May 7, 2024 • 19 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) UBS Group returned to profit after two loss-making quarters, with both wealth management and the investment bank adding to sustained progress in the integration of Credit Suisse after its emergency rescue last year.
(2) The Palestinian militant group Hamas said it had agreed to a cease-fire proposal for the Gaza Strip, but Israel's war cabinet unanimously rejected it as "far from Israel's necessary demands," dashing hopes for an immediate pause in the fighting.
(3) Chinese President Xi Jinping called on France to help fend off a "new Cold War" as the European Union increasingly aligns with US concerns over security risks and trade tensions.
(4) US chipmaker Nvidia is investing in Wayve Technologies joining a $1.05 billion funding round for the UK startup that wants to get its autonomous-driving technology into cars.
(5) People who left a job for a new one have reported being less satisfied at work than those who stayed put, according to a survey from the Conference Board, a sharp reversal from their sentiments just a year earlier.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg Daybak podcast, available every morning on Apple,
Spotify or wherever you listen. It's Tuesday, the seventh of
May here in London. I'm Caroline Hepkin and.
Speaker 3 (00:18):
I'm Stephen Carroll. Coming up today.
Speaker 4 (00:20):
UBS smashes past profit estimates in the first quarter as
it prepares to complete the Credit Suite merger this month.
Speaker 2 (00:27):
Israel rejects a cease far proposal backed by her Mass
and vows to continue its military operation in Galza.
Speaker 4 (00:34):
And change is good except when it isn't. Why moving
jobs doesn't always make you happier.
Speaker 2 (00:40):
Let's start with a round up of our top stories.
UBS has returned to profit after two quarters of losses,
but is warning of further costs from its integration of
Credit Suites. The Swiss banking giant reported first quarter net
income of almost one point eight billion dollars, three times
what analysts were expecting. The outpufore moments was driven by
(01:01):
its investment bank and wealth management divisions, but UBS is
expecting to book one point three billion dollars in expenses
linked to the Credit Suisse merger in the coming months.
The legal tie up with its former rival, is due
to be completed on the thirty first of May, and.
Speaker 4 (01:18):
Just breaking earnings results this hour, BP reporting first quarter
adjusted net profit that missed expectations at two point seven
two billion dollars, so that some two hundred million dollars
less than had been expected. The company also announcing a
share buyback in the first quarter of one point seventy
five billion dollars.
Speaker 2 (01:37):
Now to the Middle East, Israeli troops have taken control
of the main border crossing into Gaza, blocking aid trucks
and people entering from Egypt. The move comes a day
after Israel told residents in parts of Raffa to leave
ahead of a possible attack on the city. Israel's war
cabinet has unanimously rejected a Gaza ceasefire proposal backed by Hamas,
(02:00):
saying that it does not meet the country's necessary demands.
Jonathan Panikoff of the Atlantic Council's Middle East program says
that Prime Minister Benjamin Netanya, who is facing increasing pressure
from inside Israel.
Speaker 5 (02:13):
Domestically, it's a real challenge. Hostage families and Israelis as
a whole have been calling for his temporary ceasefire for
months now that would bring another set of hostages. Pon
the November release of hostages seems like a lifetime ago,
and really there's an increasing pressure in Israel for Benjamin
(02:33):
DETTANYAHUO and the coalition to make progress on the hostages
being released.
Speaker 2 (02:40):
Jonathan Panakoff's comments come as Israel said that it would
send a delegation to meet with mediators to exhaust the
possibility of reaching an agreement. It's understood that any deal
would include the release of Israeli hostages held in Gaza
in exchange for Palestinians detained in Israeli jails and a pause.
Speaker 4 (02:59):
Infighter Seatingping has called on France to help prevent a
new Cold War. China's president told his French counterpart, and
Manuel Macron, that the two countries should be fostering closer
economic ties rather than decoupling. Bloomberg's chief North Asia correspondent
Steven Angel says this comes as the EU has been
more robust in its trade relations with China.
Speaker 6 (03:20):
Clearly, he has a mission to offer the Europeans China's
economic benefits. The European Union is sort of aligning itself
more towards a US position. Towards China on trade on
a number of issues and potential tariffs on evs and
the like, and also, of course the security threat with
the war in Ukraine into its third year right now,
(03:42):
and that is at front and center.
Speaker 4 (03:45):
Angel adds that China's no limits friendship with Russia has
stirred distrust in European capitals. Francis Macron responded to she,
saying that there cannot be security in Europe without security
in Ukraine.
