam Bloomberg dot com as well.
Speaker 3 (11:19):
Well.
Speaker 1 (11:19):
Let's bring you more now and what to expect from
the US President's state visit to the UK, which begins
later today. Our UK politics reporter James Wilcock is with
us from more James talkers through then. One of the
expectations around this visits, I.
Speaker 9 (11:31):
Mean, we're expecting three days of pageantry. Donald Trump's US
president sets arrived this evening and we're going to be
getting a carriage, processions, royal salutes and a state banquet.
But behind these ceremonial events, it's an opportunity for both
diplomacy and for business. Alphabet have already announced this morning
they are investing five billion pounds into the UK's growing
(11:55):
AI economy. Bloomberg have learned that over the next few
days further multi billion dollar UK investments respected from UK
US companies, totaling as much as ten billion, if not more. Now,
this is going to be a big deal for Kissed Armer,
who has talked up both his relationship with Donald Trump
(12:16):
you as president, and also his ability to get foreign
direct investment into the country. So in some ways this
is going to be a good news story for a
prime minister who has been struggling in a few weeks
of difficult headlines.
Speaker 2 (12:29):
Absolutely, and if it boosts economic growth in Britain, I'm
surely that's the man take that the government was elected on.
Everyone will cheer that if that is what flows from this,
but I suppose it's also there are some awkward elements
to this. I mean it is also awkward for kiss
Sar obviously from a party on the left. There's the
(12:51):
Mandalson scandal. There's lots of other issues that could emerge
over the course of these three days and lots of FaceTime,
but also lots of opportunities for things that go wrong.
Speaker 9 (13:02):
I guess well, I mean, look like you say, the
ghosts at the feast or the ghost at the state banquet,
maybe I should say, is Peter Mandelson, who wasn't until
last week Britain's ambassador to the US, before a series
of emails reported on by Bloomberg lay clear the depths
of his relationship with the disgraced fancier Jeffrey Epstein. Now, look,
losing your ambassador before a visit from the leader of
(13:23):
the ambassador to the country is by any metric, a
diplomatic faux pas, sort of in the gallery Hall of Fame,
and so much of the state visit is a gambit
by Britain to say we will put our all into
winning over one very powerful person, and this is always
how the UK establishment has done it. In exchange for
(13:45):
if we put everything into impressing US President dal Trump,
we will get hopefully the sort of system goes economic
or diplomatic coups. And so the whole point is then
to make sure that US President dal Trump has a
good time and so to that thing. Things that could
sort of derail here are any sort of difficult questions
about Epstein or Mandelson at the press conference, but also
(14:07):
questions around sort of Vice President jd Vance's concerns around
UK free speech that's been a big mag of issue.
Tesla Ceo Elon Musk just over the weekend made some
incredibly incendiy remarks. The UK partitions here have already all
condemned in the mainstream. We're talking to liberal Democrats, even
Nagel Frash from Reform UK. There's also the risk of
(14:27):
UK protests. I mean, in Trump's first term when he visited,
there was a now infamous blimp of Trump shaped like
a baby that flew over London, which he then commented
on in viun of the Sun. If the whole point
of this is for Kirs Starmer is to have deliberable gains,
so for the UK public, if at the end of
this summit, the state visit, there aren't deliverable gains. That
also raises questions about his efficacy.
Speaker 1 (14:50):
This is all happening at a time, James, when Kirs
Starmer has seen plenty of upheaval in his own team,
and there is yet more of that today.
Speaker 9 (14:58):
Yes, I mean that. Two weeks ago, after a very
difficult and bruising first year in government, Starmer declared the
start of phase two. It's going very well.
Speaker 7 (15:09):
So far.