Speaker 2 (03:58):
Now on earning this morning, Aramco will pay thirty one
billion dollars in dividends to the Saudi government and other
investors despite lower profits. The world's biggest crude all exporter
made a first quarter profit of twenty seven and a
half billion dollars, but that missed estimates. Aramco's generous payouts
are becoming increasingly important for the Gulf state as all
(04:20):
prices remain below the levels that it needs to balance
its budget. The kingdom needs oil at around one hundred
and eight dollars about to balance the budget with which
is more than twenty dollars above the current trading price.
Speaker 4 (04:34):
Richmond Federal Reserve President Thomas Barkin says the full impact
of high interest rates is yet to come. The voting
policymaker added he still expects to hit the central banks
two percent inflation target without further hikes. It comes as
the central bank speakers like New York Fed President John
Williams continue to signal caution over murky economic data.
Speaker 7 (04:55):
Do we have the maximum employment and price to building goal?
From my perspective, see all the data and information speaks to.
Speaker 3 (05:04):
All of that.
Speaker 7 (05:05):
And really, you know, as the data come in, hopefully
we'll be moving in the direction we want to see
both on inflation in terms of restoring balance to the economy,
and then we'll make our decisions based on that.
Speaker 3 (05:19):
John Williams speaking there.
Speaker 4 (05:20):
Both Williams and Barkin joined other right setters and voting
unanimously to keep US rates at a two decade high
last week.
Speaker 2 (05:28):
Now, the UKAI startup Wave has raised a billion dollars
in funding for its self driving technology. It's one of
the largest cash injections for a European AI venture on record.
In Vidio Softbak and Microsoft are three of the key
investors in Wave, which was founded by CEO Alex Kendall
in twenty seventeen. Although no valuation was disclosed, the company
(05:50):
says that it should be its last major funding around
as it starts to get profit from commercial deals.
Speaker 4 (06:00):
And job seeker is looking for a happier work life
with a new employer may find the grass isn't always greener.
That's according to new research in the United States that
shows recent switchers are less satisfied.
Speaker 3 (06:12):
Than those who stayed. Pot Bloomberg's Tea Adabio has the details.
Speaker 8 (06:16):
Once a sure fire away to make workers happier, switching
jobs is now leaving them more miserable than before. A
survey from the US Conference Board found that in twenty
twenty two, recent hires had greater job satisfaction, but just
a year later that trend has reversed. Lucrative pandemic pay
bumps could be to blame for the change, encouraging job
(06:39):
hunters to ignore other factors like culture and training. Despite
the dip in new highest sentiment ratings for overall job
satisfaction are still at their highest since nineteen eighty seven.
In London, tiwa ad a Bio Bloomberg Radio.
Speaker 4 (06:54):
In a moment, we will bring you our interview with
the UBS CEO, Sodio Ramati and also talk about the
latest developments in the Middle East. But another story that
cod aur I this morning now, Havier Blastom Bomberg opinion
is the person that you want to be reading if
you're worried about the cost of important goods going up.
He's our commodities experts. He flagged quite a long time
(07:14):
ago at the soaring cost of olive oil, very important
if you're a heavy consumer.
Speaker 3 (07:19):
Now he's worried about coffee.
Speaker 2 (07:20):
Yeah, this is also he has a lovely kind of
line about how his favorite breakfast foods are going up
in price because hea'ts bred with a dash of olive
oil and a coffee. Now, the issue is that there
is it's not just weather that is affecting. And we
have talked, for example about the sawing price of cocoa beans.
Again that's the kind of weather climate change related issue,
(07:42):
but it's also to do with the fact that China
is affecting the price and what growers actually plant, as
well as rather falling in love with coffee themselves and
so pushing up the price of Arabica and other coffee
blends that are so important in the West.
Speaker 4 (08:00):
Yeah, definitely worth there is. If you've got time this
morning in China's need love of coffee is coming for yours.
Have of last's latest piece FM Bloomberg Opinion.
Speaker 2 (08:08):
Now let's get more on our top story, the bumper
results from UBS these UK based lender return to profit
after two loss making quarters. The robust set of results
will be a boost for Sergio and Moti, the CEO,
as he grapples with a tightening regulatory outlook in Switzerland.
Sergio Motti has been speaking to our editor at large,
franc In Laqua, and Moti began by highlighting the strength
(08:31):
in the bank's recent performance.
Speaker 9 (08:33):
First of all, we are making very good progress on
our integration plans, but also it was great to see
a very strong return to profitability both on a reported
basis but also very strong underlying profits. We also see
a good momentum with clients with inflows across our businesses,
(08:53):
and our capital is strong, so allowing us to continue
to pursue our capital return plans.
Speaker 10 (09:02):
And also the investment bank was actually quite strong, better
than expected. Again, what does it tell you about what
you can see in the future. Is it a one
off or actually is a path ahead better?
Speaker 9 (09:12):
Actually, it's a good momentum. You may remember in the
four quarter. We also had a very strong performance in banking.
As we integrate a new colleagues from Credit Switch on
our platform, we start to see the pipeline developing we
are able to execute and so it's very much aligned
with our expectations of improving the mix between our markets
(09:37):
business and our banking business in the investment bank.
Speaker 10 (09:40):
So in the investment bank where you see the biggest
strength and know we also heard about possible job losses
in Asia. Is Asia at the moment weaker than, for example,
parts of the US and investment bank.
Speaker 9 (09:50):
No, I think that we reinforced our franchises globally. I
think that, of course, we are still going through across
the entire bank. We are still a lot of work
to be done to res structure the businesses and to
bring them back into even stronger profitability. So I think
that is a good momentum. We achieve almost a ten
(10:11):
percent return on CT one, which is still a third
or fifty percent away from our final targets, so still
work to be done. We always say that twenty twenty
four is an important year, and as we now approach
the end of May, we're going to execute on our
legal entity mergers which allow us to unlock in the
(10:34):
future further cost settings.
Speaker 10 (10:37):
An important year twenty twenty four because it's also more
difficult year to twenty twenty three.
Speaker 3 (10:42):
No, because is the.
Speaker 9 (10:43):
More First of all, we have two huge milestones, the
merger of our legal entities and the second one we
start to do the migration of clients from the credit
switch platforms into the UBS platforms. So this is very technical,
still requires a lot of support and.
Speaker 3 (11:01):
People to do that.
Speaker 9 (11:03):
But as we start to do that, we can unlock
some cost savings, but also unlock capital savings, funding savings,
and therefore you know, achieving our final targets to achieve
thirteen billions of savings by the end of twenty twenty
six forty this year we do expect half of that
(11:24):
being achieved, so six and a half billions.
Speaker 10 (11:27):
So when you look at global wealth, I mean the
outlook talks about interest rate cuts. Again, how do you
worry about you know, things that are outside.
Speaker 9 (11:33):
Your control, well, things that are side our control. You know,
we always need to wonder what can happen on the
geopolitical front, what can happen on any sudden change in
the macroeconomic pictures. So I think that we do indeed
a factor in our outlook for NII. For example, three
rate cuts in the US, two rate cuts in Switzerland.
(11:58):
This can change. If it changes, may be beneficiary to
our NII, but maybe the underlying macroeconomic event is not
so positive. So you know, we need to always assess well,
we are prepared for any scenario. We stay focused one
on our plan, but also we have you know, a
(12:20):
balance sheet for old seasons, allowing us to really manage
any unexpected event.
Speaker 10 (12:26):
So when you look at market volatility, it's a little
bit unusual to see this much market volatility or even
pricing on the fact. How do you describe the.
Speaker 9 (12:33):
Markets, Well, it's a kind of market volatility around bonds
and ten years. But if I look on effects, I
look at equities and many other anset classes, the volatility
is not there is more subdued. We saw more client
and activity, but let's not forget that there is a
(12:55):
little bit of seasonality factor in the first quarter. So
we need to really see how in the next quarter
things are going to play out. We have to remember
that we are still facing in the in the in
the foreseeable future, big elections coming, and how this is
going to then play out into the sentiment of clients.
Speaker 10 (13:17):
Still still open, and that will be very regionally. Again,
if you look at pipelines, did you see a difference.
Speaker 9 (13:22):
Yeah, very origionally, but you know nowadays things in every
region can affect others, so I think that things are
quite fluid.
Speaker 10 (13:29):
Is Europe weaker than the rest of the world, Well,
Europe is.
Speaker 3 (13:33):
Still not growing.
Speaker 9 (13:34):
If I look at our businesses, of course, it's still
somehow clear that the real growth is mainly driven by
the US and in Asia. I'm also very pleased with
our performance in Switzerland, but when I look at Europe
in general, it's still not so constructive.