Speaker 9 (15:10):
He has lost his deputy Prime Minister, he has sacked
his US ambassador and as of yesterday we can report
that also he has sacked one of his most senior
a's Paul Ovinden, after a series of sexual explicit texts
and emails from twenty seventeen published by TV. From the
people I speak to and Labor, the level of exasperation
(15:30):
towards the Starmer project is at a current all time
high because the problem they see is they don't yet
see a way out of the sort of sudden collapse
in the polls over the past year and what the
turnaround plan is. And two weeks ago was supposed to
be the start of the comeback plan, it has been
(15:51):
derailed at quite an incredible pace. The question is is
the state visit by Donald Trump a further extension of
the recent negative domestic headlines or a chance to actually
be a good news story that's been in the works
for months, with good economic story to turn all around
the next three days and a very mercurial US president
will decide, Yeah, it's.
Speaker 2 (16:12):
Going to be absolutely fascinating to understand where those US
deals are going to be in technology and nuclear power
and other parts. Thank you so much to James Walcock
are UK politics reporter. Stay with us. More from Bloomberg
Daybaquube coming up after this.
Speaker 1 (16:32):
To Switzerland. Next to our lawmakers have voted against a
second attempt to delay stricter band capital quality rules. The
changes will lift UBS as capital requirements and are part
of bigger reforms which will see the Swiss lender set
aside some twenty six billion dollars more. That's left executives
of the bank considering options, including moving its headquarters out
of the country. Our Swiss finance reporter Milliam Balazoo joins
(16:54):
us now for more. Mariam, good morning. How significant first
of all are these changes in capital rules for UBS?
Speaker 6 (17:02):
It is a big deal for UBS. It is actually
something that sort of is distracting the bank a little
bit at the moment, as the focusing on the integration
of pretty Swiss. So these changes, there's a bunch of
proposals that the government that the Swiss government has made.
I'd say, by far, the most significant part of this
(17:25):
proposed change is the measure that would require UBS to
increase the amount of capital held at a Swiss base
and main unit against potential losses at foreign units to
one hundred percent. So the government has sort of estimated
that this alone could increase UBS's capital requirement by as
(17:47):
much as twenty six billion. So higher capital requirements can
make a bank safer, that's for sure, and that's the
thought process. However, it can make it less profitable, and
that's where the concern lies for UBS. So it's a
bit of a conundrum because obviously the Swiss government wants
(18:09):
all of that risk to be deducted from the parents' capital,
the parents banks capital, meaning that UBS is already sort
of prepared to shoulder major losses should things go badly
or badly wrong any of its units worldwide or any
of its business divisions. So basically, the Swiss government wants
(18:33):
UBS to shoulder any of the costs should there be
an issue, and bear in minunit we've witnessed the collapse
of Pretty Swiss not so long ago, so it's still
very raw.
Speaker 2 (18:45):
And in terms of what that means for CEO Sergio
Marti and the likely options that are now being considered
by UBS as this has been something of a long
running process.
Speaker 6 (18:57):
What next, Yeah, that's a very interesting question. There's still
at the drawing board at the moment. They are looking
at variety of options, and everything sort of ranges from
some very sort of mundane technical exercise that we'd get
(19:17):
them to this amount. There's something called upstreaming where the
company could also set aside some money each each quarter
and eventually get there because those proposal there and mind
this is a very lengthy process. It could take six
to eight years until it comes to fruition, so there's
(19:37):
time to sort of play around with technicalities to get
to that twenty six billion. There's also other kind of
financial tools such as s RTEs that the company is
looking at then. So these are the most sort of
smaller mundane ways to get to that amount, but there's
also ways that are a bit more radical that some
(20:00):
people within the company think should be explored, so we
looked at potentially spinning out some parts of the business
that are dragging the whole group, or even looking at MNA.
They need to bolster their presence in the US for instance,
in the longer run will bring them more capital, and
(20:22):
there is also obviously the option of simply relocating so
to go around the Swiss regulatory hurdles. So they were
looking at We had reported that a couple of months
ago that the company was looking at moving its headquarters
and then are looking at jurisdictions such as the US
(20:42):
for instance. But again from our reporting and our sources,
these are options that are not ideal for the bank,
that are not preferred either, same as shrinking. Like Sergio
and Marti has said previously, this.