Speaker 2 (13:57):
So that was the UPS Group CEO Searge and mostly
that's wee into Bloombogs Francine Laqua. Of course, the Swiss
authorities warm systematically important banks to hold more capital. That's
one major issue. In terms of the tea live blog
that is live on the Bloomberg Tumil, you can follow
all of our experts speaking about the UBS results. Now,
jan Patrick Barnett, a senior reporter, talking about UBS shares
(14:19):
indicated higher three percent this morning, so that on one
of our key earning stories.
Speaker 4 (14:24):
Well, let's turn two events in the Middle East. Next,
and Israeli troops have taken control of the Rafa border
crossing area in Gazo, with Hama saying that all aid
flows from Egypt saying have stopped.
Speaker 3 (14:35):
It's the latest development.
Speaker 4 (14:36):
Is Hamas and Israel been negotiating via cut Our Egypt
and the US on a ceasefire, hostage and prison and
agreement for weeks. Now joining us with more is Our
EMEA Ands director rasalind Mathis and Raz Good morning to you.
First of all, what do we know about what's been
happening at Rafa this morning and how significant is it?
Speaker 1 (14:53):
Well, what we know is that there were actually strikes
in the Rafa area by Israel air strikes overnight and
then today we've got news that troops have moved into
the Rougher crossing area and that's the first time since
the war broke out since Hermas attacked Israel back in October,
and they've secured that crossing and they've blocked it off
and so that means that no aid at all people
(15:15):
can move back and forth between that and that is
the conduit between Egypt and Gaza and has been a
major port of operation for aid to go into Gaza
in recent months. It's not the only crossing into Gaza,
but there's only a few, and you know, they've been
pretty troubled throughout and so it's really going to raise
questions about the flow of aid into Gaza. It also
(15:38):
points to the fact that Israel is very determined to
push ahead with some sort of offensive in Rufa, whether
that's within weeks or days or whatever. They're making preparations
for it, and so they're picking up their activity there
and that's really a sign that despite the talks that
are still going to go on towards the ceasefire, that
Israel sees its primary goal as going to rough for
(16:00):
at some point.
Speaker 2 (16:01):
Yeah, absolutely, those negotiations expected to continue today. What do
we know about the cease far proposal and a possible deal,
you know, talks of Hamas backing a deal and a
rebuttal from Israel.
Speaker 1 (16:14):
Well we know that Hamas that accepted the deal that
was proposed by cut Her and Egypt, of course facilitated
also by the US, and Israel says that's not good enough.
And it seems to be a continuation of disagreement over
felling minor wording in the end, but it's really about
what this deal might mean in terms of setting the
pathway for a full end to the war. A Hamas
(16:35):
wants it to be a pathway to an end to
the war. Israel wants to prevaricate on that because they
want to have the option to keep fighting if needed,
And it's really about the language that that might bake
in to that.
Speaker 3 (16:45):
Agreement at this point.
Speaker 1 (16:47):
I mean, Israel says they will show up for further talks,
but they've also said that's going to be on the
same track as they continue their preparations for Rafa, and
so for the US in Europe and cut Her in
Egypt and others. It's really about a matter of time,
the race the clock here to try and get a
deal sealed on before Israel does proceed with Ruffa.
Speaker 4 (17:06):
How much of a risk is this for Israel in
terms of attention Nasha relationships, because of the pressure that
they've been facing from their allies like the US to
not go ahead with this, the fans.
Speaker 1 (17:17):
Of in Rauffa, well, there is that incredible pressure on Israel.
But as also have we seen throughout You've seen Benjamin Netanyahu,
you've seen other members of the leadership, the war Cabinet
and so on, really saying they're undeterred because they see
their goals as being ultimately two things. One is to
try and get the release of the remaining Israeli hostages.
But also they don't want to be in a position
(17:37):
where they feel vulnerable to Hamas again, and that's a
really existential thing for Israel. And so despite the many
phone calls again a phone call yesterday yet again with
the US President Joe Biden and Israeli Prime Minister Benjamin Netanyahu,
where Joe Biden said, if you go into Rafa, it's
a full offensive with civilians at stake. That's a mistake,
he said to him, those words, it is quote. But
(18:01):
the rhetoric from Israel doesn't change, and that again because
they see it as fundamental. Of course, there has been
a hard tack to the right in politics, so Benjamin
Netnio is bound a bit by members of his own,
you know, in a circle, who are pushing him on
this front. But the reality is also is that despite
all the retoric, the US is not going to stop
sending weapons to Israel. They've made clear they want to
(18:23):
support Israel militarily, and so the leverage the US has
and others have in Europe and elsewhere, is arguably limited.
Speaker 4 (18:32):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (18:38):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 4 (18:44):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (18:50):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (18:59):
I'm Stephen Carol.
Speaker 4 (19:00):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak
Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg Daybak podcast, available every morning on Apple,
Spotify or wherever you listen. It's Tuesday, the seventh of
May here in London. I'm Caroline Hepkin and.
Speaker 3 (00:18):
I'm Stephen Carroll. Coming up today.
Speaker 4 (00:20):
UBS smashes past profit estimates in the first quarter as
it prepares to complete the Credit Suite merger this month.
Speaker 2 (00:27):
Israel rejects a cease far proposal backed by her Mass
and vows to continue its military operation in Galza.
Speaker 4 (00:34):
And change is good except when it isn't. Why moving
jobs doesn't always make you happier.
Speaker 2 (00:40):
Let's start with a round up of our top stories.
UBS has returned to profit after two quarters of losses,
but is warning of further costs from its integration of
Credit Suites. The Swiss banking giant reported first quarter net
income of almost one point eight billion dollars, three times
what analysts were expecting. The outpufore moments was driven by
(01:01):
its investment bank and wealth management divisions, but UBS is
expecting to book one point three billion dollars in expenses
linked to the Credit Suisse merger in the coming months.
The legal tie up with its former rival, is due
to be completed on the thirty first of May, and.
Speaker 4 (01:18):
Just breaking earnings results this hour, BP reporting first quarter
adjusted net profit that missed expectations at two point seven
two billion dollars, so that some two hundred million dollars
less than had been expected. The company also announcing a
share buyback in the first quarter of one point seventy
five billion dollars.
Speaker 2 (01:37):
Now to the Middle East, Israeli troops have taken control
of the main border crossing into Gaza, blocking aid trucks
and people entering from Egypt. The move comes a day
after Israel told residents in parts of Raffa to leave
ahead of a possible attack on the city. Israel's war
cabinet has unanimously rejected a Gaza ceasefire proposal backed by Hamas,
(02:00):
saying that it does not meet the country's necessary demands.
Jonathan Panikoff of the Atlantic Council's Middle East program says
that Prime Minister Benjamin Netanya, who is facing increasing pressure
from inside Israel.
Speaker 5 (02:13):
Domestically, it's a real challenge. Hostage families and Israelis as
a whole have been calling for his temporary ceasefire for
months now that would bring another set of hostages. Pon
the November release of hostages seems like a lifetime ago,
and really there's an increasing pressure in Israel for Benjamin
(02:33):
DETTANYAHUO and the coalition to make progress on the hostages
being released.
Speaker 2 (02:40):
Jonathan Panakoff's comments come as Israel said that it would
send a delegation to meet with mediators to exhaust the
possibility of reaching an agreement. It's understood that any deal
would include the release of Israeli hostages held in Gaza
in exchange for Palestinians detained in Israeli jails and a pause.
Speaker 4 (02:59):
Infighter Seatingping has called on France to help prevent a
new Cold War. China's president told his French counterpart, and
Manuel Macron, that the two countries should be fostering closer
economic ties rather than decoupling. Bloomberg's chief North Asia correspondent
Steven Angel says this comes as the EU has been
more robust in its trade relations with China.
Speaker 6 (03:20):
Clearly, he has a mission to offer the Europeans China's
economic benefits. The European Union is sort of aligning itself
more towards a US position. Towards China on trade on
a number of issues and potential tariffs on evs and
the like, and also, of course the security threat with
the war in Ukraine into its third year right now,
(03:42):
and that is at front and center.
Speaker 4 (03:45):
Angel adds that China's no limits friendship with Russia has
stirred distrust in European capitals. Francis Macron responded to she,
saying that there cannot be security in Europe without security
in Ukraine.
Speaker 2 (03:58):
Now on earning this morning, Aramco will pay thirty one
billion dollars in dividends to the Saudi government and other
investors despite lower profits. The world's biggest crude all exporter
made a first quarter profit of twenty seven and a
half billion dollars, but that missed estimates. Aramco's generous payouts
are becoming increasingly important for the Gulf state as all
(04:20):
prices remain below the levels that it needs to balance
its budget. The kingdom needs oil at around one hundred
and eight dollars about to balance the budget with which
is more than twenty dollars above the current trading price.