Speaker 1 (21:01):
Is Bloomberg Daybreak Europe, your morning brief on the stories
making news from London to Wall Street and beyond.
Speaker 2 (21:07):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (21:13):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (21:19):
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I'm Caroline Hipka and.
Speaker 1 (21:28):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the bloom Big Day Break you at podcast.
Good morning, It's Tuesday, the sixteenth of September. I'm Caroline
Hepga in London.
Speaker 1 (00:16):
And I'm Stephen Caroline Brussels. Coming up today, Carostarmer rolls
out the red carpet as Donald Trump expects to announce
deals worth more than ten billion dollars during his state
visit to the UK.
Speaker 2 (00:28):
An appeals court blocked the US President's efforts to fire
Federal Reserve Governor Lisa Cook ahead of tomorrow's interest rate decision.
Speaker 1 (00:37):
Plus more capital or a new headquarters abroad? Could UBS
really take the nuclear option in its showdown with the
Swiss government.
Speaker 2 (00:46):
Let's start with a roundup of our top stories.
Speaker 1 (00:48):
Economic deals totaling more than ten billion dollars are expected
to be announced during US President Donald Trump's state visit
to the UK, which begins later today. It comes as
London's Final Sector called on the government to go further
to attract private investment into British assets. Bloomberg's teaa adebio has.
Speaker 3 (01:07):
More a science in technology partnership, plans to build nuclear
power stations and deeper financial connections just some of the
goods on offer to the UK. As Donald Trump's US
delegation prepares to visit, But whilst Kirs Starmer gears up
to host discussions with the President in the English countryside,
the country's financial hub is calling for change. According to
(01:31):
a City of London Corporation report, the UK faces one
hundred and fifty billion pounds in unmet funding needs over
the next five years. The financial district's governing body are
calling for measures to steer pension capital into UK equities.
This just weeks ahead of an autumn budget that economists
widely expect to hike taxes to fill a fiscal hole.
(01:55):
In London, Tiwa ad a bio Bloomberg radio.
Speaker 2 (01:58):
Well saying in the UK, the Prime Minister Kis Starmer
has lost a third key ally from government in less
than two weeks. Starmer's director of strategy, Paul Ovenden, resigned
after sexually explicit comments he made in twenty seventeen were
published by ITV News. The senior advisor's exit comes after
Starmer lost both his deputy Prime Minister and ambassador to
(02:22):
the United States over separate scandals. In his first public
comments since he fired ambassador Peter Mandelson. The Prime Minister,
says that Mandelson's ties to Jeffrey Epstein made his position untenable.
Speaker 4 (02:37):
Had I known then what I know now, i'd never
appointed him, because what emerged last week were emails Bloomberg
emails which showed that the nature and extent of the
relationship that Peter Mandelson had with Epstein was far different
to what I had understood to be the position.
Speaker 2 (02:59):
But Starmer's decision is likely to be a sore point
doing Trump's visit, given the US leader's own struggle to
move on from questions about his ties to Epstein. The
loss of so many senior figures in a short time
in the UK is leading some to question how stable
Starmer's own position is despite his large majority in Parliament.
Speaker 1 (03:21):
A growing number of economists believe the Bank of England
has finished cutting interest rates as it grapples with a
fresh spike in inflation. Figures you out tomorrow are expected
to show inflation peaking at four percent this month, double
the bank's target. Membrooks, Freddie Filston has more.
Speaker 5 (03:35):
Economists surveyed by Bloomberg say they believe the BOE will
keep rates at four percent for the foreseeable future. The group,
which includes Santander, Schroeders and others, unanimously believes rates will
stay on hold this Thursday. The prospect of limited further
rate cuts or none at all, will pile further pressure
(03:58):
on Chancellor Rachel Reeves, who businesses blame for fueling inflation
with her twenty six billion pound tax hike on employers
in London. Freddie Fulston Bloomberg Radio Now.