Speaker 4 (04:34):
Richmond Federal Reserve President Thomas Barkin says the full impact
of high interest rates is yet to come. The voting
policymaker added he still expects to hit the central banks
two percent inflation target without further hikes. It comes as
the central bank speakers like New York Fed President John
Williams continue to signal caution over murky economic data.
Speaker 7 (04:55):
Do we have the maximum employment and price to building goal?
From my perspective, see all the data and information speaks to.
Speaker 3 (05:04):
All of that.
Speaker 7 (05:05):
And really, you know, as the data come in, hopefully
we'll be moving in the direction we want to see
both on inflation in terms of restoring balance to the economy,
and then we'll make our decisions based on that.
Speaker 3 (05:19):
John Williams speaking there.
Speaker 4 (05:20):
Both Williams and Barkin joined other right setters and voting
unanimously to keep US rates at a two decade high
last week.
Speaker 2 (05:28):
Now, the UKAI startup Wave has raised a billion dollars
in funding for its self driving technology. It's one of
the largest cash injections for a European AI venture on record.
In Vidio Softbak and Microsoft are three of the key
investors in Wave, which was founded by CEO Alex Kendall
in twenty seventeen. Although no valuation was disclosed, the company
(05:50):
says that it should be its last major funding around
as it starts to get profit from commercial deals.
Speaker 4 (06:00):
And job seeker is looking for a happier work life
with a new employer may find the grass isn't always greener.
That's according to new research in the United States that
shows recent switchers are less satisfied.
Speaker 3 (06:12):
Than those who stayed. Pot Bloomberg's Tea Adabio has the details.
Speaker 8 (06:16):
Once a sure fire away to make workers happier, switching
jobs is now leaving them more miserable than before. A
survey from the US Conference Board found that in twenty
twenty two, recent hires had greater job satisfaction, but just
a year later that trend has reversed. Lucrative pandemic pay
bumps could be to blame for the change, encouraging job
(06:39):
hunters to ignore other factors like culture and training. Despite
the dip in new highest sentiment ratings for overall job
satisfaction are still at their highest since nineteen eighty seven.
In London, tiwa ad a Bio Bloomberg Radio.
Speaker 4 (06:54):
In a moment, we will bring you our interview with
the UBS CEO, Sodio Ramati and also talk about the
latest developments in the Middle East. But another story that
cod aur I this morning now, Havier Blastom Bomberg opinion
is the person that you want to be reading if
you're worried about the cost of important goods going up.
He's our commodities experts. He flagged quite a long time
(07:14):
ago at the soaring cost of olive oil, very important
if you're a heavy consumer.
Speaker 3 (07:19):
Now he's worried about coffee.
Speaker 2 (07:20):
Yeah, this is also he has a lovely kind of
line about how his favorite breakfast foods are going up
in price because hea'ts bred with a dash of olive
oil and a coffee. Now, the issue is that there
is it's not just weather that is affecting. And we
have talked, for example about the sawing price of cocoa beans.
Again that's the kind of weather climate change related issue,
(07:42):
but it's also to do with the fact that China
is affecting the price and what growers actually plant, as
well as rather falling in love with coffee themselves and
so pushing up the price of Arabica and other coffee
blends that are so important in the West.
Speaker 4 (08:00):
Yeah, definitely worth there is. If you've got time this
morning in China's need love of coffee is coming for yours.
Have of last's latest piece FM Bloomberg Opinion.
Speaker 2 (08:08):
Now let's get more on our top story, the bumper
results from UBS these UK based lender return to profit
after two loss making quarters. The robust set of results
will be a boost for Sergio and Moti, the CEO,
as he grapples with a tightening regulatory outlook in Switzerland.
Sergio Motti has been speaking to our editor at large,
franc In Laqua, and Moti began by highlighting the strength
(08:31):
in the bank's recent performance.
Speaker 9 (08:33):
First of all, we are making very good progress on
our integration plans, but also it was great to see
a very strong return to profitability both on a reported
basis but also very strong underlying profits. We also see
a good momentum with clients with inflows across our businesses,
(08:53):
and our capital is strong, so allowing us to continue
to pursue our capital return plans.
Speaker 10 (09:02):
And also the investment bank was actually quite strong, better
than expected. Again, what does it tell you about what
you can see in the future. Is it a one
off or actually is a path ahead better?
Speaker 9 (09:12):
Actually, it's a good momentum. You may remember in the
four quarter. We also had a very strong performance in banking.
As we integrate a new colleagues from Credit Switch on
our platform, we start to see the pipeline developing we
are able to execute and so it's very much aligned
with our expectations of improving the mix between our markets
(09:37):
business and our banking business in the investment bank.
Speaker 10 (09:40):
So in the investment bank where you see the biggest
strength and know we also heard about possible job losses
in Asia. Is Asia at the moment weaker than, for example,
parts of the US and investment bank.
Speaker 9 (09:50):
No, I think that we reinforced our franchises globally. I
think that, of course, we are still going through across
the entire bank. We are still a lot of work
to be done to res structure the businesses and to
bring them back into even stronger profitability. So I think
that is a good momentum. We achieve almost a ten
(10:11):
percent return on CT one, which is still a third
or fifty percent away from our final targets, so still
work to be done. We always say that twenty twenty
four is an important year, and as we now approach
the end of May, we're going to execute on our
legal entity mergers which allow us to unlock in the
(10:34):
future further cost settings.
Speaker 10 (10:37):
An important year twenty twenty four because it's also more
difficult year to twenty twenty three.
Speaker 3 (10:42):
No, because is the.
Speaker 9 (10:43):
More First of all, we have two huge milestones, the
merger of our legal entities and the second one we
start to do the migration of clients from the credit
switch platforms into the UBS platforms. So this is very technical,
still requires a lot of support and.
Speaker 3 (11:01):
People to do that.
Speaker 9 (11:03):
But as we start to do that, we can unlock
some cost savings, but also unlock capital savings, funding savings,
and therefore you know, achieving our final targets to achieve
thirteen billions of savings by the end of twenty twenty
six forty this year we do expect half of that
(11:24):
being achieved, so six and a half billions.
Speaker 10 (11:27):
So when you look at global wealth, I mean the
outlook talks about interest rate cuts. Again, how do you
worry about you know, things that are outside.
Speaker 9 (11:33):
Your control, well, things that are side our control. You know,
we always need to wonder what can happen on the
geopolitical front, what can happen on any sudden change in
the macroeconomic pictures. So I think that we do indeed
a factor in our outlook for NII. For example, three
rate cuts in the US, two rate cuts in Switzerland.
(11:58):
This can change. If it changes, may be beneficiary to
our NII, but maybe the underlying macroeconomic event is not
so positive. So you know, we need to always assess well,
we are prepared for any scenario. We stay focused one
on our plan, but also we have you know, a
(12:20):
balance sheet for old seasons, allowing us to really manage
any unexpected event.
Speaker 10 (12:26):
So when you look at market volatility, it's a little
bit unusual to see this much market volatility or even
pricing on the fact. How do you describe the.
Speaker 9 (12:33):
Markets, Well, it's a kind of market volatility around bonds
and ten years. But if I look on effects, I
look at equities and many other anset classes, the volatility
is not there is more subdued. We saw more client
and activity, but let's not forget that there is a
(12:55):
little bit of seasonality factor in the first quarter. So
we need to really see how in the next quarter
things are going to play out. We have to remember
that we are still facing in the in the in
the foreseeable future, big elections coming, and how this is
going to then play out into the sentiment of clients.
Speaker 10 (13:17):
Still still open, and that will be very regionally. Again,
if you look at pipelines, did you see a difference.
Speaker 9 (13:22):
Yeah, very origionally, but you know nowadays things in every
region can affect others, so I think that things are
quite fluid.
Speaker 10 (13:29):
Is Europe weaker than the rest of the world, Well,
Europe is.
Speaker 3 (13:33):
Still not growing.
Speaker 9 (13:34):
If I look at our businesses, of course, it's still
somehow clear that the real growth is mainly driven by
the US and in Asia. I'm also very pleased with
our performance in Switzerland, but when I look at Europe
in general, it's still not so constructive.
Speaker 2 (13:57):
So that was the UPS Group CEO Searge and mostly
that's wee into Bloombogs Francine Laqua. Of course, the Swiss
authorities warm systematically important banks to hold more capital. That's
one major issue. In terms of the tea live blog
that is live on the Bloomberg Tumil, you can follow
all of our experts speaking about the UBS results. Now,
jan Patrick Barnett, a senior reporter, talking about UBS shares
(14:19):
indicated higher three percent this morning, so that on one
of our key earning stories.