Speaker 2 (04:10):
Officials from the US and China have reached a framework
on keeping TikTok running in the United States. The deal
was reached during talks in Madrid, with Treasury Sectary Scott
Bessen confirming a plan for US ownership of the app.
CBS News reports that Oracle is among a group of
firms that could enable TikTok operations to continue. The framework
(04:32):
sets these stage for a phone call on Friday between
President Trump and President Hijinping. Donald Trump spoke to reporters
in the Oval Office.
Speaker 6 (04:41):
It's important and it can maybe even bring us closer
to channel.
Speaker 4 (04:46):
We had a very good meeting with John.
Speaker 2 (04:47):
I was surprised.
Speaker 7 (04:48):
I didn't expect it to that extent, and I'm going
to speak again with President Chi on.
Speaker 1 (04:53):
Friday, and you know, I think I think that'll confirm
things up.
Speaker 2 (04:57):
That was President Trump speaking there. China's Comma Ministry called
the deal a consensus, though some technical hurdles remain. The
breakthrough could unlock a long awayed Trump Gee summit at
an Asia Pacific Corporation Forum in South Korea, which will
take place at the end of next month.
Speaker 1 (05:16):
The Federal Appeals Court has rejected President Trump's bid to
unseat the FED Governor Lisa Cook ahead of the rate
setting meeting. The ruling makes it more likely that Cook
will take part, although Trump could still ask the Supreme
Court to intervene. Meanwhile, the Senate confirmed Stephen Myron is
a FED governor. It'll pave the way for Myron, who's
currently Trump's economic advisor, to join the policymakers. Here is
(05:38):
Bloomberg's Katarina Sarreva.
Speaker 7 (05:41):
We haven't seen a huge market reaction yet, you know,
even when he was first nominated by the President, there wasn't,
you know, some massive reaction. And that's kind of been
kind of interesting, right People have thought that maybe we
would see a bigger reaction now. Maybe part of that
is because he is just one role, you know, out
(06:03):
of twelve on the Federal Open Market Committee, so he's
alone is not going to change inter streight policy.
Speaker 1 (06:11):
That's Bloomberg's Katerina Sarava. Myron has said that he would
take leave from his role as chair of the White
House Council of Economic Advisors, but not resign. It'll be
the first time in ninety years that are sitting White
House official will have a role in setting monetary policy.
Speaker 2 (06:26):
Elsewhere, Deutsche Bank says that international investors are slashing their
dollar exposure at an unprecedented pace through currency hedges for
US stock and bond purchases. The bank says that for
the first time this decade, flows into dollar hedged ETFs
that by US assets have exceeded those in unhedged funds.
(06:47):
Writing in a note to clients, Deutschebank's global head of
currency Research, Georgia sarr Velos, says that he believes this
explains why the dollar remains weak despite international investors plowing
money back into USS.
Speaker 1 (07:00):
Wall Street's main regulator says it's prioritizing President Trump's proposal
to reduce the frequency of corporate earnings reports. The SEC
says it's pursuing plans to quote further eliminate unnecessary regulatory
burdens on companies. It follows a social media post in
which Trump called for an end quarterly reports for investors.
Research Affiliates chair and founder Rob Arnett says the move
(07:22):
could increase companies long term focus.
Speaker 8 (07:25):
I'm a libertarian. I prefer to let people and businesses
do what they want. I think a requirement of every
three months fine. Lift the requirement. If a company wants
to report every six months, every twelve months, that's fine.
Publicly traded it out a report at least once in
a while, but a requirement for quarterly reporting increases short termism.
(07:47):
I've often said that I will never ever work for
a publicly traded company again. I've been saying that for
a quarter century, and the reason is regulatory distraction and
short termism.
Speaker 1 (08:00):
Search Affiliates chair and founder Rob Barnett. There As, supporters
of quarterly reporting say it's crucial for keeping investors informed
and reduces the chances of market manipulation.
Speaker 2 (08:10):
Those are our top stories for you this morning. Let's
look at the markets where you have very bullish stock traders.
Asian stocks hitting record high MSCI Asia Pacific indexes up
seven tenths of one percent, ten days of gains in
a row. The S and P five hundred above six
six hundred, again on a stellar run, the expectation of
a FED rate cut on Wednesday's softer labor market conditions
(08:34):
and no big inflationary surprises. Gold has also climbed to
due record this morning, three thousand, six hundred and eighty
three dollars. We're up by another almost two tenths of
one percent. Treasuries are steady today, two year yields hovering
near their lowest since last September. The dollars also sliding,
and we get US retail sales data later on today.
Those are the markets in a moment.
Speaker 1 (08:54):
More and what to expect from Donald trump state visit
to the UK, plus the options being considered by the
Swiss Bank UBS as it faces a massive increase in
capital requirements. Put another story that we've been reading this morning,
perhaps an optimistic spin on AI creativity. Karl, I feel
like you and I are the AI curmudgeons essentially in
this world. Move It's just me, but who worry about
(09:17):
thus being inundated with AI slot but Bradstone is the
editor of Bloomberg BusinessWeek. Has been writing about how the
AI generator content in social media in I suppose he's
looking at it from a boon in creativity point of
this is something you know. To be able to create
the great AI content, you still need to have imagination
to begin with. And he talks about one example, which
(09:38):
is this eight second clip of rabbits bouncing on a
trampoline outside made to look like grainy security footage. It's
in eight seconds one of them disappears, and this caused
a massive furori. I suppose we describe it as online
people got very excited about where was the rabbit? How
could it have disappeared? People guessing before it was flagged
(09:58):
as being AI generated, how it could have been done?
Speaker 2 (10:02):
And not just a few people. This is millions and million,
two hundred and thirty million times this little video has
been viewed around the world. Look, even I have been
sucked into watching these AI videos on TikTok and elsewhere.
I mean the talking babies phenomenon, yes, I think basically
(10:22):
sometimes quite drking dogs.
Speaker 1 (10:24):
There's talking dogs as well as the dog podcast. It's
called a podcast.
Speaker 2 (10:29):
I mean, they're cute, they're a bit creepy, they're a
bit weird. Yes, it is creative, but it also does
suck up a lot of time, doesn't it. And it's
advertising back to you.
Speaker 1 (10:38):
But I suppose the argument made by one of these
creators that spoke to Brad for this piece is is
this better than us just being marketed really fancy things
that make you feel bad about our lives. Wouldn't you
rather see a dog talk than feel bad that you
can't afford that, you know, car slash house, slash watch
slash holiday.
Speaker 2 (10:54):
Yeah, look, I have less qualms about it because of
course they're AI generated, so the babies and the dogs
are actually not real babies and dons. They don't belong
to anybody, so actually you're kind of you're not infringing
on their privacy. I suppose it's just weird.
Speaker 1 (11:10):
A good point to end a conversation about AI generation contaent, It.
Speaker 2 (11:13):
Is just weird.
Speaker 1 (11:14):
You could read Brad's peace. We'll put a LinkedIn in
our podcast show notes at sam Bloomberg dot com as well.
Speaker 3 (11:19):
Well.
Speaker 1 (11:19):
Let's bring you more now and what to expect from
the US President's state visit to the UK, which begins
later today. Our UK politics reporter James Wilcock is with
us from more James talkers through then. One of the
expectations around this visits, I.
Speaker 9 (11:31):
Mean, we're expecting three days of pageantry. Donald Trump's US
president sets arrived this evening and we're going to be
getting a carriage, processions, royal salutes and a state banquet.