Speaker 4 (14:24):
Well, let's turn two events in the Middle East. Next,
and Israeli troops have taken control of the Rafa border
crossing area in Gazo, with Hama saying that all aid
flows from Egypt saying have stopped.
Speaker 3 (14:35):
It's the latest development.
Speaker 4 (14:36):
Is Hamas and Israel been negotiating via cut Our Egypt
and the US on a ceasefire, hostage and prison and
agreement for weeks. Now joining us with more is Our
EMEA Ands director rasalind Mathis and Raz Good morning to you.
First of all, what do we know about what's been
happening at Rafa this morning and how significant is it?
Speaker 1 (14:53):
Well, what we know is that there were actually strikes
in the Rafa area by Israel air strikes overnight and
then today we've got news that troops have moved into
the Rougher crossing area and that's the first time since
the war broke out since Hermas attacked Israel back in October,
and they've secured that crossing and they've blocked it off
and so that means that no aid at all people
(15:15):
can move back and forth between that and that is
the conduit between Egypt and Gaza and has been a
major port of operation for aid to go into Gaza
in recent months. It's not the only crossing into Gaza,
but there's only a few, and you know, they've been
pretty troubled throughout and so it's really going to raise
questions about the flow of aid into Gaza. It also
(15:38):
points to the fact that Israel is very determined to
push ahead with some sort of offensive in Rufa, whether
that's within weeks or days or whatever. They're making preparations
for it, and so they're picking up their activity there
and that's really a sign that despite the talks that
are still going to go on towards the ceasefire, that
Israel sees its primary goal as going to rough for
(16:00):
at some point.
Speaker 2 (16:01):
Yeah, absolutely, those negotiations expected to continue today. What do
we know about the cease far proposal and a possible deal,
you know, talks of Hamas backing a deal and a
rebuttal from Israel.
Speaker 1 (16:14):
Well we know that Hamas that accepted the deal that
was proposed by cut Her and Egypt, of course facilitated
also by the US, and Israel says that's not good enough.
And it seems to be a continuation of disagreement over
felling minor wording in the end, but it's really about
what this deal might mean in terms of setting the
pathway for a full end to the war. A Hamas
(16:35):
wants it to be a pathway to an end to
the war. Israel wants to prevaricate on that because they
want to have the option to keep fighting if needed,
And it's really about the language that that might bake
in to that.
Speaker 3 (16:45):
Agreement at this point.
Speaker 1 (16:47):
I mean, Israel says they will show up for further talks,
but they've also said that's going to be on the
same track as they continue their preparations for Rafa, and
so for the US in Europe and cut Her in
Egypt and others. It's really about a matter of time,
the race the clock here to try and get a
deal sealed on before Israel does proceed with Ruffa.
Speaker 4 (17:06):
How much of a risk is this for Israel in
terms of attention Nasha relationships, because of the pressure that
they've been facing from their allies like the US to
not go ahead with this, the fans.
Speaker 1 (17:17):
Of in Rauffa, well, there is that incredible pressure on Israel.
But as also have we seen throughout You've seen Benjamin Netanyahu,
you've seen other members of the leadership, the war Cabinet
and so on, really saying they're undeterred because they see
their goals as being ultimately two things. One is to
try and get the release of the remaining Israeli hostages.
But also they don't want to be in a position
(17:37):
where they feel vulnerable to Hamas again, and that's a
really existential thing for Israel. And so despite the many
phone calls again a phone call yesterday yet again with
the US President Joe Biden and Israeli Prime Minister Benjamin Netanyahu,
where Joe Biden said, if you go into Rafa, it's
a full offensive with civilians at stake. That's a mistake,
he said to him, those words, it is quote. But
(18:01):
the rhetoric from Israel doesn't change, and that again because
they see it as fundamental. Of course, there has been
a hard tack to the right in politics, so Benjamin
Netnio is bound a bit by members of his own,
you know, in a circle, who are pushing him on
this front. But the reality is also is that despite
all the retoric, the US is not going to stop
sending weapons to Israel. They've made clear they want to
(18:23):
support Israel militarily, and so the leverage the US has
and others have in Europe and elsewhere, is arguably limited.
Speaker 4 (18:32):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (18:38):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 4 (18:44):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (18:50):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (18:59):
I'm Stephen Carol.
Speaker 4 (19:00):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak
Europe
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Nikki Glaser Podcast
Every week comedian and infamous roaster Nikki Glaser provides a fun, fast-paced, and brutally honest look into current pop-culture and her own personal life.