But behind these ceremonial events, it's an opportunity for both
diplomacy and for business. Alphabet have already announced this morning
they are investing five billion pounds into the UK's growing
(11:55):
AI economy. Bloomberg have learned that over the next few
days further multi billion dollar UK investments respected from UK
US companies, totaling as much as ten billion, if not more. Now,
this is going to be a big deal for Kissed Armer,
who has talked up both his relationship with Donald Trump
(12:16):
you as president, and also his ability to get foreign
direct investment into the country. So in some ways this
is going to be a good news story for a
prime minister who has been struggling in a few weeks
of difficult headlines.
Speaker 2 (12:29):
Absolutely, and if it boosts economic growth in Britain, I'm
surely that's the man take that the government was elected on.
Everyone will cheer that if that is what flows from this,
but I suppose it's also there are some awkward elements
to this. I mean it is also awkward for kiss
Sar obviously from a party on the left. There's the
(12:51):
Mandalson scandal. There's lots of other issues that could emerge
over the course of these three days and lots of FaceTime,
but also lots of opportunities for things that go wrong.
Speaker 9 (13:02):
I guess well, I mean, look like you say, the
ghosts at the feast or the ghost at the state banquet,
maybe I should say, is Peter Mandelson, who wasn't until
last week Britain's ambassador to the US, before a series
of emails reported on by Bloomberg lay clear the depths
of his relationship with the disgraced fancier Jeffrey Epstein. Now, look,
losing your ambassador before a visit from the leader of
(13:23):
the ambassador to the country is by any metric, a
diplomatic faux pas, sort of in the gallery Hall of Fame,
and so much of the state visit is a gambit
by Britain to say we will put our all into
winning over one very powerful person, and this is always
how the UK establishment has done it. In exchange for
(13:45):
if we put everything into impressing US President dal Trump,
we will get hopefully the sort of system goes economic
or diplomatic coups. And so the whole point is then
to make sure that US President dal Trump has a
good time and so to that thing. Things that could
sort of derail here are any sort of difficult questions
about Epstein or Mandelson at the press conference, but also
(14:07):
questions around sort of Vice President jd Vance's concerns around
UK free speech that's been a big mag of issue.
Tesla Ceo Elon Musk just over the weekend made some
incredibly incendiy remarks. The UK partitions here have already all
condemned in the mainstream. We're talking to liberal Democrats, even
Nagel Frash from Reform UK. There's also the risk of
(14:27):
UK protests. I mean, in Trump's first term when he visited,
there was a now infamous blimp of Trump shaped like
a baby that flew over London, which he then commented
on in viun of the Sun. If the whole point
of this is for Kirs Starmer is to have deliberable gains,
so for the UK public, if at the end of
this summit, the state visit, there aren't deliverable gains. That
also raises questions about his efficacy.
Speaker 1 (14:50):
This is all happening at a time, James, when Kirs
Starmer has seen plenty of upheaval in his own team,
and there is yet more of that today.
Speaker 9 (14:58):
Yes, I mean that. Two weeks ago, after a very
difficult and bruising first year in government, Starmer declared the
start of phase two. It's going very well.
Speaker 7 (15:09):
So far.
Speaker 9 (15:10):
He has lost his deputy Prime Minister, he has sacked
his US ambassador and as of yesterday we can report
that also he has sacked one of his most senior
a's Paul Ovinden, after a series of sexual explicit texts
and emails from twenty seventeen published by TV. From the
people I speak to and Labor, the level of exasperation
(15:30):
towards the Starmer project is at a current all time
high because the problem they see is they don't yet
see a way out of the sort of sudden collapse
in the polls over the past year and what the
turnaround plan is. And two weeks ago was supposed to
be the start of the comeback plan, it has been
(15:51):
derailed at quite an incredible pace. The question is is
the state visit by Donald Trump a further extension of
the recent negative domestic headlines or a chance to actually
be a good news story that's been in the works
for months, with good economic story to turn all around
the next three days and a very mercurial US president
will decide, Yeah, it's.
Speaker 2 (16:12):
Going to be absolutely fascinating to understand where those US
deals are going to be in technology and nuclear power
and other parts. Thank you so much to James Walcock
are UK politics reporter. Stay with us. More from Bloomberg
Daybaquube coming up after this.
Speaker 1 (16:32):
To Switzerland. Next to our lawmakers have voted against a
second attempt to delay stricter band capital quality rules. The
changes will lift UBS as capital requirements and are part
of bigger reforms which will see the Swiss lender set
aside some twenty six billion dollars more. That's left executives
of the bank considering options, including moving its headquarters out
of the country. Our Swiss finance reporter Milliam Balazoo joins
(16:54):
us now for more. Mariam, good morning. How significant first
of all are these changes in capital rules for UBS?
Speaker 6 (17:02):
It is a big deal for UBS. It is actually
something that sort of is distracting the bank a little
bit at the moment, as the focusing on the integration
of pretty Swiss. So these changes, there's a bunch of
proposals that the government that the Swiss government has made.
I'd say, by far, the most significant part of this
(17:25):
proposed change is the measure that would require UBS to
increase the amount of capital held at a Swiss base
and main unit against potential losses at foreign units to
one hundred percent. So the government has sort of estimated
that this alone could increase UBS's capital requirement by as
(17:47):
much as twenty six billion. So higher capital requirements can
make a bank safer, that's for sure, and that's the
thought process. However, it can make it less profitable, and
that's where the concern lies for UBS. So it's a
bit of a conundrum because obviously the Swiss government wants
(18:09):
all of that risk to be deducted from the parents' capital,
the parents banks capital, meaning that UBS is already sort
of prepared to shoulder major losses should things go badly
or badly wrong any of its units worldwide or any
of its business divisions. So basically, the Swiss government wants
(18:33):
UBS to shoulder any of the costs should there be
an issue, and bear in minunit we've witnessed the collapse
of Pretty Swiss not so long ago, so it's still
very raw.
Speaker 2 (18:45):
And in terms of what that means for CEO Sergio
Marti and the likely options that are now being considered
by UBS as this has been something of a long
running process.
Speaker 6 (18:57):
What next, Yeah, that's a very interesting question. There's still
at the drawing board at the moment. They are looking
at variety of options, and everything sort of ranges from
some very sort of mundane technical exercise that we'd get
(19:17):
them to this amount. There's something called upstreaming where the
company could also set aside some money each each quarter
and eventually get there because those proposal there and mind
this is a very lengthy process. It could take six
to eight years until it comes to fruition, so there's
(19:37):
time to sort of play around with technicalities to get
to that twenty six billion. There's also other kind of
financial tools such as s RTEs that the company is
looking at then. So these are the most sort of
smaller mundane ways to get to that amount, but there's
also ways that are a bit more radical that some
(20:00):
people within the company think should be explored, so we
looked at potentially spinning out some parts of the business
that are dragging the whole group, or even looking at MNA.
They need to bolster their presence in the US for instance,
in the longer run will bring them more capital, and
(20:22):
there is also obviously the option of simply relocating so
to go around the Swiss regulatory hurdles. So they were
looking at We had reported that a couple of months
ago that the company was looking at moving its headquarters
and then are looking at jurisdictions such as the US
(20:42):
for instance. But again from our reporting and our sources,
these are options that are not ideal for the bank,
that are not preferred either, same as shrinking. Like Sergio
and Marti has said previously, this.
Speaker 1 (21:01):
Is Bloomberg Daybreak Europe, your morning brief on the stories
making news from London to Wall Street and beyond.
Speaker 2 (21:07):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (21:13):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (21:19):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hipka and.
Speaker 1 (21:28):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg day Break Europe
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